FILED BY: V-ONE CORPORATION
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14a-12 OF THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: V-ONE CORPORATION
COMMISSION FILE NO. 0-21511
In connection with the proposed transactions, V-ONE Corporation ("V-ONE")
and SteelCloud, Inc. ("SteelCloud") intend to file relevant materials with the
Securities and Exchange Commission ("SEC"), including one or more registration
statement(s) that contain a prospectus and proxy/consent solicitation statement.
Because those documents will contain important information, holders of V-ONE
common stock and SteelCloud common stock are urged to read them, if and when
they become available. When filed with the SEC, they will be available for free
(along with any other documents and reports filed by V-ONE and SteelCloud with
the SEC) at the SEC's website, www.sec.gov, and V-ONE stockholders and
SteelCloud stockholders will receive information at an appropriate time on how
to obtain transaction-related documents for free from V-ONE and SteelCloud. Such
documents are not currently available.
V-ONE and its directors and executive officers may be deemed to be
participants in the solicitation of proxies or consents from the holders of
V-ONE common stock and SteelCloud common stock in connection with the proposed
transactions. Information about the directors and executive officers of V-ONE is
set forth in the proxy statement for V-ONE's 2004 Annual Meeting of
Stockholders, which was filed with the SEC on April 12, 2004. Investors may
obtain additional information regarding the interests of such participants by
reading the prospectus and proxy/consent solicitation statement if and when it
becomes available.
SteelCloud and its directors and executive officers may be deemed to be
participants in the solicitation of proxies or consents from the holders of
V-ONE common stock and SteelCloud common stock in connection with the proposed
transactions. Information about the directors and executive officers of
SteelCloud is set forth in the proxy statement for SteelCloud's 2004 Annual
Meeting of Stockholders, which was filed with the SEC on March 1, 2004.
Investors may obtain additional information regarding the interests of such
participants by reading the prospectus and proxy/consent solicitation statement
if and when it becomes available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities Act of
1933, as amended.
Acquisition FAQ June 1, 2004
V-ONE ANSWERS MOST FREQUENTLY ASKED QUESTIONS
ON PROPOSED ACQUISITION BY STEELCLOUD
On May 20, 2004, V-ONE Corporation (V-ONE) and SteelCloud, Inc. (SteelCloud)
announced the signing of a letter of intent for SteelCloud to acquire V-ONE in
an all-stock transaction. V-ONE believes that the interests of our investors,
employees, customers and partners will be best served through this business
combination. This document provides answers to the most frequently asked
questions from our shareholders regarding the proposed acquisition.
1. WHY DID V-ONE MANAGEMENT AND THE BOARD OF DIRECTORS DECIDE THE COMPANY SHOULD
BE ACQUIRED BY STEELCLOUD?
The combined capabilities of V-ONE and SteelCloud have the potential to
significantly expand the reach of V-ONE's technology and products to the
world's fastest growing security markets. With synergistic products, an
improved balance sheet and a shared vision, V-ONE and SteelCloud, once
combined, will be poised to be a leading innovator and marketer of security
solutions for the government and corporate enterprise sectors.
The network security environment has become increasingly competitive,
particularly over the past two years, as new entrants introduce products that
compete with V-ONE in the emerging application layer SSL VPN market. With
this heightened competition, V-ONE management realized that although we were
able to maintain accounts with long-standing customers, our weakened
financial position was inhibiting our ability to win new contracts, expand
our product development and protect and defend our intellectual property and
technology patents. At the same time, our cash flow was being constrained by
continuing delays in funding for projects we had hoped to begin implementing
in the first half of this year.
After a careful assessment of our financial position, we decided that in
order to position our products to receive the developmental and marketing
support they required, we needed to either raise additional capital or become
part of a larger organization with a synergistic technology mix and greater
financial resources than our own. V-ONE engaged H.C. Wainwright & Co. Inc. as
its financial advisor to conduct a comprehensive search for a strategic
partner. Our research concluded that SteelCloud was the best available
partner to enable V-ONE's technology to reach its optimum potential.
SteelCloud has a shared vision for building the security solution of
tomorrow, products that could augment the V-ONE technology and complementary
needs.
We believed then as we do now that this transaction fulfills our
responsibility to our shareholders to maximize the value of their investment.
