SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
Integrated Security Systems, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
45812J101
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(CUSIP Number)
Russell Cleveland
Renaissance Capital Group, Inc.
8080 N. Central Expressway, Suite 210, LB-59
Dallas, Texas 75206-1857
(214) 891-8294
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 17, 2001
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Section 240.13d-1(e), Section 240.13d-1(f) or Section
240.13d-1(g), check the following box [ ].
(Continued on following pages)
CUSIP No. 45812J101 13D
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1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NUMBER
Renaissance Capital Growth & Income Fund III, Inc. 75-2533518
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
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3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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NUMBER OF 7 SOLE VOTING POWER 21,194,758
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER None
9 SOLE DISPOSITIVE POWER 21,194,758
10 SHARED DISPOSITIVE POWER None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,194,758 shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.1%
14 TYPE OF REPORTING PERSON
IV
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CUSIP No. 45812J101 13D
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1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NUMBER
Renaissance US Growth & Income Trust PLC None - Foreign
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
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3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
England
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NUMBER OF 7 SOLE VOTING POWER 20,358,446
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER None
9 SOLE DISPOSITIVE POWER 20,358,446
10 SHARED DISPOSITIVE POWER None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,358,446 shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
66.2%
14 TYPE OF REPORTING PERSON
IV
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Item 1. Security and Issuer.
This statement relates to the Common Stock ("Common Shares") of
Integrated Security Systems, Inc. (the "Company"). The principal executive
offices of the Company are located at 8200 Springwood Drive, Irving, Texas
75063.
Item 2. Identity and Background.
(a) This Statement is filed by Renaissance Capital Growth & Income Fund
III, Inc. ("Renaissance III"), and Renaissance US Growth & Income Trust PLC
("Renaissance PLC"; Renaissance III and Renaissance PLC, collectively, the
"Reporting Persons").
Certain information concerning the directors and executive officers of
the Reporting Persons is set forth on Attachment 1 attached hereto and
incorporated herein by reference.
(b) Renaissance III is a business development company regulated under
the Investment Company Act of 1940, as amended, and organized under the laws of
the State of Texas, with its principal business and principal office at 8080 N.
Central Expressway, Suite 210, LB 59, Dallas, Texas 75206-1857.
Renaissance PLC is an investment trust organized under the laws of
England and Wales. Its address in the United States is c/o Renaissance Capital
Group, Inc., Investment Manager, 8080 N. Central Expressway, Suite 210, LB 59,
Dallas, Texas 75206-1857.
The business addresses of the directors and executive officers of the
Reporting Persons are set forth on Attachment 1 to this Statement and
incorporated herein by reference.
(c) Renaissance III and Renaissance PLC are engaged in the business of
investing principally in emerging or undervalued U.S. public companies.
(d) Neither any of the Reporting Persons nor, to the best knowledge of
such persons, any person named in Attachment 1 to this Statement, has been
convicted in a criminal proceeding in the past five years (excluding traffic
violations or similar misdemeanors).
(e) Neither any of the Reporting Persons nor, to the best knowledge of
such persons, any person named in Attachment 1 to this Statement, was during the
last five years a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which such person was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) All persons named on Attachment 1 to this Statement are citizens of
the United States, except as otherwise indicated on such Attachment.
Page 4
Item 3. Source and Amount of Funds or Other Consideration.
The total amount of funds required by Renaissance III to acquire
the securities reported in Item 5(a) was $4,329,589. The source of such funds
was capital of Renaissance III.
The total amount of funds required by Renaissance PLC to acquire
the securities reported in Item 5(a) was $4,163,463. The source of such funds
was capital of Renaissance PLC.
Item 4. Purpose of Transaction.
