Media Sciences International S-3/A
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 18, 2005
REGISTRATION NO. 333-122400
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------
MEDIA SCIENCES INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
DELAWARE
(State or jurisdiction of incorporation or organization)
87-0475073
(I.R.S. Employer Identification Number)
8 ALLERMAN ROAD
OAKLAND, NEW JERSEY 07436
201-677-9311
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MICHAEL W. LEVIN
CHIEF EXECUTIVE OFFICER AND PRESIDENT
MEDIA SCIENCES INTERNATIONAL, INC.
8 ALLERMAN ROAD
OAKLAND, NEW JERSEY 07436
201-677-9311
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies of communications to:
DAN BRECHER, ESQ.
LAW OFFICES OF DAN BRECHER
99 PARK AVENUE, 16TH FLOOR
NEW YORK NEW YORK 10016
212-286-0747
Approximate date of commencement of proposed sale to the public:
From time to time on or 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 to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, 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, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
--------------------------- -------------- ---------------- ------------------ ------------
Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be offering price aggregate offering registration
securities to be registered registered (1) per share (2) price (2) fee (1)(3)
--------------------------- -------------- ---------------- ------------------ ------------
Common stock, par value
$.001 4,614,609 $2.09 $9,644,532.81 $1,135.16
--------------------------- -------------- ---------------- ------------------ ------------
Common stock, par value
$.001, underlying warrants 237,500 $2.09 $496,375.00 $58.42
--------------------------- -------------- ---------------- ------------------ ------------
Common stock, par value
$.001, underlying options 800,000 $2.09 $1,672,000.00 $196.80
--------------------------- -------------- ---------------- ------------------ ------------
Total 5,652,109 $11,812,907.81 $1,390.38
--------------------------- -------------- ---------------- ------------------ ------------
(1) Pursuant to Rule 429 of the Securities Act, this is a combined registration
statement that covers 3,697,509 shares being carried forward from the
Registrant's Registration Statement No. 333-112340 and 1,354,600 shares
being carried forward from the Registrant's Registration Statement No.
333-117779.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(c) under the Securities Act. The proposed maximum offering
price per share is based upon the average of the high and low prices for a
share of common stock of the registrant, as reported on the American Stock
Exchange on March 14, 2005.
(3) Previously paid.
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.
PURSUANT TO RULE 429, THIS REGISTRATION STATEMENT CONTAINS A COMBINED PROSPECTUS
THAT COVERS 600,000 SHARES BEING REGISTERED FOR THE FIRST TIME. 3,697,509 SHARES
BEING CARRIED FORWARD FROM THE REGISTRANT'S REGISTRATION STATEMENT NO.
333-112340, AND 1,354,600 SHARES BEING CARRIED FORWARD FROM THE REGISTRANT'S
REGISTRATION STATEMENT NO. 333-117779. REGISTRATION STATEMENT NO. 333-112340
COVERED 8,533,839 SHARES, OF WHICH 2,801,328 SHARES WERE SOLD, AND 2,035,002
SHARES THAT UNDERLIE STOCK OPTIONS AND WARRANTS TO PURCHASE SHARES OF COMMON
STOCK THAT EXPIRED UNEXERCISED. REGISTRATION STATEMENT NO. 333-117779 COVERED
1,450,000 SHARES OF WHICH 95,400 SHARES WERE SOLD.
IN ACCORDANCE WITH THE REGISTRANT'S UNDERTAKING SET FORTH IN REGISTRATION
STATEMENT NO. 333-112340, EFFECTIVE AS OF THE DATE AND TIME THIS REGISTRATION
STATEMENT IS DECLARED EFFECTIVE, THE REGISTRANT HEREBY DEREGISTERS 2,035,002
SHARES OF ITS COMMON STOCK THAT WERE REGISTERED ON THAT REGISTRATION STATEMENT.
THESE 2,035,002 SHARES ARE SHARES UNDERLYING WARRANTS AND OPTIONS THAT EXPIRED
UNEXERCISED, AND ACCORDINGLY, ARE NOT BEING CARRIED FORWARD ONTO THIS
REGISTRATION STATEMENT.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THIS 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 STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 18, 2005
PRELIMINARY PROSPECTUS
MEDIA SCIENCES INTERNATIONAL, INC.
5,652,109 SHARES OF COMMON STOCK
This prospectus relates only to the resale of 5,652,109 shares of common stock
of Media Sciences International, Inc., a Delaware corporation, that may be
offered and sold from time to time by the selling stockholders identified in
this prospectus, of which:
o 2,718,109 shares of common stock were issued in connection with the
conversion and exchange of formerly outstanding shares of series A
convertible preferred stock and as dividend payments on the preferred
stock;
o 1,600,000 shares of common stock were sold to persons in private
securities transactions with us or with an officer of our company;
o 271,500 shares were issued in connection with the exercise of
warrants;
o 25,000 shares were issued in connection with the exercise of stock
options;
o 237,500 shares of common stock underlie warrants to purchase shares of
our common stock; and
o 800,000 shares of common stock underlie stock options granted to
employees to purchase shares of our common stock.
We will not receive any of the proceeds from the sale of the shares of common
stock by the selling stockholders. However, we may receive proceeds from the
exercise of warrants and options. The selling stockholders will pay all
brokerage fees and commissions and similar sale-related expenses. We are paying
expenses relating to the registration of the shares with the Securities and
Exchange Commission.
The shares may be offered and sold, from time to time, by the selling
stockholders. The selling stockholders may from time to time sell their shares
of common stock to or through one or more underwriters, directly to other
purchasers or through agents, in ordinary brokerage transactions, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale, at
prices related to the then-prevailing market price or at negotiated prices.
Our common stock is quoted on the American Stock Exchange under the symbol
"GFX". On March 15, 2005, the last reported sale price for a share of our common
stock on the American Stock Exchange was $2.22.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
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.
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED IN THIS PROSPECTUS OR
INCORPORATED BY REFERENCE. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU
WITH DIFFERENT INFORMATION. NEITHER WE, NOR ANY OTHER PERSON ON OUR BEHALF, IS
MAKING AN OFFER TO SELL OR SOLICITING AN OFFER TO BUY ANY OF THE SECURITIES
DESCRIBED IN THIS PROSPECTUS IN ANY STATE WHERE THE OFFER IS NOT PERMITTED BY
LAW. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS. THERE MAY
HAVE BEEN CHANGES IN OUR AFFAIRS SINCE THE DATE OF THE PROSPECTUS.
Prospectus dated [________ __], 2005
TABLE OF CONTENTS
Page
----
Prospectus Summary 3
Risk Factors 4
Forward-Looking Statements 7
Use of Proceeds 7
Certain Recent Developments 7
Selling Stockholders 8
Plan of Distribution 16
Legal Matters 17
Experts 17
Indemnification 17
Incorporation of Certain Documents by Reference 17
Where You Can Find More Information 18
2
PROSPECTUS SUMMARY
You should read the entire prospectus carefully, especially the risks of
investing in our common stock discussed under "Risk Factors." In addition, you
should also read the documents we have referred you to in "Incorporation of
Certain Documents by Reference" on page 17 for information on our company and
our financial statements.
ABOUT MEDIA SCIENCES INTERNATIONAL, INC.
We are a manufacturer of supplies for business color printers. We operate
through two wholly-owned subsidiaries.
Our wholly-owned subsidiary, Media Sciences, Inc., manufactures and distributes
printer supplies, including solid ink sticks and toner cartridges for use in
Tektronix, Xerox, QMS-Minolta, Epson, Ricoh and other color printers. We intend
to grow this business through an expansion of our product line, expansion of our
distribution channels, through our INKlusive free color printer program and
through demand creation marketing activities. While we primarily sell our
supplies through an international distribution channel, we also sell supplies
directly to certain end users through our INKlusive program.
Our wholly-owned subsidiary, Cadapult Graphic Systems, Inc., sells supplies
directly to certain end users through our INKlusive color printer program and to
those with whom we have a historical relationship.
We are a Delaware corporation. Our principal corporate office is located at 40
Boroline Road, Allendale, New Jersey 07401. Our telephone number is
201-677-9311. Our web site address is www.mediasciences.com.
