Blueprint
As
filed with the Securities and Exchange Commission on
November 27, 2017
Registration No. 333-
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INSIGNIA SYSTEMS, INC.
(Exact name of
registrant as specified in its charter)
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Minnesota
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41-1656308
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(State or other jurisdiction
ofincorporation or organization)
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(I.R.S. EmployerIdentification
No.)
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8799
Brooklyn Blvd.
Minneapolis, Minnesota 55445
(763) 392-6200
(Address, including zip code, and
telephone number, including area code, of registrant’s
principal executive offices)
Jeffrey A.
Jagerson
Chief Financial
Officer and Treasurer
Insignia
Systems, Inc.
8799 Brooklyn Blvd.
Minneapolis, Minnesota 55445
(763) 392-6200
(Name, address, including zip code,
and telephone number, including area code, of agent for
service)
Copies
to:
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W. Morgan
Burns, Esq.
Joshua L.
Colburn,
Esq.Faegre Baker
Daniels, LLP
90 South Seventh
Street, Suite 2200
Minneapolis,
Minnesota 55402
Tel:
(612) 766-7136
Fax:
(612) 766-1600
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Approximate
date of commencement of proposed
sale to the public: From time to time after the
effective date of this registration
statement.
If the only securities being
registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box.
☐
If any of the securities being
registered on this Form are being 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.
☑
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, a smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b2 of the Exchange
Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated
filer
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☐ (Do not check if
a smaller reporting company)
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Smaller reporting company
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☑
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·
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Emerging growth
company
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☐
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If an emerging growth company, indicated by
check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 7(a)(2)(B)
of the Securities Act. ☐
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(a)
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Proposed
Maximum
Offering Price per
Share
(b)
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Proposed
Maximum
Aggregate
Offering Price
(b)
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Amount of Registration
Fee
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Common stock,
par value $0.01 per share
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2,313,200
shares
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$1.71
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$3,954,416
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$492.47
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_________________________________________
Estimated in
accordance with Rule 457(c) solely for the purpose of calculating
the registration fee. The proposed maximum offering price per share
and in the aggregate are based on the average of the high
and low sale prices of the registrant’s common stock, as
reported on the Nasdaq Capital Market on November 21,
2017.
The
Registrant hereby amends this
registration statement on such date or dates as may be necessary to
delay its effective date until the Registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of
1933, as amended, or until the Registration Statement
shall become effective on such
date as the Commission, acting
pursuant to said Section 8(a), may
determine.
The information in this prospectus is not complete and may be
changed. The selling shareholders named in this prospectus may not
sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and the selling
shareholder named in this prospectus is not soliciting offers to
buy these securities in any jurisdiction where the offer or sale is
not permitted.
Subject to completion, dated November 27, 2017
PROSPECTUS
Insignia Systems,
Inc.
2,313,200 Shares of Common
Stock
Offered by the Selling
Shareholders
This prospectus relates to the possible resale from time to time of
up to 2,313,200 shares of our common stock, par value $0.01 per share, which shares are
issued and outstanding. Such common stock may be sold from time to
time by the selling shareholders named herein. We are not offering any
shares of common stock for sale under
this prospectus, and we will not receive any of the proceeds from
the sale or other disposition of the shares offered hereby. This
prospectus describes the general manner in which our common stock
may be offered and sold by the selling
shareholders.
The common stock may be offered or sold by the selling
shareholders at fixed prices, at
prevailing market prices at the time of sale or at prices
negotiated with purchasers, to or through underwriters,
broker-dealers, agents, or through any other means described in
this prospectus under “Plan of Distribution”. The
selling shareholders will bear
all commissions and discounts, if any, attributable to the sales of
shares.
Our common stock trades on the NASDAQ Capital Market
under the symbol
“ISIG.” On November 21, 2017, the last
reported sale price of our common stock was $1.65 per
share.
You should rely only on the information contained in this
prospectus or any prospectus supplement or amendment. We have not
authorized anyone to provide you with different
information.
INVESTING IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON
PAGE 3
OF THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is November 27, 2017
TABLE OF CONTENTS
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SUMMARY
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1
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THE
OFFERING
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2
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RISK
FACTORS
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3
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CAUTIONARY NOTE
REGARDING FORWARD LOOKING STATEMENTS
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3
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SELLING
SHARESHOLDERS
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4
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USE OF
PROCEEDS
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6
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PLAN OF
DISTRIBUTION
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6
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DESCRIPTION OF
CAPITAL
STOCK
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8
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LEGAL
MATTERS
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9
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EXPERTS
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9
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INFORMATION
INCORPORATED BY REFERENCE
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9
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WHERE YOU CAN FIND
MORE INFORMATION
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9
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ABOUT THIS PROSPECTUS
You
should rely only on the information contained in, or incorporated
by reference into, this prospectus. No
person has been authorized to give any information or make any
representations in connection with this offering other than those
contained or incorporated by reference in this prospectus, and, if
given or made, such information or representations must not be
relied upon as having been authorized by us. Neither we, nor
the selling shareholders, are making any offer to sell these
securities in any jurisdiction where the offer is not permitted.
