As filed with the Securities and Exchange Commission on December 16, 1998
File No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
V-ONE Corporation
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(Exact name of registrant as specified in its charter)
Delaware 52-1953278
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20250 Century Boulevard, Suite 300, Germantown, MD 20874
(301) 515-5200
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(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Charles B. Griffis
Senior Vice President and Chief Financial Officer
V-ONE Corporation
20250 Century Boulevard
Suite 300
Germantown, MD 20874
(301) 515-5243
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Cary J. Meer, Esq.
Richard A. Gashler, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036-1800
Approximate date of commencement of proposed sale to the public: As soon
as practicable 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, 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. / / ___
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, 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
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Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities To Be To Be Price Per Offering Registration
Registered Registered Share(1) Price(1) Fee(1)
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Common Stock, $.001 2,660,000 $2.688 $7,150,080 $1,988.00
par value per share
(2)
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Total 2,660,000 $2.688 $7,150,080 $1,988.00
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(1) Estimated pursuant to Rule 457 for the purpose of calculating the
registration fee only; based upon the average of the high and low sales
prices for the Common Stock of V-ONE Corporation ("Common Stock") on the
Nasdaq National Market on December 14, 1998. Registration fee is
calculated pursuant to Rule 457(c).
(2) Includes 10,000 shares of Common Stock held by Andrew and Bette Vaccaro,
50,000 shares of Common Stock held by Elliott Briody, 50,000 shares of
Common Stock held by Karl F. Fox, 50,000 shares of Common Stock held by
Amy N. Karp, 40,000 shares of Common Stock held by Madison Investment
Partners, L.P., 10,000 shares of Common Stock held by Muray D. Shaewitz
Trust, 200,000 shares of Common Stock held by Lewis M. Scott Trust, 10,000
shares of Common Stock held by William and Dorothy Marbaker, 10,000 shares
of Common Stock held by John H. White, 50,000 shares of Common Stock held
by Robert E. Cleary, 30,000 shares of Common Stock held by CLFS Equities
LLP, 10,000 shares of Common Stock held by Warner Blumenthal, 20,000
shares of Common Stock held by Garo A. Partoyan, 50,000 shares of Common
Stock held by Conrad A. Riemer, 20,000 shares of Common Stock held by Len
and Sandra Coleman, 10,000 shares of Common Stock held by Richard L.
Denton, 10,000 shares of Common Stock held by Richard J. Wright, 10,000
shares of Common Stock held by Thomas and Kathleen Moore, 10,000 shares of
Common Stock held by Kathryn P. Kaplan Trust, 20,000 shares of Common
Stock held by Bryan J. O'Connor, 10,000 shares of Common Stock held by
Byron and Joy Crowe, 50,000 shares of Common Stock held by Stanley Shapiro
Revocable Trust, 50,000 shares of Common Stock held by Atlas Capital
Partners, L.P., 20,000 shares of Common Stock held by Albert McCaffery,
Jr., 400,000 shares of Common Stock held by Cranshire Capital, L.P.,
50,000 shares of Common Stock held by John Galt Fund, L.P., 20,000 shares
of Common Stock held by Louis Lang, 400,000 shares of Common Stock held by
Joseph Lupo Profit Sharing Plan, 10,000 shares of Common Stock held by
John and Susan Rogue, 100,000 shares of Common Stock held by Thomas and
Vicke Horvath, 75,000 shares of Common Stock held by Richard F. Fox,
50,000 shares of Common Stock held by Atlas II, L.P., 50,000 shares of
Common Stock held by William C. Clement Trust, 10,000 shares of Common
Stock held by Reg W. Cordry, 27,000 shares of Common Stock held by Norman
Fine, 15,000 shares of Common Stock held by JAD Management, 10,000 shares
of Common Stock held by William Rivkin Trust, 20,000 shares of Common
Stock held by Jayant and Madhu Desai, 25,000 shares of Common Stock held
by John F. Whittemore, 17,500 shares of Common Stock held by Bryan T.