THE OFFERING
Total shares outstanding 10,805,974 shares of common stock
Total shares to be outstanding 11,843,474 shares of common stock,
after the offering assuming the issuance of shares
underlying all stock options and
warrants included in this prospectus
Common stock offered for resale 5,652,109 shares of common stock, of
to the public which:
o 2,718,109 shares of common stock were
issued in connection with the
conversion and exchange of formerly
outstanding shares of series A
convertible preferred stock and as
dividend payments on the preferred
stock;
o 1,600,000 shares of common stock
were sold to persons in private
securities transaction with us or
with an officer of our company;
o 271,500 shares were issued in
connection with the exercise of
warrants;
o 25,000 shares were issued in
connection with the exercise of stock
options;
o 237,500 shares of common stock
underlie warrants to purchase
shares of our common stock; and
o 800,000 shares of common stock
underlie stock options granted
to employees to purchase shares
of our common stock.
Price per share of common stock Market price at the time of resale
to the public
Proceeds from offering We will not receive any of the proceeds
from the sale of the shares of common
stock offered by the selling
stockholders. However, we may receive
proceeds from the exercise of stock
options and warrants, which will be used
for working capital.
Trading symbol for common stock GFX
3
RISK FACTORS
You should carefully consider the risks described below before making an
investment. If any of the following risks occurs, our actual results could
differ significantly, and the trading price of our common stock could decline,
and you may lose all or part of your investment. You should also keep these risk
factors in mind when you read forward-looking statements. We have identified all
of the material risks which we believe may affect our business and the principal
ways in which we anticipate that they may affect our business or financial
condition.
WE EXPECT OUR EXPENSES TO INCREASE IN 2005, SO WE MAY NOT BE PROFITABLE OR
GENERATE CASH FROM OPERATIONS IN THE FUTURE.
We expect our expenses to increase as we continue to transition our business
from a printer reseller to a printer ink supply manufacturer and distributor. We
may incur operating losses and net losses for the near term as we incur
additional costs associated with the growth of our Media Sciences subsidiary,
entry into new markets, and the expansion of our administrative, operational,
marketing and sales organizations. For the year ended June 30, 2004, we incurred
a loss applicable to common shareholders of $1.6 million, or $0.26 per share
basic and diluted, as compared to the year ended June 30, 2003, where we earned
$0.25 million, or $0.07 per share basic and diluted. For the three month period
ended September 30, 2004, we earned $0.27 million, or $0.03 per share basic and
diluted, as compared to three month period ended September 30, 2004, where we
earned $0.07 million, or $0.02 per share basic and diluted. We do not know how
much capital we will need to develop these services and products. We cannot
assure you that our revenues will increase as a result of our increased
spending. If revenues grow more slowly than we anticipate, or if operating
expenses exceed our expectations, we may not continue to be profitable.
IF WE DEFAULT ON OUR OBLIGATIONS UNDER A CREDIT LINE WITH A LENDING BANK, THE
BANK COULD FORECLOSE ON MOST OF OUR ASSETS.
We have a $3,000,000 revolving line of credit with a financial institution. We
can borrow up to $3,000,000 under a revolving line of credit, subject to
availability of collateral. Borrowings bear interest at 0.75% over the lender's
base rate, are payable on demand and are collateralized by all of our assets. As
of December 31, 2004, $3,000,000 was outstanding under this line. This line
expires on November 30, 2006. If we are unable to repay our outstanding
indebtedness under the credit line, the bank could foreclose on all of our
assets. If we do not have sufficient cash flow to repay the credit line
indebtedness or if we cannot refinance the obligation, we will not be able to
implement our business plan, which would have a material adverse affect on our
future viability. We may not be able to repay our outstanding indebtedness under
the credit line. Substantially all of our assets are subject to security
interests held by the bank. Unless the security interests are released, assets
will not be available to us to secure future indebtedness, which may adversely
affect our ability to borrow in the future.
WE MAY ENCOUNTER MANUFACTURING PROBLEMS AND INCUR COSTS ASSOCIATED WITH
REMEDYING THE PROBLEMS, WHICH WOULD REDUCE OUR PROFIT MARGINS AND GENERATE LESS
INTEREST IN OUR PRODUCTS.
We may encounter problems in the manufacture of our products that would reduce
our profit margins or increase operating costs and lead to less interest in our
products. Because we provide warranties to our customers, we may incur costs
with remedying the problem. Although we maintain quality control over our
products in the manufacturing process, we may not become aware of any problems
until after the products are sold.
4
WE ARE AT A COMPETITIVE DISADVANTAGE BECAUSE WE OPERATE IN A MARKET THAT IS
DOMINATED BY COMPANIES THAT ARE THE ORIGINAL MANUFACTURERS OF PRINTERS FOR WHICH
WE SUPPLY PRODUCTS, AND WE MAY BE SLOWER TO RESPOND TO TECHNICAL CHANGES.
As a third party supplier of color printer consumables, we are at a competitive
disadvantage in product innovation. The market is dominated by companies that
are the original manufacturers of printers, like Xerox, and so we may be slower
to respond to technical changes. Instead, we will have to compete by providing
innovative service offerings, but the dominant companies in the market may be
quick to counter any competitive service offerings that we provide. For example,
approximately 90 days after we announced our No-Cap Color free color printer
program, the predecessor to our current INKlusive program, Tektronix announced
its own free color printer program. The Tektronix program has continued since
Xerox acquired the color printer division from Tektronix in 2000.
IF WE ARE NOT ABLE TO OBTAIN PATENTS ON OR OTHERWISE PRESERVE AND PROTECT OUR
PROPRIETARY TECHNOLOGIES, OUR BUSINESS MAY SUFFER DUE TO COMPETITION.
If we cannot obtain patent or other protection for our proprietary technologies,
our ability to compete in our markets could be impaired due to competition
resulting from others using similar technologies. We have applied for, and will
apply for, certain patents covering some of our products. Some of our products
use proprietary technology that is not covered by a patent or similar
protection, and in many cases, cannot be protected. We cannot be certain that:
o any patents will be issued on our applications;
o any patents that we will own will protect our business against
competitors that develop similar technologies or products;
o our patents will be held valid if they are challenged or subjected to
reexamination or reissue;
o others will not claim rights to our patented or other proprietary
technologies; or
o others will not develop technologies which are similar to, or can
compete with, our unpatented proprietary technologies.
CLAIMS OF INTELLECTUAL PROPERTY INFRINGEMENT BY OR AGAINST US COULD SERIOUSLY
HARM OUR BUSINESS AS COMPETITORS USE SIMILAR TECHNOLOGIES AS OURS AND COMPETE
AGAINST US, OR AS AFFECT OUR ABILITY TO USE CERTAIN TECHNOLOGIES.
Claims of intellectual property infringement by us could seriously harm our
business as competitors use similar technologies, or, in instances of claims
against us, we may be unable to use certain technologies. From time to time, we
may be forced to respond to or prosecute intellectual property infringement
claims to defend or protect our rights or a customer's rights. These claims,
regardless of merit, may consume valuable management time, result in costly
litigation or cause product shipment delays. Any of these factors could
seriously harm our business and operating results. We may have to enter into
royalty or licensing agreements with third parties who claim infringement. These
royalty or licensing agreements, if available, may be costly to us. If we are
unable to enter into royalty or licensing agreements with satisfactory terms,
our business could suffer as we may not be able to utilize certain technologies,
if deemed infringing upon a third party's rights. In instances where we believe
we may be infringing the patent rights of others, or that someone may be
infringing our patents rights, we have asked our patent counsel to evaluate the
validity of the patents in question, as well as the potentially infringing
conduct; however, our counsel's conclusion are not binding upon third parties or
upon the courts if we become involved in a dispute.
IF ALL OR A SUBSTANTIAL PORTION OF THE SHARES OF OUR COMMON STOCK OFFERED FOR
SALE BY THIS PROSPECTUS ARE SOLD IN A SHORT PERIOD OF TIME, OUR STOCK PRICE MAY
BE ADVERSELY AFFECTED. OUR STOCK PRICE MAY ALSO BE ADVERSELY AFFECTED BY THE
PERCEPTION THAT SUCH SALES COULD OCCUR.
The shares of common stock offered for sale by this prospectus represent a
majority of our presently outstanding shares of common stock. We cannot control
when the selling stockholders will sell their shares. If all or a substantial
portion of the shares of common stock offered for sale by this prospectus are
sold in a short period of time, the common stock available for sale may exceed
the demand and the stock price may be adversely affected. In addition, the mere
perception that such sales could occur may depress the price of our common
stock.
5
FUTURE SALES OF OUR COMMON STOCK BY EXISTING SHAREHOLDERS COULD NEGATIVELY
AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND MAKE IT MORE DIFFICULT FOR US TO
SELL SHARES OF OUR COMMON STOCK IN THE FUTURE.
We presently have a large number of shares that are presently restricted shares,
and many of those shares are or may soon become eligible for resale pursuant to
exemptions from registration requirements, and sales of our common stock in the
public market, or the perception that such sales could occur, could result in a
drop in the market price of our securities and make it more difficult for us to
complete future equity financings. While we presently do not have any plans for
equity financing, we consider, from time to time, the options available to us
for financing our growth, including by means of debt and equity financing.