The information in this prospectus is accurate only as of the
applicable dates, regardless of the time of delivery of this
prospectus or any sale of shares of our common stock. Our business,
financial condition, results of operations and prospects may have
changed since that date.
For
investors outside the United States: Neither we nor the selling
shareholders have taken any action to permit a public offering of
the shares of our common stock or the possession or distribution of
this prospectus in any jurisdiction where action for that purpose
is required, other than the United States. You are required to
inform yourselves about and to observe any restrictions relating to
this offering and the distribution of this prospectus.
SUMMARY
This summary highlights information contained elsewhere in this
prospectus or incorporated in this prospectus by reference, and
does not contain all of the information that you should consider in
making your investment decision. Before investing in our
securities, you should carefully read this entire prospectus
including each of the documents incorporated herein by reference,
our financial statements and the related notes and the information
set forth therein under the heading “Risk
Factors”.
Insignia Systems, Inc.
Insignia
Systems, Inc. (“Insignia,”
“we,” “us,” “our” or the
“Company”) is a developer and marketer of innovative
in-store products, programs and services that help consumer
packaged goods (“CPG”) manufacturers and retail partners drive
sales at the point of purchase. The Company was incorporated under the laws of the State of
Minnesota in 1990. Since 1998, we have focused on managing a retail
network, made up of approximately 21,000 store locations, for the
primary purpose of providing turn-key at-shelf market access
for CPG manufacturers’
marketing programs. We provide participating retailers with
benefits including incremental revenue, incremental sales
opportunities, increased shopper engagement in-store, and custom
creative development and other in-kind
services.
Our primary product has been the Point-Of-Purchase Services
(POPS®)
in-store marketing program. Insignia POPS program is a national, account-specific, shelf-edge
advertising and promotional tactic. Internal testing has indicated
the program delivers incremental sales for the featured brand. The
program allows manufacturers to deliver vital product information
to consumers at the point-of-purchase, and to leverage the local
retailer brand and store-specific prices to provide a unique
“call to action” that draws attention to the featured
brand and triggers a purchase decision. CPG customers benefit from our nimble operational
capabilities, which include short lead times, in-house graphic
design capabilities, post-program analytics, and micro-marketing
capabilities such as variable or bilingual messaging. We recently
announced the nationwide launch of freshADSSM,
an exclusive advertising vehicle featured in produce, created to
inspire shoppers early in their trip and help navigate them to
center store.
Registration and Standstill Agreement
On November 9, 2017, we entered into a registration and standstill
agreement with the selling shareholders (the “2017 Agreement”). Pursuant to the 2017
Agreement, we agreed to prepare and
file the registration statement of which this prospectus is a part.
The Company has agreed, among other things, to indemnify each of
the selling shareholders from
certain liabilities, fees and expenses for errors and omissions in
the registration statement. See “Selling Shareholders”
for more information.
Corporate Information
The mailing address and telephone number of our principal executive
offices are 8799 Brooklyn Blvd., Minneapolis, MN 55445 and (763)
392-6200, respectively. Our website is www.insigniasystems.com.
Information contained on, or that can be accessed through, our
website is not incorporated by reference into this prospectus, and
you should not consider information on our website to be part of
this prospectus.
Our logo and our other trade names, trademarks and service marks
appearing in this prospectus are our property. Other trade names,
trademarks and service marks appearing in this prospectus are the
property of their respective owners. Solely for convenience, our
trademarks and tradenames referred to in this prospectus may appear
without the ™ symbol, but those references are not intended
to indicate, in any way, that we will not assert, to the fullest
extent under applicable law, our rights, or the right of the
applicable licensor to these trademarks and
tradenames.
Under
this prospectus, the selling shareholders may, from time to time,
sell shares of our common stock in one or more offerings. See
“Plan of Distribution” below.
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Common stock offered by the selling
shareholders
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2,313,200 shares
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Common stock outstanding
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11,914,676 shares
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Use of proceeds
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We are not offering any shares pursuant to this prospectus, and we
will not receive any proceeds from the sale of the shares offered
by the selling shareholders.
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Nasdaq Capital Market symbol
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ISIG
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Investing in our common stock involves high degree of risk. Before
you invest in our common stock you should carefully consider the
information in this prospectus, and the documents incorporated by
reference in this prospectus, and carefully read the risks
described in the documents incorporated by reference in this
prospectus including those set forth under the caption “Risk
Factors” in our Annual Report on Form 10-K for our
fiscal year ended December 31, 2016, which is incorporated herein
by reference, and under similar headings in our subsequently filed
quarterly reports on Form 10-Q and annual reports
on Form
10-K, as
well as the other risks and uncertainties described in any
applicable prospectus supplement or any other documents
incorporated herein by reference. Any of these risks could cause
our actual results to vary materially from recent results or from
anticipated future results or could materially and adversely affect
our business, financial condition and results of operations. This
effect could be compounded if multiple risks were to occur. The
occurrence of any of these risks might cause you to lose all or
part of your investment.