The Reporting Persons each acquired beneficial ownership of the
Common Stock reported in Item 5(a) both in the ordinary course of business for
investment purposes and upon exchange of indebtedness in connection with the
financial restructuring of the Company. The President and CEO of Renaissance
Capital Group, Inc., the investment advisor to Renaissance III and the
investment manager of Renaissance PLC, Russell Cleveland, has been appointed to
the board of directors of the Company.
The Reporting Persons may participate in discussions with
management or third parties in which the Reporting Person may suggest or take a
position with respect to potential changes in the operations, management or
capital structure of such companies as a means of enhancing shareholder value.
Such suggestions or positions may relate to one or more of the transactions
specified in clauses (a) through (j) of Item 4 of the Schedule 13D form,
including, without limitation, such matters as disposing of one or more
businesses, selling the Company, merging with another Company or acquiring
another company or business, changing operating or marketing strategies, changes
in management or marketing or restructuring the Company's capitalization.
Each Reporting Person continues to assess the Company's business,
financial condition, results of operations and prospects, general economic
conditions, the securities markets in general and those for the Company's
securities in particular, other developments and other investment opportunities,
as well as the Reporting Person's investment objectives. Depending on such
assessments, one or both of the Reporting Persons may acquire additional
securities or may determine to sell or otherwise dispose of some or all of its
holdings of securities.
Other than as described above, either of the Reporting Persons has
any present plans or proposals which relate to or would result in any
transaction, change or event specified in clauses (a) through (j) of Item 4 of
the Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Renaissance III beneficially owns 21,194,758 Common Shares, and
Renaissance PLC beneficially owns 20,358,446 Common Shares. The Reporting
Persons beneficially own 40,553,204 Common Shares. Based upon information
contained in the Company's most recent public filing containing such information
filed with the Securities and Exchange Commission, the Common Shares
beneficially owned by Renaissance III, Renaissance PLC and together represent
approximately 67.1%, 66.2% and 80.6%, respectively, of the outstanding Common
Stock of the Company. Renaissance III and Renaissance PLC disclaim that they are
members of a group for purposes of Regulation 13D.
Page 5
The Common Shares beneficially owned by Renaissance III are
comprised of 393,259 shares of Common Stock; 814,299 shares of Common Stock
issuable upon the exercise of warrants; 187,500 shares of Common Stock issuable
upon the conversion of 7,500 shares of Series D Preferred Stock; 2,589,945
shares of Common Stock issuable upon conversion of 20,720 shares of Series F
Convertible Preferred Stock ("Series F Preferred Stock"); and 17,209,755 shares
of Common Stock issuable upon conversion of 137,678 shares of Series G
Convertible Preferred Stock ("Series G Preferred Stock"). The board of directors
of Renaissance III exercises voting and investment control over the securities
of the Company owned by it.
Renaissance PLC is deemed the beneficial owner of Common Shares
comprised of 393,258 shares of Common Stock; 808,617 shares of Common Stock
issuable upon the exercise of warrants; 187,500 shares of Common Stock issuable
upon the conversion of 7,500 shares of Series D Preferred Stock; 2,589,945
shares of Common Stock issuable upon conversion of 20,720 shares of Series F
Preferred Stock; and 16,379,126 shares of Common Stock issuable upon conversion
of 131,033 shares of Series G Preferred Stock. The board of directors of
Renaissance PLC exercises voting and investment control over the securities of
the Company owned by it.