As of March 16, 2005, we have 10,805,974 shares of common stock issued and
outstanding. Of the outstanding shares:
o approximately 4,317,255 shares of our outstanding common stock are
freely tradeable in the public markets.
o approximately 2,051,100 shares are restricted common stock that have
been held under one year and are being registered pursuant to this
prospectus.
o approximately 4,437,619 shares are restricted common stock that have
been held for at least one year and may be eligible for sale in the
public markets, of which 2,563,509 shares are being registered
pursuant to this prospectus.
Additionally, we have stock options and warrants outstanding, of which:
o an aggregate of approximately 1,212,439 shares of common stock that
may be issued on the exercise of outstanding stock options, of which
800,000 shares are being registered pursuant to this prospectus.
o an aggregate of approximately 237,500 shares of common stock that may
be issued on the exercise of outstanding warrants, of which 237,500
shares are being registered pursuant to this prospectus.
We cannot estimate the number of shares of common stock that may actually be
resold in the public market since this will depend upon the market price for the
common stock, the individual circumstances of the sellers and other factors.
WE HAVE AUTHORIZED A CLASS OF PREFERRED STOCK WHICH MAY ALTER THE RIGHTS OF
COMMON STOCK HOLDERS BY GIVING PREFERRED STOCK HOLDERS GREATER DIVIDEND RIGHTS,
LIQUIDATION RIGHTS AND VOTING RIGHTS THAN OUR COMMON STOCKHOLDERS HAVE.
The Board of Directors is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the voting power or other rights of the holders of
common stock. Our amended Certificate of Incorporation authorizes a class of
5,000,000 shares of preferred stock with such designation, rights and
preferences as may be determined from time to time by the Board of Directors. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the company.
6
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. We have identified
forward-looking statements in this prospectus using words such as "believes,"
"intends," "expects," "may," "will," "should," "plan," "projected,"
"contemplates," "anticipates," and similar statements. These statements are
based on our beliefs as well as assumptions we made using information currently
available to us. Because these statements reflect our current views concerning
future events, these statements involve risks, uncertainties and assumptions.
Actual future results may differ significantly from the results discussed in the
forward-looking statements. Some, but not all, of the factors that may cause
these differences include those discussed in the Risk Factors section of this
prospectus. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus.
USE OF PROCEEDS
All shares of common stock sold pursuant to this prospectus will be sold by the
selling stockholders. We will not receive any of the proceeds from the sale of
shares of common stock. However, we will receive proceeds from cash exercise of
stock options and warrants held by the selling stockholders that are included in
this prospectus. We would receive an aggregate of up to $987,000 if the selling
stockholders exercise their stock options and warrants, at exercise prices
ranging from $0.50 to $1.06 per share, to acquire 1,037,500 shares of common
stock. We expect to use the proceeds received from the exercise of the stock
options and warrants, if any, for general working capital purposes.
CERTAIN RECENT DEVELOPMENTS
In March 2005, holders of warrants to purchase 221,500 shares of common stock,
exercisable at $1.65 per share until March 9, 2005, elected to exercise their
warrants. We received proceeds of $365,475 from the exercises of the warrants,
which we applied to working capital.
On March 9, 2005, warrants to purchase 15,000 shares of common stock,
exercisable at $1.65 per share, expired unexercised.
On March 9, 2005, warrants to purchase 550,000 shares of common stock,
exercisable at $4.50 per share, expired unexercised.
Effective March 11, 2005, the employment of Duncan Yates, who held the position
of Vice President of Sales, ended. Mr. Yates resigned to join a company operated
by a family relative. We do not believe that the departure of Mr. Yates or the
vacancy of his former position presents a material risk to our operations. We
have commenced a search for candidates for the position. The duties performed by
Mr. Yates are presently being shared by other officers and our employee sales
agents.
7
SELLING STOCKHOLDERS
This prospectus relates to the resale of 5,652,109 shares of common stock by the
selling stockholders. The shares of common stock offered by this prospectus may
be offered from time to time by the selling stockholder. The registration of
these shares does not necessarily mean that the selling stockholder will sell
all or any of the shares.
The following table provides information regarding the beneficial ownership of
our common stock by the selling stockholders as of March 16, 2005. The
information with respect to beneficial ownership of common stock held by each
person is based upon record ownership data provided by our transfer agent,
information as supplied or confirmed by selling stockholders, based upon
statements filed with the Securities and Exchange Commission, or based upon our
actual knowledge.
Number of Percent
Number of Shares Number of Shares Owned Owned
Owned Prior to this Shares Being After this After
Name of Selling Stockholder Offering (a)(b) Offered Offering (c) Offering (d)
--------------------------- ------------------- ------------ ------------ ------------
Levin, Michael W. (1)(2) 1,918,450 500,000 1,418,450 12.0%
Blanco, Frances (1) 173,516 125,000 48,516 *
Huyler, Duncan (1) 175,040 125,000 50,040 *
Yates, Duncan (3) 62,300 25,000 37,300 *
Gunn, Donald (1) 50,000 25,000 25,000 *
Hooker, Randy 50,000 25,000 25,000 *
GFX Investments, LLC (4) 1,839,750 1,000,000 839,750 7.1%
MicroCapital Fund LP (5) 578,561 375,000 203,561 1.7%
MicroCapital Fund Ltd. (5) 344,383 225,000 119,383 1.0*
373823 Ontario Ltd. (6) 12,500 12,500 0 *
Baker, Esther 12,500 12,500 0 *
Baker, Mitchell 50,000 50,000 0 *
Baker, Paul (1)(7) 160,500 25,000 135,500 1.1%
Bearoff, Charles C. and Charles F. 154,600 154,600 0 *
Beroff, Fred and Helen 18,600 18,600 0 *
Berthel SBIC LLC (8) 1,057,240 1,057,240 0 *
Bette Jane Hoover Revocable Trust (9) 36,830 36,830 0 *
Blanco, Frank and Edna 27,500 12,500 15,000 *
Bloom, Genevieve (Revocable Living Trust) 27,875 27,875 0 *
Brecher, Dan (10) 72,451 72,451 0 *
Brookstreet Securities Corporation Inc. (11) 88,650 88,650 0 *
Chakrabarty, Dr. Debabrata, IRA 6,000 6,000 0 *
Chakrabarty, Jayasri, IRA 6,000 6,000 0 *
Charles W. Davidson Company (12) 27,952 27,952 0 *
Comte, Frank A. 1,438 1,438 0 *
8
Conley Revocable Trust (13) 12,500 12,500 0 *
Daniels, Ms. Frances L. 25,000 25,000 0 *
D'Anna, David 25,000 25,000 0 *
Davidson Living Trust (14) 27,952 27,952 0 *
Faris, Robert 11,700 11,700 0 *
Francis Landau Trust (15) 27,952 27,952 0 *
Georgeson, Jamie 20,000 20,000 0 *
Haberman, James 26,307 26,307 0 *
Haitinger, Ethel G. 12,500 12,500 0 *
Hanley, Neil 25,000 25,000 0 *
Horne, Wayne (16) 22,100 22,100 0 *
Hubble, O. Ray 26,514 26,514 0 *
Iosue, Albert (IRA) 70,000 70,000 0 *
Josef, Jeffrey 27,821 27,821 0 *
Kalange, Thomas E. 52,875 52,875 0 *
Kawananakoa, Carolyn 25,000 25,000 0 *
Kugelman, Harold and Marsha 38,500 37,500 1,000 *
L & D Construction (17) 27,952 27,952 0 *
Lawrence Cooper Trust (18) 105,750 105,750 0 *
Lee Family Trust (19) 25,000 25,000 0 *
Lesher, Agnis (Lesher Revocable Living Trust) 27,875 27,875 0 *
Lesnak, Andrew 25,000 25,000 0 *
Levin, Paul 12,500 12,500 0 *
Levine, Paul 12,500 12,500 0 *
Manes, Harvey R., M.D. 50,000 50,000 0 *
Mitchell, Wayne D. 25,000 25,000 0 *
Olds, Thomas and Mary 15,000 15,000 0 *
Ottoson, Wayne 25,000 25,000 0 *
9
Park, Alexander D. and Kathleen 27,876 27,876 0 *
Poorvin, Ronald 24,541 24,541 0 *
Preuss, Marvin D. 1,438 1,438 0 *
Pronk, Nico P. (16) 22,100 22,100 0 *
Quinlan, Michael 200,000 200,000 0 *
Rennie Tejeda and Kathleen J. Tejeda 1,307 1,307 0 *
Rosier, David L. (20) 113,650 113,650 0 *
Sellers, Matthew 28,026 28,026 0 *
Simmons, Robert M. 50,000 50,000 0 *
Skole, Allen and Anita 25,000 25,000 0 *
Sonn, Lew 25,000 25,000 0 *
Spadavecchia, John 1,318 1,318 0 *
Stare, David 26,438 26,438 0 *
Steinberg, Leon 25,000 25,000 0 *
Teeter, Charles and Karen 6,000 6,000 0 *
Treece, Robert and Pam 26,438 26,438 0 *
Wandrei, Robert (IRA) 20,952 20,952 0 *
Watters, Adam H. 12,302 6,250 6,052 *
Watters, Daniel 100,000 100,000 0 *
Watters, Nathan D. 12,000 6,250 5,750 *
White, Dwaine A. 1,438 1,438 0 *
Wiener, Hermine and Rozansky, Joan 30,000 25,000 5,000 *
Wolf, Mary 653 653 0 *
Yannalfo, Stephen 25,000 25,000 0 *
TOTAL 8,587,411 5,652,109 2,935,302
* Represents less than one percent.