Please also refer to the section below titled “Cautionary
Statements Regarding Forward-Looking Statements” regarding
forward-looking statements included or incorporated by reference in
this prospectus. You should read this prospectus, including any
risk factors incorporated by reference in this prospectus, in
conjunction with our financial statements, the notes to those
financial statements and our management’s discussion and
analysis of financial condition and results of operation included
in our periodic reports and incorporated by reference
herein.
CAUTIONARY NOTE REGARDING FORWARD LOOKING
STATEMENTS
This
prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
In some cases, you can identify forward-looking statements by the
following words: “anticipate”, “believe”,
“continue”, “could”,
“estimate”, “expect”, “intend”,
“may”, “ongoing”, “plan”,
“potential,” “predict”,
“project”, “should”, “will”,
“would”, or the negative of these terms or other
comparable terminology, although not all forward-looking statements
contain these words. Forward-looking statements are not a guarantee
of future performance or results, and will not necessarily be
accurate indications of the times at, or by, which such performance
or results will be achieved.
Forward-looking statements involve a number of risks and
uncertainties, many of which are outside of our control.
Forward-looking statements are based on information available at
the time the statements are made and involve known and unknown
risks, uncertainties and other factors that may cause our results,
levels of activity, performance or achievements to be materially
different from the information expressed or implied by the
forward-looking statements in this report. Factors that might
cause actual results to differ include, but are not limited to,
those set forth under “Risk Factors” in the documents
incorporated by reference herein or therein. You should read
the matters described in “Risk Factors” and the other
cautionary statements made in this report as being applicable to
all related forward-looking statements wherever they appear in this
report.
In
light of the significant uncertainties inherent in our
forward-looking statements, the inclusion of such information
should not be regarded as a representation by us or any other
person that the results or conditions described in such statements
or our objectives and plans will be achieved. Furthermore, past
performance in operations and share price is not necessarily
indicative of future performance. We disclaim any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law. You are advised, however, to consult any
additional disclosures we have made or will make in our reports
filed with the Securities and Exchange Commission (the
“Commission”) on
Forms 10-K, 10-Q and 8-K. All subsequent
written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements contained in this prospectus
and the other documents incorporated by reference
herein.
The
selling shareholders, or their pledgees, assignees, or
successors-in-interest, are offering for resale, from time to time,
up to an aggregate of 2,313,200 shares of our common stock. The
table below has been prepared based upon the information furnished
to us by the selling shareholders as of November 15, 2017. The
selling shareholders may have purchased, acquired, sold,
transferred or otherwise disposed of some or all of their shares
since the date on which the information in the following table is
presented. The beneficial ownership of our common stock by the
selling shareholders has been determined in accordance with Rule
13d-3 under the Exchange Act.
The
selling shareholders may sell some, all or none of the shares
offered by this prospectus. Because the number of shares the
selling shareholders may offer and sell is not presently known, we
cannot estimate the number of shares that will be held by the
selling shareholders after completion of this offering. This table,
however, presents the maximum number of shares of common stock that
the selling shareholders may offer pursuant to this prospectus and
the number of shares of common stock that would be beneficially
owned after the sale of the maximum number of shares of common
stock by the selling shareholders.
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Selling Shareholder(s)
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Number of Shares of Common
Stock Beneficially Owned
Prior to this Offering(a)
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Number of Shares of
Common Stock
Being Offered(b)
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Number of Shares of Common
Stock Beneficially Owned
After this Offering(c)
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Number
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Percentage
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Number
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Percentage
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The
Lion Fund II, L.P.(d)
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2,313,200
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19.4%
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2,313,200
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–
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–
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Sardar
Biglari
______________________________
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11,788
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*
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–
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11,788
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*
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(a)
“Beneficial
ownership” means that a person, directly or indirectly, has
or shares voting or investment power with respect to a security or
has the right to acquire such power within 60 days. The number of
shares beneficially owned is determined as of November 21, 2017,
and the percentage is based upon 11,914,676 shares of our common
stock outstanding as of November 21,
2017.
(b)
Represents the
maximum number of shares that may be sold by the selling
sharesholders pursuant to this prospectus; provided, however, that
pursuant to Rule 416 under the Securities Act of 1933, as amended,
the registration statement of which this prospectus is a part shall
also cover any additional shares of common stock which become
issuable in connection with the shares registered for sale hereby
by reason of any stock dividend, stock split, recapitalization or
other transaction that, without the receipt of consideration,
results in an increase in the number of outstanding shares of our
common stock.
