SEC Form 4 · accession 0000899243-16-010678
Modsys International Ltd · MDSYF
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Period of report
Dec 29, 2015
Accepted (ET)
Jan 4, 2016 · 6:53 pm EST
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001029581
Table I — non-derivative securities
| Security | Date | Code | Shares | Price | A/D | Owned after | D/I | Nature of ownership |
|---|---|---|---|---|---|---|---|---|
| Ordinary shares, NIS 0.04 par valueF3,F1,F2 | Dec 29, 2015 | J | 625,000 | $0.00 | A | 4,017,488 | I | See Footnote |
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Warrants (Right to Buy)F1,F4,F5,F2 | $0.01 | Dec 29, 2015 | J | 153,689 | A | Dec 29, 2015 | Dec 29, 2018 | Ordinary shares, NIS 0.04 par value | 153,689 | 153,689 | I |
| Warrants (Right to Buy)F1,F2 | $0.01 | Dec 29, 2015 | P | 100,000 | A | Dec 29, 2015 | Dec 29, 2017 | Ordinary shares, NIS 0.04 par value | 100,000 | 253,689 | I |
| Preferred shares, NIS 0.04 par valueF1,F2,F6 | $0.00 | Dec 29, 2015 | P | 200,000 | A | — | — | Ordinary shares, NIS 0.04 par value | 200,000 | 200,000 | I |
Explanation of responses
- F1The filing of this Form 4 shall not be construed as an admission that Prescott Group Capital Management, L.L.C. ("Prescott Capital") or Phil Frohlich, the manager of Prescott Capital, is or was, for the purposes of Section 16(a) of the Securities Exchange Act of 1934, as amended, or otherwise, the beneficial owner of any of the shares of Ordinary shares, NIS 0.04 par value (the "Common Stock"), of Modsys International Ltd. (the "Issuer") purchased by Prescott Group Aggressive Small Cap Master Fund, G.P. (the "Master Fund") for the accounts of Prescott Group Aggressive Small Cap, L.P. or Prescott Group Aggressive Small Cap II, L.P. (together, the "Small Cap Funds"). Pursuant to Rule 16a-1, both Prescott Capital and Phil Frohlich disclaim such beneficial ownership.
- F2Prescott Capital holds indirectly the shares of Common Stock of the Issuer through the account of the Master Fund, of which Prescott Capital is the Investment Manager. The Master Fund holds the shares of Common Stock for the accounts of the Small Cap Funds, of which Prescott Capital is the Investment Manager. Prescott Capital receives a portion of the profits in the way of a capital allocation from, and owns a partnership interest in, the Small Cap Funds. Phil Frohlich reports the Common Stock held indirectly by Prescott Capital because, as the manager of Prescott Capital at the time of purchase, he controlled the disposition and voting of the securities.
- F3These shares of Common Stock were issued on December 29, 2015 pursuant to an aniti-dilution provision contained in the Amended and Restated Securities Purchase Agreement dated as of November 22, 2013 between the Issuer and the Reporting Persons as a result of the Issuer having been deemed to have issued shares of Common Stock or certain securities convertible into shares of Common Stock for a purchase price of less than $4.00 per share prior to November 22, 2015.
- F4These warrants vested 50% on the date of grant and will vest 50% on February 24, 2016. In the event that the Issuer has repaid in full the guaranteed amount owed pursuant to a credit agreement between Modern Systems Corporation and MS Modernization Services, Inc., a wholly owned subsidiary and a majority owned subsidiary of the Issuer, and Comerica Bank (the "Credit Agreement") to below $1,000,000 prior to February 24, 2016, the unvested portion of the warrants held by the Reporting Persons will be automatically cancelled.
- F5These warrants were issued in exchange for the Reporting Persons and certain other shareholders providing a guaranty with respect to the Credit Agreement.
- F6The convertible preferred stock is convertible into shares of Common Stock at any time on a one-for-one basis, and has no expiration date.