(a) Includes shares underlying stock options and warrants which are included in
this prospectus.
(b) The selling shareholders may have sold or transferred, in transactions
exempt from the registration requirements of the Securities Act, some or
all of their shares since the dates as of which the information in the
above table was supplied to us. Information about the selling shareholders
may change over time. We will file a prospectus supplement to name
successors to any named selling stockholders who are able to use the
prospectus to resell the securities.
(c) Assumes all of the shares offered by a selling stockholder pursuant to this
prospectus are sold.
(d) Based upon 11,843,474 shares to be outstanding after the offering, assuming
the issuance of shares underlying stock options and warrants included in
this prospectus.
(1) Selling stockholder is an officer or director of our company.
(2) Includes in the number of shares owned Mr. Levin's indirect beneficial
ownership of an aggregate of 120,000 shares held by his children.
(3) Mr. Yates is a former officer of our company. His employment ended in March
11, 2005. Includes in the number of shares owned Mr. Yates' indirect
beneficial ownership of an aggregate of 300 shares held by his spouse and
children.
(4) The beneficial owner is Richard L. Scott. Mr. Scott owns or controls
entities, including GFX Investments, LLC, which collectively owns 1,839,750
shares of common stock, including 10,000 shares underlying director
compensation stock options and 6,000 shares owned by the Frances Annette
Scott Revocable Trust, of which Mr. Scott's spouse is the trustee.
10
(5) MicroCapital LLC is the general partner and investment advisor to
MicroCapital Fund LP and MicroCapital Fund Ltd. Ian P. Ellis is the
principal owner of MicroCapital LLC and has sole responsibility for the
selection, acquisition and disposition of the portfolio securities by
MicroCapital LLC on behalf of its funds.
(6) The person with voting and investment control over the securities is Leslie
L. Bresgre.
(7) For purposes of the table, excludes beneficial ownership of warrants to
acquire 12,500 shares held by spouse, Esther Baker, who is separately
identified as a selling stockholder.
(8) The company is affiliated with Berthel, Fisher & Company Financial
Services, Inc., a registered broker-dealer. The persons with voting and
investment control are: Thomas J. Berthel, Chief Executive Officer and
Chairman; Ronald O Brendengen, Chief Financial Officer and Chief Operation
Officer; Henry Royer, President; Leslie D. Smith, Secretary; and Julie K.
Driscoll, Assistant Secretary. Mr. Royer serves on our Board of Directors.
(9) The beneficial owner is Bette Jane Hoover.
(10) Refers to shares are held in two separate accounts, Dan Brecher Retirement
Plan and Oppenheimer FBO Daniel Brecher IRA, of which Dan Brecher is the
beneficial owner.
(11) The company is a registered broker-dealer. The person with voting and
investment control over the securities is Stanley C. Brooks, its Chief
Executive Officer and President.
(12) The beneficial owners are: William Beaman, Ray R. Bold, Gloria K. Chang,
Bill Davidson, Charles W. Davidson, Cheryl Davidson, Sandra Davidson,
Stephanie Davidson, Ward C. Dayley, W. Vance Dickinson, Michelle Fisk,
Lawrence Giraudo, Allen Green, Kathryn A. Jackson Moira Jacobs, Albert E.
Luedeke, Martin Macken, Ilustre Nepomuceno, Patricia J. Propolanis, Terry
Rucker, Nuria I. Rusch-Weber, Janele Seyer, Peter B. Smith, Michele L.
Tigue, Jennifer Wasson, Brian Westover, and Orchid White.
(13) The beneficial owners are Donald and Margaret Conley.
(14) The beneficial owner is Charles W. Davidson.
(15) The beneficial owners are William B. Landau and Betty L. Schram.
(16) The individual is affiliated with Noble International Investments, Inc., a
registered broker-dealer. The individual acquired 22,100 shares from Noble
Financial Investment, Inc. On March 8, 2005, Noble Financial Investments,
Inc. exercised warrants for 44,200 shares. Those shares are now held by Mr.
Horne and Mr. Pronk.
(17) Refers to L & D Construction Money Purchase Pension Plan. The beneficial
owners are: Ricardo Amezcua, Robert Beatty, Peitro Brezzo, Charles Buxton,
Sue Byron, Jennifer Cheng, Charles Davidson, Steve Davis, Michael Delua,
Don Edwards, Jeff Ford, Jose Garcia, Robert Graham, Juan Hernandez, Pam
Husted, Jim Kempton, Harold Kniss, Richard Lander, Michael Lodoen, Stpehn
Lodoen, Cheryl Lytle, Ted Lytle, Joseph Manzi, Lisa Manzi, Thuy Nguyen,
Michael Pearson, Stan Rufener, Karen Sabin, Leonardo Santiago, WM
Shoffstall, Virgil Tarpley, Karen Valerio, Ronnie Vanderbyl, Chat Vong, Al
Weigal, Kevin Weigal, Byron Weslund, Anakarina White, and Steve Wilson.
(18) The beneficial owner is Lawrence Cooper.
(19) The beneficial owners are Chang Y. Lee and Florence Y. Lee.
(20) Mr. Rosier is affiliated with Brookstreet Securities Corporation, a
registered broker-dealer.
11
EMPLOYEE SELLING STOCKHOLDERS
Michael W. Levin, our President, Chief Executive Officer and Chairman, acquired
stock options, the underlying shares of which are included in this prospectus,
in June 2003, pursuant to an employment agreement effective as of July 1, 2003.
We issued to Michael Levin stock options to purchase up to 500,000 shares of
common stock, exercisable at $1.00 per share and expiring in June 2008. Options
to purchase 250,000 shares vested on the grant date, options to purchase an
additional 125,000 shares vested on June 30, 2004, and the remaining options to
purchase an additional 125,000 shares are to vest on June 30, 2005.
Frances Blanco, Vice President and a director, acquired 25,000 stock options,
the underlying shares of which are included in this prospectus, on April 7,
2003, pursuant to terms of employment. The stock options vested on April 6, 2004
and are exercisable until April 5, 2008 at $0.50 per share.
Frances Blanco, Vice President and a director, acquired 100,000 stock options,
the underlying shares of which are included in this prospectus, on May 24, 2004.
Options to purchase 50,000 shares vested on the grant date, options to purchase
an additional 25,000 shares are to vest on May 24, 2005, and the remaining
options to purchase an additional 25,000 shares are to vest on May 24, 2006.
Duncan Huyler, Vice President, acquired 25,000 stock options, the underlying
shares of which are included in this prospectus, on April 7, 2003, pursuant to
terms of employment. The stock options vested on April 6, 2004 and are
exercisable until April 5, 2008 at $0.50 per share.
Duncan Huyler, Vice President, acquired 100,000 stock options, the underlying
shares of which are included in this prospectus, on May 24, 2004. Options to
purchase 50,000 shares vested on the grant date, options to purchase an
additional 25,000 shares are to vest on May 24, 2005, and the remaining options
to purchase an additional 25,000 shares are to vest on May 24, 2006.
Duncan Yates, our former Vice President, acquired 25,000 stock options, the
underlying shares of which are included in this prospectus, on April 7, 2003,
pursuant to terms of employment. The stock options vested on April 6, 2004 and
are exercisable until April 5, 2008 at $0.50 per share. Mr. Yates' employment
ended in March 11, 2005.