(c)
Assumes the sale
of all shares offered hereby to unaffiliated third parties. The
selling shareholders may sell all or part of their respective
shares.
(d)
Biglari Capital
Corp. (“BCC”) is the general partner of The Lion Fund
II, L.P. (“The Lion Fund II”), and Sardar Biglari is
the Chairman and Chief Executive Officer of BCC. Mr. Biglari holds
investment discretion over securities owned by The Lion Fund II. By
virtue of these relationships, BCC and Mr. Biglari may be deemed to
beneficially own the shares held by The Lion Fund II. Each of BCC
and Mr. Biglari disclaims beneficial ownership of the shares that
it or he does not directly own. The address for BCC, The Lion Fund
II and Mr. Biglari is 17802 IH 10 West, Suite 400, San Antonio, TX
78257.
Past and Current Relationships with Selling
Shareholders
2015 Standstill Agreement and Board of Directors
In December 2015, we entered into a standstill agreement (the
“ 2015 Agreement”)
with Sardar Biglari, Philip L. Cooley, The Lion Fund II and BCC (collectively, the “Biglari
Group”) and certain other
parties defined therein as the “Air T
Group”. The 2015 Agreement expired on its terms upon the conclusion of our
2016 annual meeting of shareholders on June 10, 2016.
Under the 2015 Agreement, we
agreed to increase the size of our Board of Directors
from seven to nine directors,
effective as of December 5, 2015. We also agreed to have our
Board elect
Mr. Biglari and Dr.
Cooley as directors effective as of
the same date. The Company further agreed to nominate and recommend
that shareholders elect
Mr. Biglari, Dr.
Cooley, and two other individuals
named in the 2015 Agreement, as
four of no more than nine total nominees for election as directors
at the 2016 annual meeting of shareholders. We further agreed to reimburse the Air T
Group and the Biglari Group for certain expenses incurred in connection with
the 2015 Agreement and related
matters.
Under the 2015 Agreement, the
members of the Air T Group and
the Biglari Group agreed to vote all shares of our common
stock beneficially owned by them in
favor of all of our Board’s director nominees at the 2016 annual
meeting of shareholders, for
approval of the advisory vote to approve executive compensation, in
accordance with our Board’s recommendation on any
advisory vote on the frequency of future advisory votes to approve
executive compensation and for the ratification of our independent
auditors. The Air T Group and
the Biglari Group each agreed to also abide by certain standstill
provisions until the conclusion of the 2016 annual meeting of
shareholder or any earlier date, if any, upon which the Company had
materially breached certain of its commitments under the
2015 Agreement.
During the period for which the restrictions applied, each of
the Air T Group and
the Biglari Group was
restricted, subject to certain limited exceptions, from: (i)
submitting, inducing or encouraging the submission of any
shareholder proposal or notice of nomination or other business for
consideration at a meeting of our shareholders; (ii) opposing directors nominated by our
Board of Directors (iii) participating
in any “group”
within the meaning of Section 13(d)(3) of the Exchange
Act, other than their respective
shareholder group or any group deemed to arise from the 2015
Agreement; (iv) participating in the
solicitation of any proxy other than in support of the nominees of
our Board of Directors; (v)
calling a special meeting of shareholders; (vi) seeking, other than as a director of the
Company, to control or influence the governance or policies of the
Company; (vii) effecting or facilitating, other than as a director
of the Company, the acquisition of any material assets or business
of the Company,
any business combination involving the Company, or any other
extraordinary transaction with respect to the Company, and (viii)
disclosing or pursuing certain intentions with respect to
the 2015 Agreement.
Mr.
Biglari served as a member of
our Board of Directors from
December 2015 until his resignation in March
2017.
2017 Registration and Standstill Agreement
On November 9, 2017, we entered into the 2017 Agreement
with each of the selling
shareholders. Pursuant to the
2017 Agreement, we agreed to prepare
and file a registration statement with the Commission
for purposes of registering the sale
of up to 2,313,200 shares of common stock beneficially owned by one or more of the
selling shareholders. We have
agreed, among other things, to indemnify each selling shareholder
from certain liabilities, fees and expenses for errors and
omissions in the registration statement.
Under the 2017 Agreement, the
registration period continues until the earliest to occur of
certain events, including the third anniversary of the effective
date of the 2017 Agreement, and
the disposition of shares under the registration statement is
subject to a specified price requirement as set forth in the
2017 Agreement.
Under the 2017 Agreement, the
standstill period continues under the earliest to occur of certain
events, including the third anniversary of the effective date of
the 2017 Agreement. The
selling shareholders have
agreed during the standstill period to vote all shares of
our common stock beneficially owned by
them (i) in favor of all directors nominated by our Board of
Directors for election at any annual
meeting of shareholders of the
Company and (ii) for approval with respect to the advisory vote to
approve executive compensation, in accordance with the Board
of Directors’ recommendation on
any advisory vote on the frequency of future advisory votes to
approve executive compensation, and for the ratification of our
independent auditors.
