UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PATRON SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
74-3055158
(I.R.S. Employer Identification No.)
311 Belle Foret Drive, Suite 150
Lake Bluff, Illinois 60044
(Address of Principal Executive Offices and Zip Code)
Consulting Agreement with M. Rashid Qajar
Consulting Agreement with Security Management Partners, Inc.
(Full Title of the Plan)
Patrick J. Allin, CEO
311 Belle Foret Drive, Suite 150
Lake Bluff, Illinois 60044
(Name and Address of Agent for Service)
(847) 295-7338
(Telephone Number, including Area Code, of Agent for Service)
Copies of all Communications, Including all Communications Sent to the Agent for
Service, Should be Sent to:
Linda J. Wight
Katten Muchin Zavis Rosenman
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661
Telephone: 312-902-5200
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EXPLANATORY NOTE
We prepared this Registration Statement in accordance with the requirements of
Form S-8 under the Securities Act of 1933, as amended, to register 2,250,000
shares of our common stock, $.01 par value per share, issued pursuant to
consulting agreements entered into between our company and our consultants in
satisfaction of compensation owed. This compensation obligation arises as a
result of services provided to our Company by these consultants. These services,
which will be performed for a period of two years from March 31, 2003, will
enable our Company to use one of our consultants for general business matters
including, but not limited to, development of an international business
strategy, the evaluation and analysis of management needs and identifying and
introducing the Company to prospective merger, asset, business or other
acquisition candidates. Our other consultant will seek and identify potential
candidates in the enterprise security and technology fields for acquisition by
the Company.
Under cover of this Form S-8 is our reoffer prospectus prepared in accordance
with Instruction C of Form S-8, which may be used for reofferings and resales on
a continuous or delayed basis in the future of up to an aggregate of 2,250,000
shares of common stock which have been issued, pursuant to the consulting
agreements between our company and the consultants.
This Amendment No. 1 on Form S-8 is being filed to amend the description of the
consulting services provided and to properly identify the selling stockholders.
The selling stockholders are M. Rashid Qajar and Paul Harary, the sole
stockholder of Security Management Partners, Inc.
REOFFER PROSPECTUS
The date of this prospectus is April 7, 2003
Patron Systems, Inc.
311 Belle Foret Drive, Suite 150
Lake Bluff, Illinois 60044
2,250,000 Shares of Common Stock
This reoffer prospectus relates to 2,250,000 shares of our common stock that may
be offered and resold from time to time by the selling stockholders identified
in this prospectus for their own account. It is anticipated that the selling
stockholders will offer shares for sale at prevailing prices on the OTC Bulletin
Board on the date of sale. We will receive no part of the proceeds from sales
made under this reoffer prospectus. The selling stockholders will bear all sales
commissions and similar expenses. Any other expenses incurred by us in
connection with the registration and offering and not borne by the selling
stockholders will be borne by us. The selling stockholders and any brokers
executing selling orders on their behalf may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended, in which event
commissions received by such brokers may be deemed to be underwriting
commissions under the Securities Act of 1933, as amended.
Our common stock is traded on the OTC Bulletin Board under the symbol "PTRS." On
April 1, 2003, the last reported sale price of our common stock on such market
was $3.25 per share. THE SHARES COMMON STOCK OFFERED PURSUANT TO THIS
REGISTRATION STATEMENT INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE
4 OF THIS REOFFER PROSPECTUS. THESE ARE SPECULATIVE SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
TABLE OF CONTENTS
Page
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REOFFER PROSPECTUS................................................................................................1
Available Information.............................................................................................1
Incorporation of Documents by Reference...........................................................................1
BUSINESS OF OUR COMPANY...........................................................................................2
RISK FACTORS......................................................................................................4
CONSULTING AGREEMENTS............................................................................................11
USE OF PROCEEDS..................................................................................................11
SELLING STOCKHOLDERS.............................................................................................12
PLAN OF DISTRIBUTION.............................................................................................13
EXPERTS 13
LEGAL MATTERS....................................................................................................13
REOFFER PROSPECTUS
Available Information
You should only rely on the information incorporated by reference or provided in
this reoffer prospectus or any supplement. We have not authorized anyone else to
provide you with different information. The common stock is not being offered in
any state where the offer is not permitted. You should not assume that the
information in this reoffer prospectus or any supplement is accurate as of any
date other than the date on the front of this reoffer prospectus.
Patron Systems, Inc. (formerly known as Patron Holdings, Inc.) files annual,
quarterly and special reports, proxy statements, and other information with the
Securities and Exchange Commission (the "SEC") as is required by the Securities
Exchange Act of 1934. You may read and copy any reports, statements or other
information we have filed at the SEC's Public Reference Room at 450 Fifth Street
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Rooms. In addition, copies may be obtained
(at prescribed rates) at the SEC's Regional offices at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 75 Park
Place, Room 1228, New York, New York 10007. Our filings are also available on
the Internet on the SEC's website at www.sec.gov, and from commercial document
retrieval services, such as Primark, whose telephone number is 1-800-777-3272.
Incorporation of Documents by Reference
The SEC allows us to "incorporate by reference" information into this
registration statement, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this registration
statement, except for any information superseded by information in this
registration statement.