Vanas, 11,250 shares of Common Stock held by Shapiro Family Trust, 10,000
shares of Common Stock held by Joseph and Rosa Lupo, 22,625 shares of
Common Stock held by Lee and Linda DeVisser, 52,250 shares of Common Stock
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held by Lewis M. Schott, 2,500 shares of Common Stock held by Burnett
Moody, 6,875 shares of Common Stock held by Stanley Shapiro, 200,000
shares of Common Stock held by Advantage Fund II Ltd., 125,000 shares of
Common Stock held by Martin L. Clark and 150,000 shares of Common Stock
held by Professional Trading Services Est.
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.
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PROSPECTUS
SUBJECT TO COMPLETION, DECEMBER 16, 1998
2,660,000 SHARES
V-ONE CORPORATION
COMMON STOCK
The 2,660,000 shares of common stock of V-ONE Corporation, $0.001 par
value per share, offered through this Prospectus will be sold by certain current
shareholders of V-ONE. The shareholders selling shares of common stock pursuant
to this offering are Andrew and Bette Vaccaro, Elliott Broidy, Karl F. Fox, Amy
N. Karp, Madison Investment Partners, L.P., Murray D. Schaewitz Trust, Lewis M.
Schott Trust, Lewis M. Schott, William and Dorothy Marbaker, John H. White,
Robert E. Cleary, CLFS Equities LLP, Warner Blumenthal, Garo A. Partoyan, Conrad
A. Riemer, Len and Sandra Coleman, Richard L. Denton, Richard J. Wright, Thomas
and Kathleen Moore, Kathryn P. Kaplan Trust, Bryan J. O'Connor, Byron and Joy
Crowe, Stanley Shapiro Revocable Trust, Shapiro Family Trust, Stanley Shapiro,
Atlas Capital Partners, L.P., Albert McCaffery, Jr., Cranshire Capital, L.P.,
John Galt Fund, L.P., Louis Lang, Joseph Lupo Profit Sharing Plan, Joseph and
Rosa Lupo, John and Susan Rogue, Thomas and Vicke Horvath, Richard F. Fox, Atlas
II, L.P., William C. Clement Trust, Reg W. Cordry, Norman Fine, JAD Management,
William Rivkin Trust, Jayant and Madhu Desai, John F. Whittemore, Bryan T.
Vanas, Lee and Linda DeVisser, Burnett Moody, Martin Lane Clark, Advantage Fund
II Ltd. and Professional Trading Services Est. The selling shareholders own
their shares directly. In some instances, the shares offered pursuant to this
Prospectus may be sold by the pledgees, donees or transferees of or other
successors in interest to the selling shareholders.
None of the proceeds from this offering will be received by V-ONE. V-ONE
will pay substantially all of the expenses incident to the registration,
offering and sale of the shares other than commissions or discounts of
underwriters, broker-dealers or agents and the expenses of counsel to the
selling shareholders.
The sale of shares offered through this Prospectus may be effected by the
selling shareholders from time to time in transactions on the Nasdaq National
Market, in privately negotiated transactions or in a combination of such methods
of sale. The shares may be sold at fixed prices that may change, at prices
prevailing at the time of sale, at prices relating to such prevailing prices or
at negotiated prices.
V-ONE's common stock is currently listed on the Nasdaq National Market
under the trading symbol "VONE." On December 14, 1998, the last reported sale
price for the common stock of V-ONE on the Nasdaq National Market was $2.688 per
share.
V-ONE's principal executive offices are located at 20250 Century
Boulevard, Suite 300, Germantown, Maryland 20874. V-ONE's telephone number is
(301) 515-5200.
POTENTIAL INVESTORS SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING
ON PAGE 2 OF THIS PROSPECTUS.
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.
______________, 1998
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. THE
SELLING SHAREHOLDERS MAY NOT SELL THEIR SHARES UNTIL THE 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.