The selling shareholders have
also agreed during the standstill period to abide by certain
standstill provisions as described in the 2017
Agreement. During the standstill
period, the selling shareholders are restricted, subject to certain limited
exceptions, from: (i) submitting, inducing or encouraging the
submission of any shareholder proposal or notice of nomination or
other business for consideration; (ii) nominating any candidate for
election to the Board of Directors or opposing the directors nominated by the
Board; (iii) participating in any
“group” within the meaning of Section 13(d)(3) of
the Exchange Act, other than a
group consisting of the selling shareholders and their affiliates or any group deemed to arise
from the 2017 Agreement; (iv)
participating in the solicitation of any proxy other than in
support of the Board’s
nominees; (v) calling a special meeting of
shareholders; (vi) seeking, other than
as a director of the Company, to control or influence the
governance or policies of the Company; (vii) effecting or
facilitating the acquisition of any material assets or business of
the Company, any business combination involving the Company, or any
other extraordinary transaction with respect to the Company,
and (viii) disclosing or
pursuing certain intentions with respect to the 2017
Agreement.
The
selling shareholders will receive all of the proceeds from the sale
of the shares offered for sale by them under this prospectus. We
will not receive proceeds from the sale of the shares by the
selling shareholders. Pursuant to the 2017 Agreement, the selling
shareholders will bear the first $40,000 of the Company’s
expenses related to the registration of securities under this
registration statement and the Company will bear all other expenses
incident to this registration statement, including all registration
and filing fees and fees and expenses of our own counsel and
accountants, but excluding the legal expenses of the selling
shareholders. For more information on the 2017 Agreement or the
selling shareholders, see “Selling
Shareholders”.
The
selling shareholders will pay any underwriting discounts and
commissions and expenses incurred by the selling shareholders in
disposing of the shares. Any transfer taxes payable on these shares
and any commissions and discounts payable to underwriters, agents,
brokers or dealers will be paid by the selling
shareholders.
DETERMINATION OF OFFERING PRICE
The selling shareholders will
determine at what price they may sell the offered shares, and such
sales may be at fixed prices, at prevailing market prices at the
time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated
prices.
The selling shareholders, which
as used herein includes donees, pledgees, transferees or other
successors-in-interest selling shares of common stock
or interests in shares of
common stock received after the date
of this prospectus from a selling shareholder as a gift, pledge,
partnership distribution or other transfer, may, from time to time,
sell, transfer or otherwise dispose of any or all of their
shares of common stock or interests
in shares of common stock on
any stock exchange, market or trading facility on which the shares
are traded or in private transactions. These dispositions may be at
fixed prices, at prevailing market prices at the time of sale, at
prices related to the prevailing market price, at varying prices
determined at the time of sale, or at negotiated
prices.
The selling shareholders may
use any one or more of the following methods when disposing of
shares or interests therein:
●
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
●
block
trades in which the broker-dealer will attempt to sell the shares
as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for
its account;
●
an
exchange distribution in accordance with the rules of the
applicable exchange;
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privately
negotiated transactions;
●
short
sales effected after the date the registration statement of which
this prospectus is a part is declared effective by the
SEC;
●
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
●
broker-dealers may agree with the selling
shareholders to sell a specified
number of such shares at a stipulated price per
share;
●
a
combination of any such methods of sale; and
●
any
other method permitted by applicable law.
The selling shareholders 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 amending the list of
selling shareholders to include
the pledgees, transferees or other successors in interest as
selling shareholders under this
prospectus. The selling shareholders also may transfer the shares of common
stock in other circumstances, in which
case the transferees, pledgees or other successors in interest will
be the selling beneficial owners for purposes of this
prospectus.
In connection with the sale of our common stock or interests therein, the selling
shareholders may enter into hedging
transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the common stock in the
course of hedging the positions they assume. The selling
shareholders may also sell
shares of our common stock short and
deliver these securities to close out their short positions, or
loan or pledge the common stock to broker-dealers that in turn may
sell these securities. The selling shareholders may also enter into option or other transactions
with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to
such broker-dealer or other financial institution of shares offered
by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such
transaction).
The aggregate proceeds to the selling shareholders
from the sale of the common stock
offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling
shareholders reserves the right to
accept and, together with their agents from time to time, to
reject, in whole or in part, any proposed purchase of common stock
to be made directly or through agents.