The following documents filed by our company with the SEC are incorporated
herein by reference:
1. The description of our company's common stock contained in our
Registration Statement on Form 10-SB (SEC file number 000-25675), filed
with the Securities and Exchange Commission on March 31, 1999,
including all amendments and reports for the purpose of updating such
description;
2. Our Annual Report on Form 10-KSB, filed on March 31, 2003;
3. Our Current Report on Form 8-K, filed on April 2, 2003; and
4. All reports and other documents subsequently filed by us pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of
such reports and documents.
Any statement contained in a document incorporated by reference in this
registration statement shall be deemed to be modified or superseded for purposes
of this registration statement to the extent that a statement contained in this
reoffer prospectus or in any subsequently filed document that is also
incorporated by reference in this reoffer prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this registration
statement.
WE WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS REOFFER
PROSPECTUS IS DELIVERED, UPON ORAL OR WRITTEN REQUEST, A COPY OF ANY OR ALL
DOCUMENTS INCORPORATED BY REFERENCE INTO THIS REOFFER PROSPECTUS (EXCLUDING
EXHIBITS, UNLESS THE EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO
THE INFORMATION THE REOFFER PROSPECTUS INCORPORATES). REQUESTS SHOULD BE
DIRECTED TO THE CHIEF EXECUTIVE OFFICER, PATRON SYSTEMS, INC., 311 BELLE FORET
DRIVE, SUITE 150, LAKE BLUFF, ILLINOIS 60044. OUR TELEPHONE NUMBER IS (847)
295-7338.
BUSINESS OF OUR COMPANY
Patron Systems, Inc. is currently a developmental stage company that is
a successor entity to Combined Professional Services, Inc., a Nevada corporation
originally formed in October 1995 (CPS), which later changed its name to Patron
Holdings, Inc. (Holdings). Holdings (as CPS) was originally formed to provide
corporate services to other business entities, but abandoned that business plan
shortly after formation. Holdings, therefore, has never had business operations
or revenue. Holdings (as CPS) began filing reports under the Exchange Act on
March 31, 1999, at which time it stated its intention to seek out, merge with or
acquire a business entity.
Patron Systems, Inc., a Delaware corporation (Systems) was formed in
April 2002 by a group of business leaders to provide comprehensive, end-to-end
information security solutions to global corporations and government
institutions. Systems' initial business plan contemplated that Systems would
grow in part through acquisitions and, in furtherance of such plan, Systems
entered into letters of intent for the acquisitions of TrustWave Corporation and
Entelagent, Inc. In order to raise the necessary financing to complete these
acquisitions, Systems' founders intended initially to raise capital on a private
equity basis and thereafter to pursue an initial public offering of the
surviving company's common stock. Due to a difficult market environment for
initial public offerings of developmental stage companies, Systems determined
that there was a need for it to pursue a transaction with an existing public
company, which would have publicly-traded shares that Systems could use in
acquisition transactions, and to induce and attract a qualified management team.
Systems identified CPS during this process and determined that CPS was
well-suited for such transaction with Systems because its public company status
and lack of operational history afforded Systems an open platform from which to
grow, without the risk of depending on a successful initial public offering in
the future or the necessity of divesting existing operations or incurring
liabilities as a result of existing operations.
On October 11, 2002, Holdings (as CPS), Systems and the stockholders of
Systems consummated a share exchange (Share Exchange) pursuant to an Amended and
Restated Share Exchange Agreement, whereby Holdings (as CPS) issued to each
Systems stockholder, on a one-
2
for-one basis and in exchange for all of the outstanding shares of Systems
capital stock, an aggregate of 25,400,000 shares of Holdings (as CPS) common
stock. Upon the closing of the Share Exchange, the Systems stockholders held
approximately 85% of the outstanding capital stock of Holdings (as CPS), and
Systems became a wholly owned subsidiary of Holdings (as CPS). On November 22,
2002, CPS announced that it changed its name to Patron Holdings, Inc. and that
it would trade on the OTC Bulletin Board under the symbol "PAHG".
On March 27, 2003, Holdings merged with and into Systems, for the
purpose of changing its state of incorporation from Nevada to Delaware
(Redomestication Merger). Systems was the surviving corporation of the
Redomestication Merger, and its Second Amended and Restated Certificate of
Incorporation, Amended and Restated Bylaws and Board of Directors became the
governing documents and governing body, respectively, of the surviving
corporation. The surviving corporation is referred to herein as "we", "us", the
"Company" or "Patron". In connection with the Redomestication Merger, Patron
filed with the SEC a successor entity report on Form 8K-12g-3, whereby Patron
succeeded to the reporting obligations of Holdings under the Exchange Act and
the OTC Bulletin Board trading symbol was changed to "PTRS."
Patron Systems has no material assets or business operations. Systems'
principal activities since its formation in April 2002 consisted of the
development of its business plan, capital raising and evaluation and negotiation
of potential acquisitions. Patron, post-Redomestication Merger, intends to
implement Systems' plans, through acquisitions and internal growth, to offer
trusted security services and next generation integrated security products.
Patron intends to work with organizations to ensure that global enterprises
implement information security policies, procedures and products that result in
"trusted" information environments. Patron expects to offer information security
and vulnerability assessments, certification programs, remediation,
implementation, training, monitoring and management services.