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V-ONE
V-ONE develops, markets, and licenses a comprehensive suite of network
security products that enables organizations to conduct secured electronic
transactions and information exchange using private enterprise networks and
public networks, such as the Internet. V-ONE's suite of products address network
user authentication, perimeter security, access control, and data integrity
through the use of smart cards, firewalls, and encryption technology. V-ONE's
products interoperate seamlessly and can be combined to form a complete,
integrated network security solution or can be used as independent components in
customized security solutions. V-ONE's products have been designed with an open
and flexible architecture to allow for enhanced application functionality and to
support future network security standards. In addition, V-ONE's products enable
organizations to deploy and scale their solutions from small, single-site
networks to large, multi-site environments.
V-ONE was incorporated in Maryland in February 1993 and reincorporated in
Delaware in February 1996. Effective July 2, 1996, V-ONE changed its name from
"Virtual Open Network Environment Corporation" to "V-ONE Corporation."
RISK FACTORS
V-ONE operates in a rapidly changing environment that involves numerous
risks, some of which are beyond V-ONE's control. The following discussion
highlights some of the risks V-ONE faces. This Prospectus contains
"forward-looking statements." Such statements involve known and unknown risks
and uncertainties that could cause V-ONE's actual performance or achievements to
differ from any future performance or achievements expressed or implied by such
statements. Readers should carefully consider the following Risk Factors before
purchasing common stock of V-ONE. Readers are also referred to the documents
filed by V-ONE with the SEC, specifically V-ONE's Form 10-K for its most recent
fiscal year, which identifies important risk factors for V-ONE.
LIMITED OPERATING HISTORY; ACCUMULATED DEFICIT
V-ONE was founded in February 1993 and introduced its first product in
December 1994. Accordingly, V-ONE did not generate any significant revenues
until 1995 when it commenced sales of its SmartWall firewall product and
introduced its SmartGate client/server system. Revenues for 1995, 1996 and 1997
were approximately $1,104,000, $6,266,000 and $9,403,000, respectively, and for
the nine months ended September 30, 1998 were approximately $8,305,000.
Net losses for 1995, 1996 and 1997 were approximately $1,122,000,
$6,696,000 and $9,998,000, respectively, and for the nine months ended September
30, 1998 were approximately $3,329,000.
V-ONE's growth in recent periods may not be an accurate indication of
future results of operations in light of V-ONE's short operating history, the
evolving nature of the network security market and the uncertainty of the demand
for Internet and intranet products in general and V-ONE's products in
particular.
As of September 30, 1998, V-ONE had an accumulated deficit of
approximately $21,668,000. V-ONE currently expects to incur additional net
losses over the next several quarters as a result of greater operating expenses
incurred to fund research and development and to increase its sales and
marketing efforts. The Company may need to raise additional capital through
other financing activities in the short term to finance its ongoing operations.
Because of V-ONE's limited operating history, V-ONE may not achieve or
sustain profitability or significant revenues. To address these risks, V-ONE
must, among other things, continue its emphasis on research and development,
successfully execute and implement its marketing strategy, respond to
competitive developments and seek to attract and retain talented personnel.
V-ONE may be unable successfully to address these risks and the failure to do so
could have a material adverse effect on V-ONE's business, financial condition,
results of operations and cash flows.
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DEPENDENCE ON KEY PERSONNEL
V-ONE's success depends, to a large extent, upon the performance of its
senior management and its technical, sales and marketing personnel, many of whom
have only recently joined V-ONE. There is intense competition in the software
security industry to hire and retain qualified personnel. V-ONE is actively
searching for additional qualified personnel. V-ONE's success will depend upon
its ability to retain and hire additional key personnel. The loss of the
services of key personnel or the inability to attract additional qualified
personnel could materially and adversely effect V-ONE's results of operations
and product development efforts.
V-ONE has entered into employment agreements with Jieh-Shan Wang, its
Senior Vice President and Chief Technical Officer, as well as with David D.