The
selling shareholders will receive all of the proceeds from the sale
of the shares offered for sale by them under this prospectus. We
will not receive proceeds from the sale of the shares by the
selling shareholders. Pursuant to the 2017 Agreement, the selling
shareholders will bear the first $40,000 of the Company’s
expenses related to the registration of securities under this
registration statement and the Company will bear all other expenses
incident to this registration statement, including all registration
and filing fees, and fees and expenses of our own counsel and
accountants, but excluding the legal expenses of the selling
shareholders. Any transfer taxes payable on these shares and any
commissions and discounts payable to underwriters, agents, brokers
or dealers will be paid by the selling shareholders.
The selling shareholders and
any underwriters, broker-dealers or agents that participate in the
sale of the common stock or interests therein may be
“underwriters”
within the meaning of Section 2(11) of the Securities
Act. Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities
Act. Selling shareholders
who are “underwriters”
within the meaning of Section 2(11) of the Securities Act
will be subject to the prospectus
delivery requirements of the Securities Act.
The selling shareholders also
may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities
Act rather than under this prospectus,
provided that they meet the criteria and conform to the
requirements of that rule.
To the extent required, the shares of our common stock
to be sold, the names of the
selling shareholders, the
respective purchase prices and public offering prices, the names of
any agents, dealer or underwriter, any applicable commissions or
discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that
includes this prospectus.
In order to comply with the securities laws of some states, if
applicable, the common stock may be sold in these jurisdictions
only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it
has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is
complied with.
The
selling shareholders and any other person participating in such
distribution will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may
limit the timing of purchases and sales of any of the shares of
common stock by the selling shareholders and any other
participating person. Regulation M may also restrict the ability of
any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the
shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any
person or entity to engage in market-making activities with respect
to the shares of common stock.
Pursuant
to the 2017 Agreement, we have agreed to indemnify the selling
shareholders against liabilities, including liabilities relating to
the registration of the shares offered by this prospectus,
resulting from (i) any untrue statement or alleged untrue statement
of a material fact contained in this prospectus or the registration
statement of which this prospectus is part, (ii) the omission or
alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein (in the
case of any prospectus, in light of the circumstances under which
they were made) not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act,
any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities
law in connection with the offering covered by this registration
statement.
Pursuant
to the 2017 Agreement, the selling shareholders have agreed to
indemnify the Company against certain liabilities resulting from
information furnished to us by the selling shareholders
specifically for inclusion in this prospectus, the registration
statement of which this prospectus is part, or any amendment or
supplement thereto.
We have
agreed to keep the registration statement, of which this prospectus
is a part, effective until the earlier of (i) the date, if
any, that the selling shareholders’ beneficial ownership of
our common stock has remained below 10.0% of the then outstanding
shares of our common stock for 90 consecutive days; (ii) the date,
if any, that the Company no longer qualifies for the use of a
registration statement on Form S-3; (iii) such date, if any, as any
of the selling shareholders materially breaches certain obligations
under the 2017 Agreement; and (iii) November 9, 2020, the
third anniversary of the 2017 Agreement.
There can be no assurance that any selling shareholder will sell
any or all of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part. Once sold under the registration statement, of which
this prospectus forms a part, the shares of common stock
will be freely tradable in the hands
of persons other than our affiliates.
DESCRIPTION OF CAPITAL
STOCK
The
following is a summary description of our capital stock. It does
not purport to be complete and is subject to, and is qualified in
its entirety by, the provisions of our certificate of incorporation
and bylaws, copies of which are attached hereto and incorporated
herein by reference.
Common Stock
Our
authorized capital stock consists of: 40,000,000 shares of common
stock, $0.01 par value per share. As of October 31, 2017, there were 11,914,676
shares of common stock outstanding. No share of common stock is
entitled to any preference over any other share. The holders of
common stock are entitled to one vote for each share held of record
on each matter submitted to a vote of shareholders. Shareholders
have no cumulative voting rights, which means that the holders of
shares entitled to exercise more than 50% of the voting rights are
able to elect all of the directors. Dividends may be paid to
holders of common stock when, as and if declared by the Board of
Directors out of funds legally available for payment of dividends.
Upon liquidation, dissolution or winding up of the Company, after
payment to creditors, the assets of the Company will be divided pro
rata on a per-share basis among the holders of the common stock.
The Bylaws of the Company require that only a majority of the
issued and outstanding shares
of common stock of the Company need be
present to constitute a quorum and to transact business at a
shareholders’ meeting. The
holders of common stock are not entitled to any sinking fund,
preemptive, subscription, redemption or conversion rights. All
outstanding shares of common stock are fully paid and
nonassessable.
Dividends
The
payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend,
among other things, upon the Company’s earnings, its capital
requirements, its financial conditions, any
restrictions
under
credit agreements and other relevant factors. We have not
historically paid dividends, other than one-time dividends declared
in 2011 and 2016. On November 28, 2016, the Board declared a
one-time special dividend of $0.70 per share to shareholders of
record as of December 16, 2016, paid on January 6, 2017. The Board
intends to retain earnings for use in the Company’s business
and does not anticipate paying cash dividends in the foreseeable
future.