Donald Gunn, Vice President and a director, acquired 25,000 stock options, the
underlying shares of which are included in this prospectus, on April 7, 2003,
pursuant to terms of employment. The stock options vested on April 6, 2004 and
are exercisable until April 5, 2008 at $0.50 per share.
Randy Hooker, a former employee, acquired 25,000 stock options, the underlying
shares of which are included in this prospectus, on April 7, 2003, pursuant to
terms of employment. The stock options vested on April 6, 2004 and are
exercisable until April 5, 2008 at $0.50 per share. Mr. Hooker exercised the
stock options on January 28, 2005.
OTHER SELLING STOCKHOLDERS
On May 31, 2001, we issued warrants to purchase up to 200,000 shares of our
common stock at $1.00 per share to Consonant Services Group in consideration for
consulting services. Consonant Services Group a joint venture of which Paul
Baker, a director of Media Sciences, is a member and the beneficial owner of
25,000 warrants issued to Consonant Services Group. The other members of the
group, none of whom are affiliates of the company, are: Mitchell Baker, Harold
and Marsha Kugelman, Neil Hanley, Leon Steinberg, Andrew Kesnak, and David
D'Anna. The warrants, which were valued at $25,000, based on the value of
consulting services received, expire on May 31, 2006.
12
On June 14, 2002, we issued short-term promissory notes aggregating $175,000 and
warrants to purchase up to 87,500 shares of our common stock exercisable for
five years at $1.00 per share to seven note holders: Paul Levin, Frank and Edna
Blanco, Nathan D. Watters, Adam H. Watters, Mitchell Baker, Esther Baker, and
Harold and Marsha Kugelman. The note holders were persons who bear the following
relationships with Media Sciences or with our officers and directors: Paul Levin
is the father of Michael W. Levin, President and Chairman of Media Sciences;
Frank and Edna Blanco are the parents of Frances Blanco, Vice President and a
director of Media Sciences; Mitchell Baker is the son of Paul Baker, a director
of Media Sciences; and Esther Baker is the wife of Paul Baker. Three of the four
new note holders are persons who bear the following relationships with Media
Sciences or with our officers and directors: Paul Levin is the father of Michael
W. Levin, President and Chairman of Media Sciences; Frank and Edna Blanco are
the parents of Frances Blanco, Vice President and a director of Media Sciences;
and Mitchell Baker is the son of Paul Baker, a director of Media Sciences. Each
of Michael W. Levin, Frances Blanco, and Paul Baker disclaims beneficial
ownership of these notes and related warrants, except that Paul Baker may be
deemed the beneficial owner of the $25,000 note and 12,500 warrants acquired by
his wife as part of the transaction.
GFX Investments, LLC, an entity controlled by Richard L. Scott, purchased
1,000,000 shares of common stock from us for $1.25 million on June 30, 2004. In
accordance with the terms of a related registration rights agreement with GFX
Investments, LLC, we agreed to indemnify GFX Investments, LLC against certain
liabilities under the Securities Act or contribute to payments which GFX
Investments, LLC may be required to make in that respect. In conjunction with
the investment, we agreed to appoint a nominee of GFX Investments, Alan Bazaar,
Vice President and Portfolio Manager for Richard L. Scott Investments, to our
board of directors. Prior to June 30, 2004, we had no material relationship with
GFX Investments, LLC, or its affiliates.
On March 2, 2005, pursuant to a Common Stock Purchase Agreement, we sold an
aggregate of 500,000 restricted and unregistered shares of our common stock at a
price of $2.00 per share to MicroCapital Fund LP and MicroCapital Fund Ltd. for
aggregate gross proceeds of $1,000,000. MicroCapital Fund LP purchased 375,000
shares and MicroCapital Fund Ltd. purchased 125,000 shares. In connection with
the sale, we granted the investors certain registration rights, agreeing to file
a registration statement for the resale of restricted shares that they hold.
Each of MicroCapital Fund LP and MicroCapital Fund Ltd. represented to us that
it was acquiring the shares for its own account for investment and not with a
view to resell or distribute the shares.
On March 2, 2005, MicroCapital Fund Ltd. purchased 100,000 shares of restricted
common stock from Michael W. Levin, our President, Chief Executive Officer and
Chairman, at $2.00 per share, which is the same price as the shares that
MicroCapital Fund Ltd. purchased from us on March 2, 2005. MicroCapital Fund
Ltd. represented that it was acquiring the shares solely for its own account for
investment and not with a view to resell or distribute the shares. Our Board of
Directors approved the sale by Mr. Levin.
13
All other shares included in this prospectus relate to securities issued in
connection with a private placement offering we concluded in March 2000. From
October 1999 to March 10, 2000, we sold 550,000 units of our securities and
raised gross proceeds of approximately $5,500,000. Each unit consisted of one
share of convertible preferred stock and a warrant, exercisable for five years
at $4.50 per share, to purchase two shares of common stock. In connection with
the private placement, we issued to the investors and consultants, including the
placement agent and members of the selling group, an aggregate of 550,000 shares
of preferred stock and 1,956,500 warrants, exercisable for five years from the
date of issuance, to purchase shares of common stock, as follows: warrants to
purchase 15,000 shares at $3.00 per share which expired on September 29, 2004;
warrants to purchase 40,000 shares at $3.75 per share which expired on December
8, 2004; warrants to purchase 15,000 shares at $4.00 per share which expired on
September 29, 2004; warrants to purchase 550,000 shares at $3.75 per share which
expired unexercised on March 9, 2005; warrants to purchase 236,500 shares at
$1.65 per share of which 221,500 warrants were exercised in March 2005 and
15,000 warrants expired on March 9, 2005; and warrants to purchase 1,100,000
shares at $4.50 per share which expired on September 29, 2004. In lieu of cash
dividends, certain preferred shareholders elected to receive certain quarterly
dividend payments through common stock issuances, valued at $0.95 to $1.10 per
share. In our fiscal years 2001, 2002 and 2003, we issued an aggregate of
239,837 shares of common stock as dividends on preferred stock. On December 31,
2003, we concluded an exchange offer that provided our preferred stockholders an
opportunity to exchange each outstanding preferred share for 10 shares of our
common stock. Preferred shareholders who accepted the offer waived their rights
to unpaid dividends and interest on their preferred stock. As of December 31,
2003, preferred shareholders tendered a total of 457,500 preferred shares,
representing 84% of the outstanding preferred shares, in exchange for 4,575,000
shares of common stock. Pursuant to the terms of the certificate of designation
for our preferred stock, the other 90,000 preferred shares outstanding were
converted into 450,000 shares of common stock at the rate of one preferred share
into five common shares. Subsequent to December 31, 2003, we agreed with Charles
C. Bearoff and Charles F. Bearoff, former holders of 50,000 preferred shares who
did not timely accept our preferred stock offer of conversion which concluded on
December 31, 2003 and whose preferred shares were automatically converted into
250,000 shares of common stock pursuant to the terms of the preferred stock
designation, to let them receive an additional 250,000 unregistered shares of
common stock in consideration of return of dividend payments and other
consideration, such that we and they are in similar positions as if the former
preferred shareholders had timely accepted the offer of conversion on December
31, 2003.
Other than Henry Royer, no other director, officer, or affiliate of the Company
beneficially owned shares of the Company's preferred stock. Henry Royer, a
director of the company, is President of Berthel SBIC, LLC, which had owned
100,000 shares of preferred stock. Berthel tendered its preferred shares
pursuant to the exchange offer. Henry Royer recused himself from the Board of
Directors discussions and authorization of the exchange offer. Berthel purchased
its shares of preferred stock from the Company in the same private placement
offering of units of the Company's securities commenced in October 1999 pursuant
to which the other outstanding preferred shareholders purchased their preferred
stock under the offering price and terms of the private placement offering.
INFORMATION ABOUT CERTAIN SELLING STOCKHOLDERS
Berthel SBIC LLC is affiliated with Berthel, Fisher & Company Financial
Services, Inc., a registered broker-dealer. In December 1999, Berthel SBIC LLC
purchased 100,000 units of our securities in a private placement offering. Each
unit consisted of one share of convertible preferred stock and a warrant,
exercisable for five years at $4.50 per share, to purchase two shares of common
stock. Berthel SBIC LLC purchased the securities in the ordinary course of
business and had no agreements or understandings, directly or indirectly, with
any person to distribute the securities at the time of the purchase. In 2001 and
2002, Berthel SBIC also received an aggregate of 112,797 shares of common stock
as dividend payment on the preferred stock. At varying times, Berthel SBIC sold
55,557 shares in the open market. On December 31, 2003, we concluded an exchange
offer that provided our preferred stockholders an opportunity to exchange each
outstanding preferred share for 10 shares of our common stock. Pursuant to the
exchange offer, Berthel SBIC's 100,000 shares of preferred stock were exchanged
for 1,000,000 shares of common stock. The warrants issued as part of the units
expired unexercised.