Patron is currently a development stage company that only has five
employees and exists essentially as a publicly held shell company. Patron has
developed a business plan, has been engaged in various capital raising
activities, has signed two definitive acquisition agreements with TrustWave
Corp. and Entelagent Software Corp. and has employed a senior management team.
Even if Patron can complete one or more financing transactions, there can be no
assurance that the Company will be successful in carrying out its business plan
and become profitable. Patron's ability to complete these acquisitions is
dependent upon Patron's success in raising capital in amounts adequate to fund
the required payments at closing under the acquisition agreements and to fund
certain working capital requirements. Current market conditions have made it
increasingly difficult for development stage companies, such as Patron, to raise
capital. To date, Patron has engaged in discussions with various potential
investors and is in active negotiations with certain of these potential
investors. Unless such negotiations result in the timely completion of financing
transactions, Patron is unlikely to be able to complete its planned
acquisitions. The failure to complete these transactions will materially
adversely affect Patron's ability to carry out its business plan and could
jeopardize Patron's ability to continue its corporate existence.
3
FORWARD-LOOKING STATEMENTS
This resale prospectus contains forward-looking statements and
information relating to the Registrant, its industry and planned business
operations as well as other information security businesses that involve risks
and uncertainties. The statements contained in this report that are not
historical statements of fact are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 (Securities Act) and Section 21E of
the Securities Exchange Act of 1934, as amended (Exchange Act).
Forward-looking-statements include, among other things, statements regarding our
expectations, beliefs, intentions or strategies regarding the future. All
forward-looking statements included in this report are based on information
available to us up to and including the date of this document, and we expressly
disclaim any obligation to update or alter our forward-looking statements,
whether as a result of new information, future events or otherwise. Our actual
results could differ significantly from those anticipated in these
forward-looking statements as a result of certain factors, including those set
forth below, under "Risk Factors" and elsewhere in our reports filed under the
Exchange Act.
RISK FACTORS
LACK OF PROFITABILITY; LIMITED FINANCIAL RESOURCES.
We currently have limited financial resources. Our lack of financial
resources resulted in our independent auditors qualifying their report on our
financials statements with a "going concern" reservation. Unless we are
successful in raising capital we may not be able to continue our corporate
existence or pursue our business plan. We have never been profitable, and there
can be no guarantee of profitability in the future.
LACK OF BUSINESS OPERATIONS.
Patron is currently a development stage company which, to date, has not
conducted business operations. If we are unsuccessful in obtaining financing for
the TrustWave and Entelagent Mergers, it is unlikely that the Mergers will be
completed and that we will be able to pursue our business plan or commence our
business operations.
OUR LIMITED HISTORY MAKES IT DIFFICULT TO EVALUATE OUR BUSINESS AND PROSPECTS.
Holdings (as CPS) was incorporated in Nevada in 1995 and Systems was
incorporated in Delaware in 2002. We have not had any business operations since
inception. As a result of our limited history, it may be difficult to plan
operating expenses or forecast our revenues accurately. Our assumptions about
customer or network requirements may be wrong. The revenue and income potential
of these products is unproven, and the markets addressed by these products are
volatile. If such products are not successful, our actual operating results
could be below our expectations and the expectations of investors and market
analysts, which would likely cause the price of our common stock to decline.
4
LACK OF MARKET FOR PRODUCTS.
Prior to our proposed acquisition of TrustWave, we do not have any
current products or revenues. We intend to acquire products through the
acquisition of existing businesses. There is no guarantee, however, that a
market will develop for Internet security solutions of the type we intend to
offer. We cannot predict the size of the market for Internet security solutions,
the rate at which the market will grow, or whether our target customers will
accept our acquired products.
THE PRICE OF OUR COMMON STOCK IS LIKELY TO BE VOLATILE.
The market prices of the securities of technology-related companies
have historically been volatile and may continue to be volatile. Thus, the
market price of our common stock is likely to be subject to wide fluctuations.
If our revenues do not grow or grow more slowly than we anticipate, if operating
or capital expenditures exceed our expectations and cannot be reduced
appropriately, or if some other event adversely affects us, the market price of
our common stock could decline. Only a small public market currently exists for
our common stock and the number of shares eligible for sale in the public market
is currently very limited, but is expected to increase. Sales of substantial
shares in the future would depress the price of our common stock. In addition,
we currently do not receive any stock market research coverage by any recognized
stock market research or trading firm and our shares are not traded on any
national securities exchange. A larger and more active market for our common
stock may not develop.
Because of our limited operations history and lack of assets and
revenues to date, our common stock is believed to be currently trading on
speculation that we will be successful in implementing our acquisition and
growth strategies. There can be no assurance that such success will be achieved.
The failure to implement our acquisitions and growth strategies would likely
adversely affect the market price of our common stock. In addition, if the
market for technology-related stocks or the stock market in general experiences
a continued or greater loss in investor confidence or otherwise fails, the
market price of our common stock could decline for reasons unrelated to our
business, results of operations and financial condition. The market price of our
common stock also might decline in reaction to events that affect other
companies in our industry even if these events do not directly affect us.