2. WHY ARE V-ONE COMMON SHAREHOLDERS REQUIRED TO EXCHANGE 8.5 SHARES OF COMMON
STOCK FOR ONE SHARE OF STEELCLOUD COMMON STOCK?
The conversion of (approximately) 8.5 shares of V-ONE common stock for one
share of SteelCloud common stock reflects the approximate ratio of both
companies' stock prices at the signing of the letter of intent. It also
allows V-ONE to satisfy certain long-standing covenants with our preferred
shareholders. In management's estimation, the alternative of seeking
additional financing to secure and further the company's growth would have
been dilutive to current shareholder value and would have addressed only
V-ONE's fundamental need for cash without addressing market demands for a
fully supported, comprehensive security solution.
3. WHY DID V-ONE MANAGEMENT REVERSE SPLIT THE COMPANY'S COMMON STOCK IF IT WAS
CONTEMPLATING AN ACQUISITION? DID THIS REVERSE STOCK SPLIT HAVE A NEGATIVE
EFFECT ON THE CONSIDERATION TO BE RECEIVED BY V-ONE SHAREHOLDERS IN THE
STEELCLOUD TRANSACTION?
The Board of Director's decision to combine two shares of V-ONE common stock
into one share of common stock was made earlier this year and proxy materials
for V-ONE's Annual Meeting of Shareholders, at which our shareholders
approved the reverse stock split, were mailed to shareholders before we
contemplated a transaction with SteelCloud. The principal reasons for the
reverse stock split were the relatively low per share market price of the
company's common stock and the need to increase the number of shares of
common stock available for issuance to meet various business needs. The
reverse stock split did not affect the purchase price to be paid by
SteelCloud in the transaction and thus did not affect the value of the
consideration to be received by V-ONE shareholders for their shares of
company stock. The total consideration offered by SteelCloud to acquire all
of V-ONE's issued and outstanding capital stock was based on the inherent
value of V-ONE's products, technology and intellectual property and thus,
would remain the same both before and after the reverse stock split.
4. WHAT CAN V-ONE SHAREHOLDERS EXPECT IN TERMS OF THE FUTURE VALUATION OF THEIR
SHARES OF STEELCLOUD?
We agreed to be acquired by SteelCloud because its network technology and
product mix, as well as its financial position, represent the best available
technical and marketing support for our application layer SSL VPN products.
We will also be in a far stronger position to protect our intellectual
property and technology patents, which represent a strategic asset in a
high-growth market still in its early stages. The bottom line is that as a
part of SteelCloud, we will be positioned to pursue market opportunities that
we were unable to pursue alone. While we cannot predict the future valuation
of SteelCloud shares, we have confidence that SteelCloud's award-winning
technology and products, combined with our patented standards-based
application layer SSL VPN capability, will create a leading provider of
network security solutions.
5. WILL V-ONE AND STEELCLOUD BE RELEASING ADDITIONAL INFORMATION ABOUT THE
ACQUISITION?
Yes. Once the acquisition agreement is finalized, the companies will describe
further details of the transaction. Also, the companies expect to hold a
conference call to discuss the vision for the new company. Shareholders will
be invited to participate and ask questions of management relating to the
acquisition.
6. ASSUMING THE ACQUISITION AGREEMENT IS FINALIZED, WHEN WILL THE ACQUISITION
ACTUALLY BECOME EFFECTIVE?
After the receipt of all necessary shareholder, third-party and regulatory
approvals, which we anticipate is likely to take several months.
FOR FURTHER INFORMATION, PLEASE CONTACT:
INVESTOR RELATIONS MEDIA
Jimmy Caplan Rick Eisenberg
Eisenberg Communications Eisenberg Communications
(805) 687-8885 (212) 496-6828
FORWARD-LOOKING STATEMENTS
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This document may contain statements, estimates or projections that constitute
"forward-looking" statements as defined under U.S. federal securities laws.
Generally the words "believe," "expect," "intend," "estimate," "anticipate,"
"project," "will" and similar expressions identify forward-looking statements,
which generally are not historical in nature. By their nature, forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from our historical experience and our present
expectations or projections. A list and description of some of the risks and
uncertainties can be found in our reports filed with the Securities and Exchange
Commission from time to time, including our annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K. You should not
place undue reliance on forward-looking statements, which speak only as of the
date they are made. Except to the extent otherwise required by federal
securities laws, we do not undertake to publicly update or revise any
forward-looking statements.