14
Brookstreet Securities Corporation Inc. is a registered broker-dealer.
Brookstreet Securities Corporation served as the lead placement agent for a
private placement offering that we conducted between December 1999 and March
2000. As compensation for its placement agent services, we issued to Brookstreet
Securities Corporation warrants to purchase 167,250 shares at $3.75 which
expired unexercised on March 9, 2005, and warrants to purchase 177,130 shares at
$1.65, of which it assigned 88,565 warrants to one of its agents, David L.
Rosier. On March 4, 2005, it exercised its 88,565 warrants at $1.65 per share.
Wayne Horne and Nico P. Pronk are affiliated with Noble International
Investments, Inc., a registered broker-dealer. Noble International Investments,
Inc. was a member of the selling group, led by Brookstreet Securities
Corporation as the lead placement agent, for a private placement offering that
we conducted between December 1999 and March 2000. As compensation for its
placement agent services, we issued to Noble International Investments, Inc.
warrants to purchase 33,150 shares at $3.75 which expired unexercised on March
9, 2005, and warrants to purchase 44,200 shares at $1.65 which were exercised on
March 8, 2005. Each of Wayne Horne and Nico P. Pronk acquired 22,100 shares from
Noble Financial Investments, Inc. after such warrant exercises.
David L. Rosier is affiliated with Brookstreet Securities Corporation, a
registered broker-dealer. In December 1999, Mr. Rosier purchased 2,500 units of
our securities in a private placement offering. Each unit consisted of one share
of convertible preferred stock and a warrant, exercisable for five years at
$4.50 per share, to purchase two shares of common stock. Mr. Rosier purchased
the securities in the ordinary course of business and had no agreements or
understandings, directly or indirectly, with any person to distribute the
securities at the time of the purchase. On December 31, 2003, we concluded an
exchange offer that provided our preferred stockholders an opportunity to
exchange each outstanding preferred share for 10 shares of our common stock.
Pursuant to the exchange offer, Mr. Rosier's 2,500 shares of preferred stock
were exchanged for 25,000 shares of common stock. The warrants issued as part of
the units expired unexercised. Mr. Rosier also had acquired 88,565 warrants
exercisable at $1.65 from Brookstreet Securities Corporation in 2000. Mr. Rosier
exercised 88,565 warrants at $1.65 per share in March 2005.
15
PLAN OF DISTRIBUTION
We are registering shares of common stock offered for sale by this prospectus on
behalf of the selling shareholders. The shares of common stock may be offered
from time to time by the selling stockholders or their donees, pledgees,
transferees or other successors in interest for resale by this prospectus in one
or more transactions at fixed prices, at market prices at the same time of sale,
at varying prices determined at the time of sale or at negotiated prices.
The selling stockholders may offer their shares of common stock in one or more
of the following transactions:
o on the American Stock Exchange, any other exchange upon which our
shares may trade in the future, or in the over-the-counter market;
o to purchasers directly;
o in ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o through purchases by a broker or dealer as principal and resale by
such broker or dealer for its own account pursuant to this prospectus;
o block trades in which a broker-dealer so engaged will attempt to sell
the shares as agent but may take a position and resell a portion of
the block as principal to facilitate the transaction;
o in connection with short sales; or
o in any combination of one or more of these methods.
Selling stockholders may sell their shares of common stock:
o at market prices prevailing at the time of sale;
o at prices related to such prevailing market prices;
o at negotiated prices;
o at fixed prices; or
o at a combination of such prices.
The selling shareholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale of shares of common stock
currently held by selling shareholders. The selling shareholders may also sell
shares under Rule 144 of the Securities Act of 1933, as amended, if available,
rather than under this prospectus.
We will pay for substantially all of the expenses incident to the offer and sale
of the shares of common stock offered by the selling stockholders using this
prospectus. The selling stockholders will pay applicable stock transfer taxes,
transfer fees and brokerage commissions or underwriting or other discounts.
To comply with the securities laws of certain states, the shares of common stock
offered by this prospectus may need to be offered or sold in such jurisdictions
only through registered or licensed brokers or dealers.
The offering of the shares of common stock pursuant to this prospectus will
terminate on the earlier of the time when the shares of common stock:
o have been sold by the selling stockholders pursuant to this
prospectus;
o the time when all of the shares of common stock are eligible to be
sold pursuant to Rule 144(k) under the Securities Act; or
o this prospectus is no longer effective.
16
LEGAL MATTERS
The validity of the shares offered pursuant to this prospectus will be passed
upon for us by Law Offices of Dan Brecher, New York, New York, counsel to Media
Sciences International, Inc. Dan Brecher, the sole principal of the law firm,
through his individual retirement accounts and retirement plan, owns 72,451
shares of our common stock. Mr. Brecher is a selling stockholder of 72,451
shares pursuant to this prospectus.
EXPERTS
The consolidated financial statements, as of and for the year ended June 30,
2004, incorporated in this prospectus by reference to our Annual Report on Form
10-KSB for the year ended June 30, 2004, have been so incorporated in reliance
on the report of J.H. Cohn LLP, independent registered public accounting firm,
given the authority of said firm as experts in auditing and accounting.
The consolidated financial statements, as of and for the year ended June 30,
2003, incorporated in this prospectus by reference to our Annual Report on Form
10-KSB for the year ended June 30, 2004, have been so incorporated in reliance
on the report of Wiss & Company LLP, independent registered public accounting
firm, given the authority of said firm as experts in auditing and accounting.
INDEMNIFICATION
We will indemnify our directors, officers, and controlling persons against
liability under the Securities Act to the extent permitted by the General
Corporation Law of Delaware. We will indemnify them against all expenses and
liabilities that are reasonably incurred in connection with this prospectus to
the extent allowed under Delaware law.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer 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 us of expenses incurred or paid by any of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by such directors, officers or controlling persons in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
us is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference the information we file with the
SEC by referring you to those documents. Any information we incorporate in this
manner is considered part of this prospectus. Our reporting number under the
Exchange Act is 1-16053.
The following documents we have filed with the SEC are incorporated by reference
into this prospectus:
o Our Annual Report on Form 10-KSB for the year ended June 30, 2004
filed on September 28, 2004;
o Our Quarterly Reports on Form 10-QSB for the quarter ended September
30, 2004 filed on November 12, 2004 and for the quarter ended December
31, 2004 filed on February 14, 2005;
o Our Current Reports on Form 8-K filed on October 4, 2004, December 20,
2004, January 24, 2005, and March 4, 2005, and our Current Report on
Form 8-K/A filed on March 14, 2005;
o Our Proxy Statement filed on November 17, 2004; and
o The description of our common stock contained in our registration
statement on Form 8-A filed on August 8, 2000.
17
Additionally, all documents we file with the SEC pursuant to Sections 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 of the shares offered hereby shall be
deemed to be incorporated by reference into this prospectus and shall
automatically update and supersede this information.
We will provide, without charge, to each person, including any beneficial owner,
to whom a copy of this prospectus is delivered, upon such person's written or
oral request, a copy of any and all of the documents incorporated by reference
in this prospectus (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the information that this
prospectus incorporates). Requests should be directed to Media Sciences
International, Inc., 8 Allerman Road, Oakland, New Jersey 07436, Attention:
Corporate Secretary, telephone: (201) 677-9311.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, as amended, with respect to the common stock offered by
this prospectus. This prospectus, filed as part of the registration statement,
does not contain all of the information set forth in the registration statement
and its exhibits and schedules. For further information regarding us and the
shares offered hereby, please refer to the registration statement. You may
inspect a copy of the registration statement without charge at the SEC's
principal offices, and you may obtain copies of all or any part of the
registration statement from such office upon payment of the fees prescribed by
the SEC.
We are required by the Securities Exchange Act of 1934, as amended, to file
reports, proxy statements and other information with the SEC. These filings may
be read and copied at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room and any applicable copying fee by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information about us that we file
electronically with the SEC. Our filings with the SEC are available to the
public on the SEC's web site at http://www.sec.gov. Our company maintains an
Internet site at www.mediasciences.com.
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by us in
connection with the offer and sale of the common stock being registered.
SEC registration fee $ 1,390.38*
Legal fees and expenses $ 5,000.00
Blue Sky fees and expenses $ 1,000.00
Accounting fees and expenses $ 2,000.00
Transfer agent fees $ 500.00
Printing expenses $ 500.00
----------
Total $10,390.38
* Includes $737.56 in SEC registration fee previously paid and being offset
against this registration statement.