General political or economic conditions, such as an outbreak of war, a
recession or interest rate or currency rate fluctuations, could also cause the
market price of our common stock to decline. Our common stock has experienced,
and is likely to continue to experience, these fluctuations in price, regardless
of our performance.
THE CONCENTRATION OF OUR CAPITAL STOCK OWNERSHIP WITH INSIDERS IS LIKELY TO
LIMIT THE ABILITY OF OTHER STOCKHOLDERS TO INFLUENCE CORPORATE MATTERS.
The executive officers, directors and entities affiliated with any of
them together beneficially own approximately 85.96% of our outstanding common
stock. As a result, these stockholders may be able to exercise control over
matters requiring approval by our stockholders, including the election of
directors and approval of significant corporate transactions. This concentration
of ownership might also have the effect of delaying or preventing a change in
our control that might be viewed as beneficial by other stockholders.
5
FUTURE SALES OF SHARES BY EXISTING STOCKHOLDERS COULD CAUSE OUR STOCK PRICE TO
DECLINE.
If our existing or future stockholders sell, or are perceived to sell,
substantial amounts of our common stock in the public market, the market price
of our common stock could decline. As of March 27, 2003, there are approximately
33,513,888 shares of common stock outstanding (which number does not include the
14,592,760 shares of common stock pledged to Mercatus that have been requested
to be returned and cancelled), of which all but 4,704,000 shares will be held by
directors, executive officers and other affiliates, the sale of which are
subject to volume limitations under Rule 144, various vesting agreements and our
quarterly and other "blackout" periods. Shares subject to outstanding options
and warrants and shares reserved for future issuance under our stock option plan
will become eligible for sale in the public market to the extent permitted by
the provisions of various vesting agreements, the lock-up agreements and Rule
144 under the Securities Act. In addition, the selling stockholders are expected
to sell up to 2,250,000 shares pursuant to this reoffer prospectus.
WE MAY BE UNABLE TO SUCCESSFULLY INTEGRATE.
Our business plan is dependent upon the acquisition and integration of
companies that have previously operated independently. The process of
integrating could cause an interruption of, or loss of momentum in, the
activities of our business and the loss of key personnel. The diversion of
management's attention and any delays or difficulties encountered in connection
with our integration of acquired operations could have an adverse effect on our
business, results of operations, financial condition or prospects.
AVAILABILITY OF FUTURE CAPITAL.
To achieve our intended growth, we will require substantial additional
capital. We have encountered difficulty and delays in raising capital to date
and the market environment for development stage companies, like Patron, remains
particularly challenging. There can be no assurance that funds will be available
when needed or on acceptable terms. Technology companies in general have
experienced difficulty in recent years in accessing capital. Inability to obtain
additional financing may require us to delay, scale back or eliminate certain of
our growth plans which could have a material and adverse effect on our business,
financial condition or results of operations or to cease operations. Even if we
are able to obtain additional financing, such financing could be structured as
equity financing that would dilute the ownership percentage of any investor in
our securities.
DOWNTURNS IN THE INTERNET INFRASTRUCTURE, NETWORK SECURITY AND RELATED MARKETS
MAY DECREASE OUR REVENUES AND MARGINS.
The market for products and other products we intend to offer depends
on economic conditions affecting the broader Internet infrastructure, network
security and related markets. Downturns in these markets may cause enterprises
and carriers to delay or cancel security projects, reduce their overall or
security-specific information technology budgets or reduce or cancel orders for
products and other products we intend to offer. In this environment, customers
such as distributors, value-added resellers and carriers may experience
financial difficulty, cease
6
operations and fail to budget or reduce budgets for the purchase of TrustWave's
products or other products we intend to offer. This, in turn, may lead to longer
sales cycles, delays in purchase decisions, payment and collection, and may also
result in price pressures, causing us to realize lower revenues, gross margins
and operating margins. In addition, general economic uncertainty caused by
potential hostilities involving the United States, terrorist activities, the
decline in specific markets such as the service provider market in the United
States, and the general decline in the capital spending in the information
technology sector make it difficult to predict changes in the purchase and
network requirements of our potential customers and the markets we intend to
serve. We believe that, in light of these events, some businesses may curtail or
eliminate capital spending on information technology. A decline in capital
spending in the markets we intend to serve may adversely affect our future
revenues, gross margins and operating margins and make it necessary for us to
gain significant market share from our future competitors in order to achieve
our financial goals and achieve profitability.
COMPETITION MAY DECREASE OUR PROJECTED REVENUES, MARKET SHARE AND MARGINS.
The market for network security products is highly competitive, and we
expect competition to intensify in the future. Competitors may gain market share
and introduce new competitive products for the same markets and customers we
intend to serve with our products. These products may have better performance,
lower prices and broader acceptance than the products we intend to offer.
Many of our potential competitors have longer operating histories,
greater name recognition, large customer bases and significantly greater
financial, technical, sales, marketing and other resources than we will have
even if we are successful in consummating the TrustWave merger. In addition,
some of our potential competitors currently combine their products with other
companies' networking and security products. These potential competitors also
often combine their sales and marketing efforts. Such activities may result in
reduced prices, lower gross and operating margins and longer sales cycles for
the products we intend to offer. If any of our larger potential competitors were
to commit greater technical, sales, marketing and other resources to the markets
we intend to serve, or reduce prices for their products over a sustained period
of time, our ability to successfully sell the products we intend to offer,
increase revenue or meet our or market analysts expectations could be adversely
affected.