The
validity of the shares of common stock being offered by this
prospectus has been passed upon for us by Faegre Baker Daniels LLP,
Minneapolis, Minnesota.
The
audited financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement, have been
so incorporated by reference in reliance upon the report of Baker
Tilly Virchow Krause, LLP, independent registered public accounting
firm, upon the authority of said firm as experts in such
matters.
INFORMATION INCORPORATED BY
REFERENCE
The
Commission allows us to “incorporate by reference” into
this prospectus the information we file with them, which means that
we can disclose important information to you by referring you to
those documents. Any statement contained or incorporated by
reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained herein, or in any subsequently filed document
which also is incorporated by reference herein, modifies or
supersedes such earlier statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus. We incorporate
by reference the documents listed below:
●
the description of
our common stock contained in our registration statement on
Form 8-A filed with the Commission on October 9, 1997,
including all amendments and reports filed for the purpose of
updating such information;
●
our annual report
on Form 10-K for the fiscal year ended December 31, 2016,
filed with the Commission on March 7, 2017;
●
our definitive
proxy statement on Schedule 14A, filed with the Commission on
April 25, 2017;
●
our quarterly
reports on Form 10-Q for the quarters ended March 31, 2017,
June 30, 2017, and September 30, 2017, filed with the
Commission on May 4, 2017, August 4, 2017 (as amended
August 14, 2017), and November 6, 2017, respectively;
and
●
our current reports
on Form 8-K filed with the Commission on February 22, 2017,
March 2, 2017, June 7, 2017, June 16, 2017, June 30,
2017, and November 13, 2017.
We also incorporate by reference into this prospectus all documents (other than
current reports furnished under Item 2.02 or Item 7.01 of Form 8-K
and exhibits filed on such form that are related to such items)
that are subsequently filed by us with the Commission
pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act prior to the termination of the offering of the
securities made by this prospectus (including documents filed after
the date of the initial registration statement and prior to the
effectiveness of the registration statement). These documents
include periodic reports, such as annual reports on Form
10-K, quarterly reports on Form
10-Q and current reports on Form 8-K,
as well as definitive proxy statements.
Any statement contained in this prospectus or in a document
incorporated or deemed to be incorporated by reference into this
prospectus will be deemed to be modified or superseded to the
extent that a statement contained in this prospectus or any
subsequently filed document that is deemed to be incorporated by
reference into this prospectus modifies or supersedes the
statement.
WHERE YOU CAN FIND MORE
INFORMATION
We are subject to the informational requirements of the Exchange
Act and are required to file annual, quarterly and current reports,
proxy statements and other information with the Commission.
You may read and copy this information and the registration
statement at the Commission public reference room located at 100 F
Street, N.E., Room 1580, Washington, DC
20549.
You may obtain information on the operation of the Public Reference
Room by calling the Commission at 1-800-SEC-0330. Any information
we file with the Commission, including the documents incorporated
by reference into this prospectus, is also available on the
Commission’s website at www.sec.gov.
You may
obtain, without charge, a copy of any of these documents, other
than exhibits to those documents that are not specifically
incorporated by reference into those documents, by writing us at
the following address: Insignia Systems, Inc., 8799 Brooklyn Blvd.,
Minneapolis, MN 55445, or by telephoning us at (763) 392-6200.
We also make many of these documents publicly available, free of
charge, on our website at www.insigniasystems.com as soon as
reasonably practicable after filing such documents with the
Commission. The information contained in, or that can be accessed
through, our website is not part of this prospectus.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of
Issuance and Distribution.
Set
forth below is an estimate (except for registration fees, which are
actual) of the approximate amount of the fees and expenses payable
by us in connection with the distribution of the shares of common
stock being sold by the selling shareholders pursuant to this
registration statement. The selling shareholders have agreed to
reimburse the Company for such expenses up to a maximum of $40,000.
The selling shareholders will pay their own underwriting discounts
and commissions, if any.
|
Commission
registration fee
|
$492
|
|
Legal
fees and expenses
|
$35,000
|
|
Accounting
fees and expenses
|
$5,000
|
|
Total
|
$40,492
|
Item
15. Indemnification of Directors and
Officers.
Minnesota law and our Articles
of Incorporation eliminate or limit certain
liabilities of our directors. The Company is subject to
Minnesota Statutes Chapter
302A,
the Minnesota Business
Corporation Act (the “Corporation
Act”).