The foregoing items, except for the Securities and Exchange Commission
registration fee, are estimated. We will pay all of the expenses listed above.
The selling stockholders will not pay any of those expenses. The selling
stockholders are responsible for any stock transfer taxes, transfer fees, and
brokerage commissions or underwriting discounts and commissions.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our Certificate of Incorporation provides that to the fullest extent permitted
by the General Corporation Law of Delaware, including, without limitation, as
provided in Section 102(b)(7) of the General Corporation Law of Delaware, as the
same exists or may hereafter be amended, any of our director shall not be
personally liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director. Section 102(b)(7) of the Delaware General
Corporation Law permits a corporation to provide in its certificate of
incorporation that a director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability:
o for any breach of the director's duty of loyalty to the corporation or
its stockholders;
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
o for payments of unlawful dividends or unlawful stock repurchases or
redemptions; or
o for any transaction from which the director derived an improper
personal benefit.
If the General Corporation Law of Delaware is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of our directors shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of Delaware, as so amended. Any
repeal or modification of the provision of the Certificate of Incorporation by
our stockholders shall not adversely affect any right or protection of our
directors existing at the time of such repeal or modification or with respect to
events occurring prior to such time.
Our Certificate of Incorporation and Bylaws further provide for the
indemnification of our directors and officers to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law, including circumstances in
which indemnification is otherwise discretionary. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to our directors,
officers and controlling persons pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
II-1
Section 145 of the Delaware General Corporation Law provides that a corporation
may indemnify directors and officers as well as other employees and individuals
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
any threatened, pending or completed actions, suits or proceedings in which such
person is made a party by reason of such person being or having been a director,
officer, employee of or agent to the registrant. The statute provides that it is
not exclusive of other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
Our Certificate of Incorporation provides that we will indemnify any of our
directors, officers, employees, or agents with respect to actions, suits, or
proceedings relating to us and, subject to certain limitations, a director will
not be personally liable for monetary damages for breach of his or her fiduciary
duty.
Our directors or officers, or a person who at our request serves as a director,
officer, employee or agent of another business entity, shall be indemnified by
us against all expense, liability and loss, including attorneys' fees,
judgments, fines, other expenses and losses, that is reasonably incurred or
suffered in connection with any action, suit or proceeding or threatened action,
suit or proceeding. For a person to receive indemnification under this
provision, our Board of Directors must authorize the indemnification, and the
person seeking indemnification must agree to repay us for all amounts advanced
to him or her if a court of law ultimately determines that the person should not
have been indemnified by us. A person who is entitled to indemnification may
recover from us, and may sue us if we fail to make timely payment.
ITEM 16. EXHIBITS
The following exhibits either are filed herewith or incorporated by reference to
documents previously filed or will be filed by amendment, as indicated below:
Exhibit Description
------- -----------
2 Agreement of Change in Corporate Structure (Incorporated by
reference to Exhibit 2 of Quarterly Report on Form 10-QSB filed on
May 15, 2002).
3(i)(1) Certificate of Incorporation of Cadapult Graphic Systems, Inc., a
Delaware corporation (Incorporated by reference to Exhibit 3.1 of
Quarterly Report on Form 10-QSB/A filed on September 1, 1998).
3(i)(2) Certificate of Amendment of Certificate of Incorporation of Cadapult
Graphic Systems, Inc. (Incorporated by reference to Exhibit 3(i)(5)
of Annual Report on Form 10-KSB filed on September 28, 1999).
3(i)(3) Certificate of Incorporation of Media Sciences, Inc. (Incorporated
by reference to Exhibit 3(i)(6) of Annual Report on Form 10-KSB
filed on September 28, 1999).
3(i)(4) Certificate of Amendment of Certificate of Incorporation of Cadapult
Graphic Systems, Inc. (Incorporated by reference to Exhibit 3(i)(1)
of Quarterly Report on Form 10-QSB filed on May 15, 2002).
3(i)(5) Certificate of Incorporation of Cadapult Graphic Systems, Inc. (a
New Jersey corporation) (Incorporated by reference to Exhibit
3(i)(2) of Quarterly Report on Form 10-QSB filed on May 15, 2002).
3(i)(6) Certificate of Incorporation of Media Sciences UK Limited,
with Memorandum of Association (Incorporated by reference to
Exhibit 3(i)(1) of Current Report on Form 8-K filed on March
4, 2005).
3(ii) By-Laws (Incorporated by reference to Exhibit 3.2 of Quarterly
Report on Form 10-QSB/A filed on September 1, 1998).
4.1 Specimen of common stock certificate (Incorporated by reference to
Exhibit 4.7 of Form 8-A filed on August 8, 2000).
4.2 Specimen of preferred stock certificate (Incorporated by reference
to Exhibit 4.8 of Form 8-A filed on August 8, 2000).
4.3 1998 Incentive Plan (Incentive Stock Option Plan) (Incorporated by
reference to Exhibit 4.1 of Annual Report on Form 10-KSB filed on
September 28, 1999).
II-2
4.4 Certificate of Designation (Incorporated by reference to Exhibit 4.5
of Registration Statement on Form SB-2, Registration Number
333-91005, originally filed on November 15, 1999).
4.5 Form of Warrant Certificate for Purchasers of Units (Incorporated by
reference to Exhibit 4.6 of Registration Statement on Form SB-2,
Registration Number 333-91005, originally filed on November 15,
1999).
4.6 Certificate of Amendment of Certificate of Designation of Series A
Preferred Stock (Incorporated by reference to Exhibit 3(i)(6) of
Annual Report on Form 10-KSB filed on September 15, 2003).
4.7 Certificate of Amendment of Certificate of Designation of Series A
Preferred Stock (Incorporated by reference to Exhibit 4.7 of
Registration Statement on Form SB-2, Registration Number 333-112340,
filed on January 30, 2004).
5.1* Opinion of Law Offices of Dan Brecher
10.1 Lease Agreement (Incorporated by reference to Exhibit 10.13 of
Annual Report on Form 10-KSB filed on or about September 28, 2000).
10.2 Agreement with Consonant Services Group (Incorporated by reference
to Exhibit 10.6 of Registration Statement on Form SB-2, Registration
Number 333-83668, filed on March 4, 2002).
10.3 Form of Warrant Agreement with Consonant Services Group
(Incorporated by reference to Exhibit 10.11 of Registration
Statement on Form SB-2, Registration Number 333-83668, filed on
March 4, 2002).
10.4 Form of Promissory Note issued in June 2002 (Incorporated by
reference to Exhibit 10.14 of Annual Report on Form 10-KSB filed on
October 15, 2002).
10.5 Form of Warrants issued in June 2002 (Incorporated by reference to
Exhibit 10.14 of Annual Report on Form 10-KSB filed on October 15,
2002).
10.6 Form of Employment Agreement with Michael W. Levin (Incorporated by
reference to Exhibit 10.16 of Annual Report on Form 10-KSB filed on
September 15, 2003).
10.7 Form of Loan and Security Agreement (Incorporated by reference to
Exhibit 10.17 of Annual Report on Form 10-KSB filed on September 15,
2003).
10.8 Form of Option Agreement with Management issued April 2003
(Incorporated by reference to Exhibit 10.15 of Registration
Statement on Form SB-2, Registration Number 333-112340, filed on
January 30, 2004).
10.9 Option Agreement with Frances Blanco issued May 2004 (Incorporated
by reference to Exhibit 10.16 of Registration Statement on Form
SB-2, filed on July 30, 2004).
10.10 Option Agreement with Duncan Huyler issued May 2004 (Incorporated by
reference to Exhibit 10.17 of Registration Statement on Form SB-2,
filed on July 30, 2004).
10.11 First Amendment to Loan and Security Agreement, dated June 11, 2004
(Incorporated by reference to Exhibit 10.18 of Registration
Statement on Form SB-2, filed on July 30, 2004).
10.12 Term Note, dated June 11, 2004 (Incorporated by reference to Exhibit
10.19 of Registration Statement on Form SB-2, filed on July 30,
2004).
10.13 Common Stock Purchase Agreement, dated June 30, 2004 (Incorporated
by reference to Exhibit 10.20 of Registration Statement on Form
SB-2, filed on July 30, 2004).
10.14 Registration Rights Agreement, dated June 30, 2004 (Incorporated by
reference to Exhibit 10.21 of Registration Statement on Form SB-2,
filed on July 30, 2004).
10.15 Lease Agreement (Incorporated by reference to Exhibit 10 of Current
Report on Form 8-K/A filed on March 14, 2005).