FAILURE TO ADDRESS EVOLVING STANDARDS IN THE NETWORK SECURITY INDUSTRY AND
SUCCESSFULLY DEVELOP AND INTRODUCE NEW PRODUCTS OR PRODUCT ENHANCEMENTS WOULD
CAUSE OUR REVENUES TO DECLINE.
The market for network security products is characterized by rapid
technological change, frequent new product introductions, changes in customer
requirements and evolving industry standards. We expect to introduce our
products and enhancements to existing products to address current and evolving
customer requirements and broader networking trends and vulnerabilities. We also
expect to develop products with strategic partners and incorporate third-party
advanced security capabilities into our intended product offerings. Some of
these products and enhancements may require us to develop new hardware
architectures and ASICs that involve complex and time consuming processes. In
developing and introducing our intended product
7
offerings, we have made, and will continue to make, assumptions with respect to
which features, security standards and performance criteria will be required by
our potential customers. If we implement features, security standards and
performance criteria that are different from those required by our potential
customers, market acceptance of our intended product offerings may be
significantly reduced or delayed, which would harm our ability to penetrate
existing or new markets.
Furthermore, we may not be able to develop new products or product
enhancements in a timely manner, or at all. Any failure to develop or introduce
these new products and product enhancements might cause TrustWave's existing
products to be less competitive, may adversely affect our ability to sell
solutions to address large customer deployments and, as a consequence, our
revenues may be adversely affected. In addition, the introduction of products
embodying new technologies could render existing products we intend to offer
obsolete, which would have a direct, adverse effect on our market share and
revenues. Any failure of our future products or product enhancements to achieve
market acceptance could cause our revenues to decline and our operating results
to be below our expectations and the expectations of investors and market
analysts, which would likely cause the price of our common stock to decline.
THE UNPREDICTABILITY OF AN ACQUIRED COMPANY'S QUARTERLY RESULTS MAY CAUSE THE
TRADING PRICE OF OUR COMMON STOCK TO DECLINE.
An acquired company's quarterly revenues and operating results have
varied in the past and will likely continue to vary in the future due to a
number of factors, many of which are outside of our control. Any of these
factors could cause the price of our common stock to decline. The primary
factors that may affect future revenues and future operating results include the
following:
[ ] the demand for intended current product offerings and our
future products;
[ ] the length of sales cycles;
[ ] the timing of recognizing revenues;
[ ] new product introductions by us or our competitors;
[ ] changes in our pricing policies or the pricing policies of our
competitors;
[ ] variations in sales channels, product costs or mix of products
sold;
[ ] our ability to develop, introduce and ship in a timely manner
new products and product enhancements that meet customer
requirements;
[ ] our ability to obtain sufficient supplies of sole or limited
source components, including ASICs, and power supplies, for
our products;
[ ] variations in the prices of the components we purchase;
[ ] our ability to attain and maintain production volumes and
quality levels for our products at reasonable prices at our
third-party manufacturers;
[ ] our ability to manage our customer base and credit risk and
to collect our accounts receivable; and
[ ] the financial strength of our value-added resellers and
distributors.
Our operating expenses are largely based on anticipated revenues and a
high percentage of our expenses are, and will continue to be, fixed in the short
term. As a result, lower than
8
anticipated revenues for any reason could cause significant variations in our
operating results from quarter to quarter and, because of our rapidly growing
operating expenses, could result in substantial operating losses. In this event,
the price of our common stock would likely decline.
WE MAY EXPERIENCE ISSUES WITH OUR FINANCIAL SYSTEMS, CONTROLS AND OPERATIONS
THAT COULD HARM OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our ability to sell our intended product offerings and implement our
business plan successfully in a volatile and growing market requires effective
management and financial systems and a system of financial processes and
controls. We have limited management resources today and are still establishing
our management and financial systems. Growth, to the extent it occurs, is likely
to place a considerable strain on our management resources, systems, processes
and controls. To address these issues, we will need to continue to improve our
financial and managerial controls, reporting systems and procedures, and will
need to continue to expand, train and manage our work force worldwide. If we are
unable to maintain an adequate level of financial processes and controls, we may
not be able to accurately report our financial performance on a timely basis and
our business and stock price would be harmed.
IF OUR FUTURE PRODUCTS DO NOT INTEROPERATE WITH OUR END CUSTOMERS' NETWORKS,
INSTALLATIONS WOULD BE DELAYED OR CANCELLED, WHICH COULD SIGNIFICANTLY REDUCE
OUR ANTICIPATED REVENUES.
Future products will be designed to interface with its end customers'
existing networks, each of which have different specifications and utilize
multiple protocol standards. Many end customers' networks contain multiple
generations of products that have been added over time as these networks have
grown and evolved. Or future products must interoperate with all of the products
within these networks as well as with future products that might be added to
these networks in order to meet end customers' requirements. If we find errors
in the existing software used in our end customers' networks, we may elect to
modify our software to fix or overcome these errors so that our products will
interoperate and scale with their existing software and hardware. If our future
products do not interoperate with those within our end customers' networks,
installations could be delayed or orders for our products could be cancelled,
which could significantly reduce our anticipated revenues.