(b) Holders of Series D Preferred Stock are entitled to one vote
for each share of Common Stock into which such share of Series D Preferred Stock
could then be converted. Presently, the holder of each share of Series D
Preferred Stock is entitled to 25 votes. Holders of Series F Preferred Stock are
entitled to vote with the holders of Common Stock, the Series D Preferred Stock,
the Series E Preferred Stock, and the Series G Preferred Stock as a single class
on all matters on which stockholders are entitled to vote, including the
election of directors, except as otherwise required by law. Holders of Series F
Preferred Stock are also entitled to vote with any other class of equity
securities which may vote with the holders of the Common Stock as a single class
with respect to any matter. Holders of Series F Preferred Stock are entitled to
a number of votes per share of Series F Preferred Stock equal to the number of
shares of Common Stock into which the shares of Series F Preferred Stock are
convertible on the record date of the determination of stockholders entitled to
receive notice of and to vote on such matter. In addition, the consent of
holders of 80% of the Series F Preferred Stock and the Series G Preferred Stock,
voting together as a single class, will be required to (a) authorize, create or
increase the authorized amount of any class of senior stock or parity stock,
other than Preferred Stock of the same class or securities to evidence bank debt
or asset securitizations or (b) authorize a merger, consolidation or sale of
assets, other than in the ordinary course of business, of the Company, including
the capital stock of the Company's subsidiaries. The consent of holders of 80%
of the Series F Preferred Stock, voting as a single class, will be required to
approve any action to amend the Company's certificate of incorporation or bylaws
that would materially and adversely affect the rights of the Series F Preferred
Stock.
Holders of Series G Preferred Stock will be entitled to vote with
the holders of Common Stock, the Series D Preferred Stock, the Series E
Preferred Stock, and the Series F Preferred Stock as a single class on all
matters on which stockholders are entitled to vote, including the election of
directors, except as otherwise required by law. Holders of Series G Preferred
Stock are also entitled to vote with any other class of equity securities which
may vote with the holders of the Common Stock as a single class with respect to
any matter. Holders of Series G Preferred Stock are entitled to a number of
votes per share of Series G Preferred Stock equal to the number of shares of
Common Stock into which the shares of Series G Preferred Stock are convertible
on the record date of the determination of stockholders entitled to receive
notice of and to vote on such matter. In addition, the consent of holders of 80%
Page 6
of the Series G Preferred Stock and the Series F Preferred Stock, voting
together as a single class, will be required (a) to authorize, create or
increase the authorized amount of any class of senior stock or parity stock,
other than Preferred Stock of the same class or securities to evidence bank debt
or securitizations or (b) authorize a merger, consolidation or sale of assets,
other than in the ordinary course of business, of the Company, including the
capital stock of the Company's subsidiaries. The consent of holders of 80% of
the Series G Preferred Stock, voting as a single class, will be required to
approve any action to amend the Company's certificate of incorporation or
bylaws that would materially and adversely affect the rights of the Series G
Preferred Stock.
In addition to their right to vote with the holders of the Common
Stock on the election of directors, the Reporting Persons, as the holders of the
Series G Preferred Stock and the holders of the Series F Preferred Stock, voting
together as a single class, are entitled to elect two additional directors to
the Company's board of directors.
Each of the Reporting Persons has or will have upon the exercise
of the warrants issued to it by the Company the sole power to vote and dispose
of all of the Common Shares that it beneficially owns. None of the Reporting
Persons shares voting or disposition power with any person with respect to the
Common Shares.
(c) No transaction in the Common Shares was effected by a Reporting
Person during the past 60 days, other than the issuance on May 17, 2001, in
connection with a financial restructuring of the Company, to Renaissance III of
20,720 shares of Series F Preferred Stock and 137,678 shares of Series G
Preferred Stock and the issuance to Renaissance PLC of 20,720 shares of Series F
Preferred Stock and 131,033 shares of Series G Preferred Stock. All of these
shares were issued in exchange for approximately $7.5 million of promissory
notes and convertible debentures owned by Renaissance III and Renaissance PLC,
including accrued interest, in connection with a financial restructuring of the
Company.
(d) No person other than the Reporting Persons has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Common Shares beneficially owned by the Reporting Persons.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Not applicable.
Item 7. Material to Be Filed as Exhibits.
Exhibit 1 Joint Filing Agreement Pursuant to Rule 13d-1(k)
Page 7
SIGNATURES
After reasonable inquiry and to the best of their individual knowledge
and belief, the signatories below certify that the information set forth in this
statement is true, complete, and correct as of this 23rd day of May, 2001.
