FORM 4 |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940 |
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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). |
1. Name and Address of Reporting Person*
(Street)
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2. Issuer Name and Ticker or Trading Symbol
Modsys International Ltd [ MDSY ] |
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
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3. Date of Earliest Transaction
(Month/Day/Year) 12/29/2015 | ||||||||||||||||||||||||||
4. If Amendment, Date of Original Filed
(Month/Day/Year) |
6. Individual or Joint/Group Filing (Check Applicable Line)
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Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned | ||||||||||
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1. Title of Security (Instr. 3) | 2. Transaction Date (Month/Day/Year) | 2A. Deemed Execution Date, if any (Month/Day/Year) | 3. Transaction Code (Instr. 8) | 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) | 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) | 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 7. Nature of Indirect Beneficial Ownership (Instr. 4) | |||
Code | V | Amount | (A) or (D) | Price | ||||||
Ordinary shares, NIS 0.04 par value | 12/29/2015 | J | 625,000 | A | $0.00(3) | 4,017,488(1) | I | See Footnote(2) |
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities) | |||||||||||||||
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1. Title of Derivative Security (Instr. 3) | 2. Conversion or Exercise Price of Derivative Security | 3. Transaction Date (Month/Day/Year) | 3A. Deemed Execution Date, if any (Month/Day/Year) | 4. Transaction Code (Instr. 8) | 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) | 6. Date Exercisable and Expiration Date (Month/Day/Year) | 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) | 8. Price of Derivative Security (Instr. 5) | 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) | 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 11. Nature of Indirect Beneficial Ownership (Instr. 4) | ||||
Code | V | (A) | (D) | Date Exercisable | Expiration Date | Title | Amount or Number of Shares | ||||||||
Warrants (Right to Buy) | $0.01 | 12/29/2015 | J | 153,689(1)(4) | 12/29/2015 | 12/29/2018 | Ordinary shares, NIS 0.04 par value | 153,689(1)(4) | $0.00(5) | 153,689 | I | See Footnote(2) | |||
Warrants (Right to Buy) | $0.01 | 12/29/2015 | P | 100,000(1) | 12/29/2015 | 12/29/2017 | Ordinary shares, NIS 0.04 par value | 100,000(1) | $1.3356 | 253,689 | I | See Footnote(2) | |||
Preferred shares, NIS 0.04 par value | $0.00 | 12/29/2015 | P | 200,000(1) | (6) | (6) | Ordinary shares, NIS 0.04 par value | 200,000(1) | $1.3289 | 200,000 | I | See Footnote(2) |
1. Name and Address of Reporting Person*
(Street)
Relationship of Reporting Person(s) to Issuer
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1. Name and Address of Reporting Person*
(Street)
Relationship of Reporting Person(s) to Issuer
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Explanation of Responses: |
1. The 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. |
2. Prescott 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. |
3. These 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. |
4. These 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. |
5. These warrants were issued in exchange for the Reporting Persons and certain other shareholders providing a guaranty with respect to the Credit Agreement. |
6. The convertible preferred stock is convertible into shares of Common Stock at any time on a one-for-one basis, and has no expiration date. |
Remarks: |
Phil Frohlich, manager of Prescott Group Capital Management, L.L.C. | 01/04/2016 | |
/s/ Phil Frohlich | 01/04/2016 | |
** Signature of Reporting Person | Date | |
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. | ||
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v). | ||
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). | ||
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure. | ||
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number. |