WE WILL DEPEND ON OUR KEY PERSONNEL TO MANAGE OUR BUSINESS EFFECTIVELY IN A
RAPIDLY CHANGING MARKET, AND IF WE ARE UNABLE TO HIRE ADDITIONAL PERSONNEL OR
RETAIN EXISTING PERSONNEL, OUR ABILITY TO EXECUTE OUR BUSINESS STRATEGY WOULD BE
IMPAIRED.
We currently have only five employees. Our future success depends upon
the continued services of our executive officers, including in particular
Patrick J. Allin, Richard L. Linting, Brett Newbold and Marie Meisenbach Graul.
The loss of the services of any of our key employees, the inability to attract
or retain qualified personnel in the future, or delays in hiring required
personnel, could delay the development and introduction of, and negatively
impact our ability to sell, our intended product offerings.
WE MIGHT HAVE TO DEFEND LAWSUITS OR PAY DAMAGES IN CONNECTION WITH ANY ALLEGED
OR ACTUAL FAILURE OF OUR PRODUCTS AND SERVICES.
9
Because our intended product offerings and services provide and monitor
network security and may protect valuable information, we could face claims for
product liability, tort or breach of warranty. Anyone who circumvents our
security measures could misappropriate the confidential information or other
property of end customers using our products, or interrupt their operations. If
that happens, affected end customers or others may sue us. Defending a lawsuit,
regardless of its merit, could be costly and could divert management attention.
Our business liability insurance coverage may be inadequate or future coverage
may be unavailable on acceptable terms or at all.
WE COULD BECOME SUBJECT TO LITIGATION REGARDING INTELLECTUAL PROPERTY RIGHTS
THAT COULD BE COSTLY AND RESULT IN THE LOSS OF SIGNIFICANT RIGHTS.
In recent years, there has been significant litigation in the United
States involving patents and other intellectual property rights. We may become a
party to litigation in the future to protect our intellectual property or as a
result of an alleged infringement of another party's intellectual property.
Claims for alleged infringement and any resulting lawsuit, if successful, could
subject us to significant liability for damages and invalidation of our
proprietary rights. These lawsuits, regardless of their success, would likely be
time-consuming and expensive to resolve and would divert management time and
attention. Any potential intellectual property litigation could also force us to
do one or more of the following:
[ ] stop or delay selling, incorporating or using products that
use the challenged intellectual property;
[ ] obtain from the owner of the infringed intellectual property
right a license to sell or use the relevant technology, which
license might not be available on reasonable terms or at all;
or
[ ] redesign the products that use that technology.
If we are forced to take any of these actions, our business might be
seriously harmed. Our insurance may not cover potential claims of this type or
may not be adequate to indemnify us for all liability that could be imposed.
THE INABILITY TO OBTAIN ANY THIRD-PARTY LICENSE REQUIRED TO DEVELOP NEW PRODUCTS
AND PRODUCT ENHANCEMENTS COULD REQUIRE US TO OBTAIN SUBSTITUTE TECHNOLOGY OF
LOWER QUALITY OR PERFORMANCE STANDARDS OR AT GREATER COST, WHICH COULD SERIOUSLY
HARM OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
From time to time, we may be required to license technology from third
parties to develop new products or product enhancements. Third-party licenses
may not be available to us on commercially reasonable terms or at all. The
inability to obtain any third-party license required to develop new products or
product enhancements could require us to obtain substitute technology of lower
quality or performance standards or at greater cost, which could seriously harm
our business, financial condition and results of operations.
10
GOVERNMENTAL REGULATIONS AFFECTING THE IMPORT OR EXPORT OF PRODUCTS COULD
NEGATIVELY AFFECT OUR REVENUES.
Governmental regulation of imports or exports or failure to obtain
required export approval of our encryption technologies could harm our
international and domestic sales. The United States and various foreign
governments have imposed controls, export license requirements and restrictions
on the import or export of some technologies, especially encryption technology.
In addition, from time to time, governmental agencies have proposed additional
regulation of encryption technology, such as requiring the escrow and
governmental recovery of private encryption keys.
In particular, in light of recent terrorist activity, governments could
enact additional regulation or restrictions on the use, import or export of
encryption technology. Additional regulation of encryption technology could
delay or prevent the acceptance and use of encryption products and public
networks for secure communications. This might decrease demand for our intended
product offerings and services. In addition, some foreign competitors are
subject to less stringent controls on exporting their encryption technologies.
As a result, they may be able to compete more effectively than we can in the
domestic and international network security market.
MANAGEMENT COULD INVEST OR SPEND OUR CASH OR CASH EQUIVALENTS AND INVESTMENTS IN
WAYS THAT MIGHT NOT ENHANCE OUR RESULTS OF OPERATIONS OR MARKET SHARE.
We have made no specific allocations of our cash or cash equivalents
and investments. Consequently, management will retain a significant amount of
discretion over the application of our cash or cash equivalents and investments
and could spend the proceeds in ways that do not improve our operating results
or increase our market share. In addition, these proceeds may not be invested to
yield a favorable rate of return.
CONSULTING AGREEMENTS
On March 31, 2003, the Company entered into consulting agreements with each M.