Dawson, its Chairman of the Board, President and Chief Executive Officer,
Charles B. Griffis, its Senior Vice President and Chief Financial Officer, and
Robert F. Kelley, its Vice President of Engineering, that provide for fixed
terms of employment. However, V-ONE has not historically provided such types of
employment agreements to its other employees, including its other executive
officers. This may adversely impact V-ONE's ability to attract and retain the
necessary technical, management and other key personnel.
MANAGEMENT OF GROWTH
V-ONE has recently experienced and may continue to experience substantial
growth in the number of its employees and the scope of its operations, resulting
in increased responsibilities for management and added pressure on V-ONE's
operating and financial systems. As of September 30, 1998, V-ONE had 81
employees, as compared to 83, 77, 34 and 7 employees on January 1, 1998, 1997,
1996 and 1995, respectively.
To manage growth effectively, V-ONE needs to continue to improve its
operational, financial and management information systems and to hire, train,
motivate and manage a growing number of employees. Competition is intense for
qualified technical, marketing and management personnel. V-ONE may be unable to
achieve or manage any future growth. Its failure to do so could delay V-ONE's
product development cycles and marketing efforts.
V-ONE is not currently involved in negotiations for any acquisitions.
However, V-ONE may undertake acquisitions in the future. Any such transaction
would place additional strains upon V-ONE's management.
ANTICIPATED FLUCTUATIONS IN QUARTERLY RESULTS
As a result of V-ONE's limited operating history, V-ONE does not have
historical financial data for a significant number of periods on which to base
planned operating expenses. Accordingly, V-ONE's expense levels are based in
part on its expectations as to future revenues.
V-ONE's quarterly sales and operating results generally depend on the
number of orders received within the quarter, and V-ONE's ability to fill these
orders. Forecasts of orders are not always accurate. V-ONE may be unable to
adjust spending in a timely manner to compensate for any unexpected revenue
shortfall. Accordingly, any significant shortfall of demand for V-ONE's products
in relation to V-ONE's expectations could adversely effect V-ONE.
V-ONE expects to experience significant fluctuations in future quarterly
operating results. This may be caused by a number of factors, such as:
. the pricing and mix of products and services sold,
. the introduction of new products by V-ONE and its competitors,
. the timing of orders and the shipment of products,
. market acceptance of V-ONE's products,
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. the ability of V-ONE's direct sales force and resellers to market its
products successfully,
. the mix of distribution channels used, and
. other factors that may be beyond V-ONE's control.
As a result, comparisons of quarterly operating results may not be
meaningful and should not be relied upon as they may not reflect V-ONE's future
performance. It is likely that in some future quarters V-ONE's operating results
will be below the expectations of public market analysts and investors. In such
event, the price of V-ONE's Common Stock would likely be adversely effected.
DEPENDENCE ON THE INTERNET AND INTRANETS
V-ONE's success depends substantially upon the market acceptance of the
Internet and intranets as mediums for commerce and communication. Although V-ONE
believes that its software security products will facilitate commerce and
communication over the Internet and intranets, commerce and communication over
the Internet and intranets may not expand and V-ONE's products may not be
adopted for security purposes.
The Internet also may not prove to be a viable commercial marketplace
because of inadequate development of the necessary infrastructure, such as a
reliable network backbone or timely development of complementary products and
services. If the Internet and intranets do not develop as mediums of commerce
and communication or the Internet does not develop as a viable commercial
marketplace, V-ONE's business, financial condition and results of operations may
be adversely effected.
RISKS ASSOCIATED WITH THE EMERGING NETWORK SECURITY MARKET
The market for V-ONE's products is in an early stage of development. The
rapid development of Internet and intranet computing has increased the ability
of users to access proprietary information and resources and has recently
increased demand for network security products. Because the market for network
security products is only beginning to develop. It is difficult to assess the
size of the market, the product features desired by the market, the best price
structure for V-ONE's products, the best distribution strategy and the
competitive environment that will develop in this market.