10.16 Loan Agreement with PNC Bank (Incorporated by reference to Exhibit
10 of Current Report on Form 8-K filed on December 20, 2004).
10.17 Sublease Agreement (Incorporated by reference to Exhibit 10 of
Current Report on Form 8-K filed on January 24, 2005).
10.18 Common Stock Purchase Agreement, dated March 2, 2005, with
Registration Rights Agreement (Incorporated by reference to Exhibit
10.1 of Current Report on Form 8-K filed on March 4, 2005).
23.1** Consent of J.H. Cohn LLP
23.2** Consent of Wiss & Company, LLP
23.3* Consent of Law Offices of Dan Brecher (included in Exhibit 5.1)
---------
* Filed herewith
** Previously filed.
II-3
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individuall
or together, represent a fundamental change in the information in the
registration statement;
(iii) Include any additional or changed material information on the
plan of distribution.
Provided, however, that the registrant does not need to make
post-effective amendments with respect to the information set forth in
paragraphs (a) and (b) above if the information is incorporated by reference
from periodic reports filed by the registrant under the Exchange Act.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
(c) In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
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 small business issuer 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.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Oakland, State of New Jersey, on March 18, 2005.
MEDIA SCIENCES INTERNATIONAL, INC.
By: /s/ Michael W. Levin
-----------------------
Michael W. Levin,
Chief Executive Officer and President
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.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ Michael W. Levin Chairman of the Board, President, March 18, 2005
--------------------
Michael W. Levin and Chief Executive Officer
/s/ Denise Hawkins Vice President, Controller March 18, 2005
------------------
Denise Hawkins (Principal Financial Officer) and
Secretary
/s/ Frances Blanco Director, Vice President, and March 18, 2005
------------------
Frances Blanco Treasurer
/s/ Paul C. Baker Director March 18, 2005
------------------
Paul C. Baker
/s/ Alan L. Bazaar Director March 18, 2005
------------------
Alan L. Bazaar
/s/ Edwin Ruzinsky Director March 18, 2005
------------------
Edwin Ruzinsky
/s/ Henry Royer Director March 18, 2005
------------------
Henry Royer
II-5
EXHIBIT INDEX
Exhibit Description
------- -----------
2 Agreement of Change in Corporate Structure (Incorporated by
reference to Exhibit 2 of Quarterly Report on Form 10-QSB filed on
May 15, 2002).
3(i)(1) Certificate of Incorporation of Cadapult Graphic Systems, Inc., a
Delaware corporation (Incorporated by reference to Exhibit 3.1 of
Quarterly Report on Form 10-QSB/A filed on September 1, 1998).
3(i)(2) Certificate of Amendment of Certificate of Incorporation of Cadapult
Graphic Systems, Inc. (Incorporated by reference to Exhibit 3(i)(5)
of Annual Report on Form 10-KSB filed on September 28, 1999).
3(i)(3) Certificate of Incorporation of Media Sciences, Inc. (Incorporated
by reference to Exhibit 3(i)(6) of Annual Report on Form 10-KSB
filed on September 28, 1999).
3(i)(4) Certificate of Amendment of Certificate of Incorporation of Cadapult
Graphic Systems, Inc. (Incorporated by reference to Exhibit 3(i)(1)
of Quarterly Report on Form 10-QSB filed on May 15, 2002).
3(i)(5) Certificate of Incorporation of Cadapult Graphic Systems, Inc. (a
New Jersey corporation) (Incorporated by reference to Exhibit
3(i)(2) of Quarterly Report on Form 10-QSB filed on May 15, 2002).
3(i)(6) Certificate of Incorporation of Media Sciences UK Limited,
with Memorandum of Association (Incorporated by reference to
Exhibit 3(i)(1) of Current Report on Form 8-K filed on March
4, 2005).
3(ii) By-Laws (Incorporated by reference to Exhibit 3.2 of Quarterly
Report on Form 10-QSB/A filed on September 1, 1998).
4.1 Specimen of common stock certificate (Incorporated by reference to
Exhibit 4.7 of Form 8-A filed on August 8, 2000).
4.2 Specimen of preferred stock certificate (Incorporated by reference
to Exhibit 4.8 of Form 8-A filed on August 8, 2000).
4.3 1998 Incentive Plan (Incentive Stock Option Plan) (Incorporated by
reference to Exhibit 4.1 of Annual Report on Form 10-KSB filed on
September 28, 1999).
4.4 Certificate of Designation (Incorporated by reference to Exhibit 4.5
of Registration Statement on Form SB-2, Registration Number
333-91005, originally filed on November 15, 1999).
4.5 Form of Warrant Certificate for Purchasers of Units (Incorporated by
reference to Exhibit 4.6 of Registration Statement on Form SB-2,
Registration Number 333-91005, originally filed on November 15,
1999).
4.6 Certificate of Amendment of Certificate of Designation of Series A
Preferred Stock (Incorporated by reference to Exhibit 3(i)(6) of
Annual Report on Form 10-KSB filed on September 15, 2003).
4.7 Certificate of Amendment of Certificate of Designation of Series A
Preferred Stock (Incorporated by reference to Exhibit 4.7 of
Registration Statement on Form SB-2, Registration Number 333-112340,
filed on January 30, 2004).
5.1* Opinion of Law Offices of Dan Brecher
10.1 Lease Agreement (Incorporated by reference to Exhibit 10.13 of
Annual Report on Form 10-KSB filed on or about September 28, 2000).
10.2 Agreement with Consonant Services Group (Incorporated by reference
to Exhibit 10.6 of Registration Statement on Form SB-2, Registration
Number 333-83668, filed on March 4, 2002).
10.3 Form of Warrant Agreement with Consonant Services Group
(Incorporated by reference to Exhibit 10.11 of Registration
Statement on Form SB-2, Registration Number 333-83668, filed on
March 4, 2002).
10.4 Form of Promissory Note issued in June 2002 (Incorporated by
reference to Exhibit 10.14 of Annual Report on Form 10-KSB filed on
October 15, 2002).
10.5 Form of Warrants issued in June 2002 (Incorporated by reference to
Exhibit 10.14 of Annual Report on Form 10-KSB filed on October 15,
2002).
10.6 Form of Employment Agreement with Michael W. Levin (Incorporated by
reference to Exhibit 10.16 of Annual Report on Form 10-KSB filed on
September 15, 2003).
10.7 Form of Loan and Security Agreement (Incorporated by reference to
Exhibit 10.17 of Annual Report on Form 10-KSB filed on September 15,
2003).
10.8 Form of Option Agreement with Management issued April 2003
(Incorporated by reference to Exhibit 10.15 of Registration
Statement on Form SB-2, Registration Number 333-112340, filed on
January 30, 2004).
10.9 Option Agreement with Frances Blanco issued May 2004 (Incorporated
by reference to Exhibit 10.16 of Registration Statement on Form
SB-2, filed on July 30, 2004).
10.10 Option Agreement with Duncan Huyler issued May 2004 (Incorporated by
reference to Exhibit 10.17 of Registration Statement on Form SB-2,
filed on July 30, 2004).
10.11 First Amendment to Loan and Security Agreement, dated June 11, 2004
(Incorporated by reference to Exhibit 10.18 of Registration
Statement on Form SB-2, filed on July 30, 2004).
10.12 Term Note, dated June 11, 2004 (Incorporated by reference to Exhibit
10.19 of Registration Statement on Form SB-2, filed on July 30,
2004).
10.13 Common Stock Purchase Agreement, dated June 30, 2004 (Incorporated
by reference to Exhibit 10.20 of Registration Statement on Form
SB-2, filed on July 30, 2004).
10.14 Registration Rights Agreement, dated June 30, 2004 (Incorporated by
reference to Exhibit 10.21 of Registration Statement on Form SB-2,
filed on July 30, 2004).
10.15 Lease Agreement (Incorporated by reference to Exhibit 10 of Current
Report on Form 8-K/A filed on March 14, 2005).
10.16 Loan Agreement with PNC Bank (Incorporated by reference to Exhibit
10 of Current Report on Form 8-K filed on December 20, 2004).
10.17 Sublease Agreement (Incorporated by reference to Exhibit 10 of
Current Report on Form 8-K filed on January 24, 2005).
10.18 Common Stock Purchase Agreement, dated March 2, 2005, with
Registration Rights Agreement (Incorporated by reference to Exhibit
10.1 of Current Report on Form 8-K filed on March 4, 2005).
23.1** Consent of J.H. Cohn LLP
23.2** Consent of Wiss & Company, LLP
23.3* Consent of Law Offices of Dan Brecher (included in Exhibit 5.1)
---------
* Filed herewith
** Previously filed.