Rashid Qajar and Security Management Partners. The term of each agreement is two
years. The consulting services to be provided by Mr. Qajar shall be to advise
and consult with the Company regarding general business matters including, but
not limited to, development of an international business strategy, the
evaluation and analysis of management needs and identifying and introducing the
Company to prospective merger, asset, business or other acquisition candidates.
The consulting services to be provided by Security Management Partners, Inc.
include to seek and identify potential candidates in the enterprise security
service and technology field for acquisition by the Company. For and as
consideration for the services provided pursuant to the consulting agreements,
the Company has agreed to pay Mr. Qajar 2,050,000 shares of common stock of the
Company and Security Management Partners 200,000 shares of common stock of the
Company and the Company has agreed to register the common stock on this Form
S-8.
11
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of any of the 2,250,000
shares of common stock by M. Rashid Qajar and Paul Harary, the selling
stockholders.
SELLING STOCKHOLDERS
The following table identifies the selling stockholders, the number of shares
held by each selling stockholder, the amount to be offered for each selling
stockholder's account, and the number of shares and percentage of outstanding
shares of common stock to be owned by each selling stockholder after the sale of
the shares offered by each of them pursuant to this offering, assuming that each
selling stockholder sells all of the shares offered in this reoffer prospectus.
Mr. Qajar has agreed to hold 1,500,000 shares of the common stock beneficially
owned by him until March 31, 2004.
Percentage of Shares Beneficially
Number of Shares Owned/(2)/
Beneficially Shares Being --------------------------------------
Selling Stockholder Owned/(1)/ Registered Before Offering After Offering
------------------- ---------------- ------------ --------------- ---------------
M. Rashid Qajar 2,050,000 2,050,000 0.06% 0%
Paul Harary(3) 200,000 200,000 0.01% 0%
----------
/(1)/ Mr. Qajar and Paul Harary do not hold any options to purchase our common
stock.
/(2)/ Based on 33,513,888 shares outstanding as of March 27, 2003.
/(3)/ Mr. Harary is the sole stockholder of Security Management Systems, Inc.
THE INFORMATION PROVIDED IN THE TABLE ABOVE WITH RESPECT TO THE SELLING
STOCKHOLDERS HAS BEEN OBTAINED FROM THE SELLING STOCKHOLDERS. BECAUSE THE
SELLING STOCKHOLDERS MAY SELL ALL OR SOME PORTION OF THE SHARES OF COMMON STOCK
BENEFICIALLY OWNED BY EACH OF THEM, ONLY AN ESTIMATE (ASSUMING THE SELLING
STOCKHOLDERS SELLS ALL OF THE SHARES OFFERED HEREBY) CAN BE GIVEN AS TO THE
NUMBER OF SHARES OF COMMON STOCK THAT WILL BE BENEFICIALLY OWNED BY THE SELLING
STOCKHOLDERS AFTER THIS OFFERING. IN ADDITION, THE SELLING STOCKHOLDERS MAY HAVE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF, OR MAY SELL, TRANSFER OR OTHERWISE
DISPOSE OF, AT ANY TIME OR FROM TIME TO TIME SINCE THE DATE ON WHICH THEY
PROVIDED THE INFORMATION REGARDING THE SHARES OF COMMON STOCK BENEFICIALLY OWNED
BY EACH OF THEM, ALL OR A PORTION OF THE SHARES OF COMMON STOCK BENEFICIALLY
OWNED BY EACH OF THEM IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT OF 1933, AS AMENDED.
12
Under the Securities Exchange Act of 1934, any person engaged in a distribution
of the shares offered by this reoffer prospectus may not simultaneously engage
in market making activities with respect to our common stock during the
applicable "cooling off" periods prior to the commencement of such distribution.
In addition, and without limiting the foregoing, the selling stockholders will
be subject to applicable provisions of the Securities Exchange Act of 1934 and
the rules and regulations thereunder, which provisions may limit the timing of
purchases and sales of the shares by the selling stockholders.
PLAN OF DISTRIBUTION
The selling stockholders may sell the 2,250,000 shares common stock for value
from time to time under this reoffer prospectus in one or more transactions on
the OTC Bulletin Board, in negotiated transactions or in a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at prices otherwise negotiated. Each
selling stockholder may effect such transactions by selling the shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the respective
selling stockholders and/or the purchasers of the shares for whom such
broker-dealers may act as agent (which compensation may be less than or in
excess of customary commissions).
The selling stockholders and any broker-dealers that participate in the
distribution of the shares may be deemed to be an "underwriter" within the
meaning of Section 2(11) of the Securities Act of 1933, and any commissions
received by them and any profit on the resale of the shares sold by them may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933. All selling and other expenses incurred by the selling stockholders will
be borne by such selling stockholders. In addition to any shares sold hereunder,
the selling stockholders may, at the same time, sell any shares of common stock,
including the shares, owned by each of them in compliance with all of the
requirements of Rule 144, regardless of whether such shares are covered by this
reoffer prospectus. There is no assurance that the selling stockholders will
sell all or any portion of the shares offered. We will pay all expenses in
connection with this offering and we will not receive any proceeds from sales of
any shares by the selling stockholders.