The persons whose signatures appear below agree that this statement on
Schedule 13D is filed on behalf of each of them.
RENAISSANCE CAPITAL GROWTH &
INCOME FUND III, INC.
By: /s/
Name: Russell Cleveland
Title: President and Chief Executive Officer
RENAISSANCE US GROWTH & INCOME
TRUST PLC
By: /s/
Name: Russell Cleveland
Title: Director
Page 8
ATTACHMENT 1
The name, business address and principal occupation of the directors
and executive officers of Renaissance III are as follows:
DIRECTORS
Principal
Name Business Address Occupation
Edward O. Boshell, Jr. c/o Renaissance Capital Group, Inc. Director
8080 North Central Expressway
Suite 210, LB 59
Dallas, Texas 75206-1857
Russell Cleveland c/o Renaissance Capital Group, Inc. Director
8080 North Central Expressway
Suite 210, LB 59
Dallas, Texas 75206-1857
Peter Collins c/o Renaissance Capital Group, Inc. Director
8080 North Central Expressway
Suite 210, LB 59
Dallas, Texas 75206-1857
Ernest C. Hill c/o Renaissance Capital Group, Inc. Director
8080 North Central Expressway
Suite 210, LB 59
Dallas, Texas 75206-1857
OFFICERS
Russell Cleveland c/o Renaissance Capital Group, Inc. President and
8080 North Central Expressway Chief Executive
Suite 210, LB 59 Officer
Dallas, Texas 75206-1857
John A. Schmit c/o Renaissance Capital Group, Inc. Vice President
8080 North Central Expressway
Suite 210, LB 59
Dallas, Texas 75206-1857
Robert C. Pearson c/o Renaissance Capital Group, Inc. Vice President
8080 North Central Expressway
Suite 210, LB 59
Dallas, Texas 75206-1857
Barbara A. Butschek c/o Renaissance Capital Group, Inc. Secretary and
8080 North Central Expressway Treasurer
Suite 210, LB 59
Dallas, Texas 75206-1857
Page 9
The name, business address and principal occupation of the directors
and executive officers of Renaissance PLC are as follows:
DIRECTORS
Principal
Name Business Address Occupation
Michael B. Cannan c/o Sinclair Henderson Limited Director
23 Cathedral Yard
Exeter EX11HB
Russell Cleveland c/o Sinclair Henderson Limited Director
23 Cathedral Yard
Exeter EX11HB
Ernest J. Fenton c/o Sinclair Henderson Limited Director
23 Cathedral Yard
Exeter EX11HB
Lord Mark Fitzalan Howard OBE c/o Sinclair Henderson Limited Director
23 Cathedral Yard
Exeter EX11HB
C.A. Rundell, Jr. c/o Sinclair Henderson Limited Director
23 Cathedral Yard
Exeter EX11HB
William W. Vanderfelt c/o Sinclair Henderson Limited Director
23 Cathedral Yard
Exeter EX11HB
OFFICERS
None
Page 10
EXHIBIT 1
JOINT FILING AGREEMENT PURSUANT TO RULE 13d-1(k)
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13D is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13D shall be filed on behalf
of each of the undersigned without the necessity of filing additional joint
filing agreements. The undersigned acknowledge that each shall be responsible
for the timely filing of such amendments, and for the completeness and accuracy
of the information concerning it contained therein, but shall not be responsible
for the completeness and accuracy of the information concerning the others,
except to the extent it knows or has reason to believe that such information is
inaccurate. This Joint Filing Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall constitute one
and the same instrument.
RENAISSANCE CAPITAL GROWTH &
INCOME FUND III, INC.
By: /s/
Name: Russell Cleveland
Title: President and Chief Executive Officer
RENAISSANCE US GROWTH & INCOME
TRUST PLC
By: /s/
Name: Russell Cleveland
Title: Director
Page 11