Section 302A.521 of the Corporation Act provides in substance that,
unless prohibited by its articles of incorporation or bylaws, a
corporation must indemnify a person, including an officer or
director, who is made or threatened to be made a party to a
proceeding by reason of the former or present official capacity of
the person against judgments, penalties, fines, including, without
limitation, excise taxes assessed against the person with respect
to an employee benefit plan, settlements, and reasonable expenses,
including attorneys’ fees and disbursements, incurred by such
person in connection with the proceeding, if certain criteria are
met. These criteria, all of which must be met by the person seeking
indemnification, are (a) that such person has not been
indemnified by another organization or employee benefit plan for
the same judgments, penalties, fines, including, without
limitation, excise taxes assessed against the person with respect
to an employee benefit plan, settlements, and reasonable expenses,
including attorneys’ fees and disbursements, incurred by the
person in connection with the proceeding with respect to the same
acts or omissions; (b)
that such person must
have acted in good faith; (c) that no improper personal benefit
was obtained by such person and such person satisfied certain
statutory conflicts of interest provisions, if applicable;
(d) that in the case of a criminal
proceeding, such person had no reasonable cause to believe that the
conduct was unlawful; and (e) that, in the case of acts or
omissions occurring in such person’s performance in an
official capacity, such person must have acted in a manner such
person reasonably believed was in the best interests of the
corporation or, in certain limited circumstances, not opposed to
the best interests of the corporation. In addition, Section
302A.521, Subdivision 3 of the Corporation Act requires payment by the
registrant, upon written request, of reasonable expenses in advance
of final disposition in certain instances. A decision as to
required indemnification is made by a majority of the disinterested
board of directors present at a meeting at which a disinterested
quorum is present, or by a designated committee of disinterested
directors, by special legal counsel, by the disinterested
shareholders, or by a court. Our certificate
of incorporation and amended and restated bylaws limit the
liability of our directors to the fullest extent permitted by
Minnesota law.
Insofar as exculpation of, or indemnification for, liabilities
arising under the Securities Act of 1933, as amended (the “Securities
Act”) may be permitted to
directors, officers or persons controlling Insignia
pursuant to the foregoing provisions,
we have been informed that in the opinion of the
Commission, such exculpation or
indemnification is against public policy as expressed in the
Securities Act and is therefore
unenforceable.
Item
16. Exhibits.
Unless otherwise indicated, all documents incorporated herein by
reference to a document filed with the Commission
pursuant to the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) are located under Commission
file number
001-13471.
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
|
3.1
|
|
|
|
Incorporated by Reference
|
|
3.2
|
|
|
|
Incorporated by Reference
|
|
5.1
|
|
|
|
Filed Electronically
|
|
10.1
|
|
|
|
Incorporated by Reference
|
|
23.1
|
|
|
|
Filed Electronically
|
|
23.2
|
|
|
|
Filed Electronically
|
|
24.1
|
|
Powers
of Attorney (included in Signature Page)
|
|
Filed
Electronically
|
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.
(ii) To
reflect in the prospectus any facts or events arising after the
effective date of this 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 this 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 a 20
percent
change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the
effective registration statement. and
(iii)
To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement.
(2)
That, for the purpose of determining any liability under the
Securities Act, 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.
(b) The
undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the registrant’s annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan’s annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in
this 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.
(c)
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
indemnification provisions described herein, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act 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 Securities 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
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 Minneapolis, State of Minnesota, on
November 27,
2017.
|
|
INSIGNIA
SYSTEMS, INC.
|
|
|
|
|
|
|
By:
|
/s/
Kristine A. Glancy
|
|
|
|
Kristine
A. Glancy
|
|
|
|
President
and Chief Executive Officer
|
|
Power of Attorney
Each person whose signature appears below constitutes and appoints
Kristine A Glancy and Jeffrey A. Jagerson, or either of them, as
his or her true and lawful attorney-in-fact and agent, each acting
alone, with full power of substitution and resubstitution, for him
or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective
amendments) to this registration statement on Form S-3, and to file
the same, with all exhibits thereto, and all documents in
connection therewith, with the SEC, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his or
her substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in
the capacities and on the dates indicated.
|
Signatures
|
|
Title
|
|
Date
|
|
/s/ Kristine A. Glancy
|
|
President, Chief Executive Officer, and Director (principal
executive officer)
|
|
November 27, 2017
|
|
Kristine A. Glancy
|
|
|
|
/s/ Jeffrey
A. Jagerson
|
|
Chief Financial Officer and Treasurer (principal financial and
accounting officer)
|
|
November 27, 2017
|
|
Jeffrey A.
Jagerson
|
|
|
|
/s/ Jacob J.
Berning
|
|
Director
|
|
November 27, 2017
|
|
Jacob
J. Berning
|
|
|
|
/s/ Rachael B.
Vegas
|
|
Director
|
|
November 27, 2017
|
|
Rachael B.
Vegas
|
|
|
|
/s/ F. Peter Zaballos
|
|
Chairman of the Board, Director
|
|
November 27, 2017
|
|
F. Peter Zaballos
|
|
|
|
/s/
Steven R. Zenz
|
|
Director
|
|
November 27, 2017
|
|
Steven
R. Zenz
|
|
|