EXPERTS
The financial statements as of December 31, 2002 filed on Form 10-KSB on March
31, 2003 are incorporated by reference in this reoffer prospectus in reliance on
the report of Grant Thornton LLP, independent accountants, which is also
incorporated herein by reference, in reliance upon their authority as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the shares of common stock offered by this reoffer prospectus
will be passed upon for us and the selling stockholders by Katten Muchin Zavis
Rosenman.
13
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Securities and Exchange Commission (the "SEC") allows us to "incorporate by
reference" information into this registration statement, which means that we can
disclose important information to you by referring you to another document filed
separately with the Securities and Exchange Commission. The information
incorporated by reference is deemed to be part of this registration statement,
except for any information superseded by information in this registration
statement.
The following documents filed by our company with the SEC are incorporated
herein by reference:
1. The description of our company's common stock contained in our
Registration Statement on Form 10-SB (SEC file number 000-25675), filed
with the Securities and Exchange Commission on march 31, 1999,
including all amendments and reports for the purpose of updating such
description;
2. Our Annual Report on Form 10-KSB, filed on March 31, 2003;
3. Our Current Report on Form 8-K filed on April 2, 2003; and
4. All reports and other documents subsequently filed by us pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934, as amended prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents.
Any statement contained in a document incorporated by reference in this
registration statement shall be deemed to be modified or superseded for purposes
of this registration statement to the extent that a statement contained in this
reoffer prospectus or in any subsequently filed document that is also
incorporated by reference in this reoffer prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this registration
statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Section 78.7502 of Nevada Revised Statutes provides as follows with respect to
indemnification of directors and officers:
NRS 78.7502 Discretionary and mandatory indemnification of officers, directors,
employees and agents: General provisions.
14
A corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, except an
action by or in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
A corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
To the extent that a director, officer, employee or agent of a corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections 1 and 2, or in defense of any claim, issue
or matter therein, the corporation shall indemnify him against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense.
When indemnification is discretionary, Section 78.751 of Nevada Revised Statutes
provides as follows with respect to the authorization required to carry out the
indemnification:
NRS 78.751 Authorization required for discretionary indemnification; advancement
of expenses; limitation on indemnification and advancement of expenses.
Any discretionary indemnification under NRS 78.7502 unless ordered by a court or
advanced pursuant to subsection 2, may be made by the corporation only as
authorized in the specific case
15
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not parties
to the action, suit or proceeding so orders, by independent legal counsel in a
written opinion; or
(d) If a quorum consisting of directors who were not parties to the action, suit
or proceeding cannot be obtained, by independent legal counsel in a written
opinion.
The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking indemnification
or advancement of expenses may be entitled under the articles of incorporation
or any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, for either an action in his official capacity or an action in another
capacity while holding his office, except that indemnification, unless ordered
by a court pursuant to NRS 78.7502 or for the advancement of expenses made
pursuant to subsection 2, may not be made to or on behalf of any director or
officer if a final adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was material
to the cause of action.
(b) Continues for a person who has ceased to be a director, officer, employee or
agent and inures to the benefit of the heirs, executors and administrators of
such a person.
Our Bylaws provide that we must indemnify any director or officer of our
corporation to the full extent permitted by applicable law as then in effect,
against liability arising out of a proceeding to which the individual was made a
party because he or she is or was a director or officer of our corporation. We
will advance expenses incurred by a director or officer who is a party to a
proceeding in advance of final disposition of the proceeding, as provided by our
Bylaws.
Item 7. Exemption from Registration Claimed.
Not Applicable.
16
Item 8. Exhibits.
5.1 Opinion of Katten Muchin Zavis Rosenman
23.1 Consent of Katten Muchin Zavis Rosenman (included in Exhibit 5)
23.2 Consent of Independent Auditor (Grant Thornton LLP)
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low and high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporate by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
17
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1033, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
18
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-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on this 7th day of April,
2003.
PATRON SYSTEMS, INC.
By: /s/ Patrick J. Allin
-----------------------------
Name: Patrick J. Allin
Title: Chief Executive Officer
19
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
date indicated.
/s/ Patrick J. Allin April 7, 2003
------------------------------------------------
Patrick J. Allin
Chief Executive Officer and Director
/s/ Marie Meisenbach Graul* April 7, 2003
------------------------------------------------
Marie Meisenbach Graul
Chief Financial Officer, Secretary and Treasurer
/s/ Richard G. Beggs* April 7, 2003
------------------------------------------------
Richard G. Beggs
Director
/s/ Anthony J. Carbone* April 7, 2003
------------------------------------------------
Anthony J. Carbone
Director
/s/ Warren K.K. Luke* April 7, 2003
------------------------------------------------
Warren K.K. Luke
Director
/s/ Robert E. Yaw II* April 7, 2003
------------------------------------------------
Robert E. Yaw II
Director
By: /s/ Patrick J. Allin
--------------------------------------------
Patrick J. Allin, Attorney-in-fact
20
Exhibit Index
Exhibit Number Exhibit Description
5.1 Opinion of Katten Muchin Zavis Rosenman*
23.1 Consent of Katten Muchin Zavis Rosenman (included in
Exhibit 5)*
23.2 Consent of Independent Auditor (Grant Thornton LLP)*
-------------------------
* Previously filed.
21