The demand for V-ONE's products could decline as a result of competition,
technological change, the public's perception of the need for security products,
developments in the hardware and software environments in which these products
operate, general economic conditions or other factors beyond V-ONE's control.
Any such decline would adversely effect V-ONE.
DEPENDENCE ON PRINCIPAL PRODUCTS; UNCERTAINTY OF PRODUCT ACCEPTANCE
V-ONE currently generates most of its revenues from its SmartWall and
SmartGate products. SmartWall and SmartGate have met with a favorable degree of
market acceptance since sales of SmartWall commenced in the first quarter of
1995 and since SmartGate was introduced in the fourth quarter of 1995. However,
SmartWall or SmartGate may not continue to be accepted in the future. In
addition, any or all of V-ONE's other current or future products could fail to
win market acceptance.
V-ONE's success depends, in part, on V-ONE's ability to design, develop
and introduce new products, services and enhancements on a timely basis to meet
changing customer needs, technological developments and evolving industry
standards.
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INTELLECTUAL PROPERTY RIGHTS; INFRINGEMENT CLAIMS
V-ONE relies on trademark, copyright, patent and trade secret laws,
employee and third-party non-disclosure agreements and other methods to protect
the rights of V-ONE and the companies from which V-ONE licenses technology. In
addition, others may independently develop similar technologies or duplicate any
technology developed by V-ONE.
Prosecution of patent applications and any other patent applications may
require the expenditure of substantial resources. For example, the issuance of a
patent may require 24 months or longer. During this period, V-ONE's technology
may become obsolete. Pending or future patent applications may not be granted,
future patents may be challenged, invalidated or circumvented and the rights
granted may not provide competitive advantages to V-ONE.
V-ONE currently holds patents on its Wallet Technology, its SmartGate
technology, its Smartcard Technology, and its On-Line Registration technology.
V-ONE currently intends to pursue patent protection outside of the United
States for the technology covered by the most recently filed patent
applications. This protection may not be granted. Even if it is granted, it may
not adequately protect the covered technology. V-ONE's success also depends on
its software technology and technology licensed from others. V-ONE's trade
secrets, license agreements and non-disclosure agreements may not provide
appropriate protection for V-ONE's technology or the technology it licenses from
others. Further, V-ONE relies on license agreements that are not signed by the
end user to license V-ONE's products. These license agreements may be
unenforceable under the laws of certain jurisdictions.
Further, V-ONE may be subject to additional risk as V-ONE enters into
transactions in countries where intellectual property laws are not well
developed or are poorly enforced. Legal protections of V-ONE's rights may be
ineffective in foreign markets and technology developed by V-ONE may not be
protectable in foreign jurisdictions.
V-ONE believes that, due to the rapid pace of technological innovation for
network security products, V-ONE's ability to establish and maintain a position
of technology leadership in the industry depends more on the skills of its
development personnel than upon legal protections afforded its existing or
future technology.
As the number of security products in the industry increases and the
functionality of these products overlap, software developers may become subject
to infringement claims. Third parties may in the future assert infringement
claims against V-ONE with respect to current or future products. V-ONE also may
desire or be required to obtain licenses from others. Failure to obtain those
licenses could adversely effect V-ONE's ability to market its software security
products. However, V-ONE may be unable to obtain these licenses on commercially
reasonable terms, if at all. In addition, the patents underlying such licenses
may not be valid or enforceable and the proprietary nature of the unpatented
technology underlying such licenses may not remain proprietary.
Any claims or litigation could be costly and could result in a diversion
of management's attention. Adverse determinations in such claims or litigation
could also adversely effect V-ONE.
RISK OF ERRORS OR FAILURES; PRODUCT LIABILITY RISKS
The complex nature of V-ONE's software products can make the detection of
errors or failures difficult when products are introduced. If errors or failures
are subsequently discovered, this may result in delays and lost revenues during
the correction process. In addition, technology licensed by V-ONE for use in its
products may contain errors that adversely effect such products. Despite testing
by V-ONE and current and prospective customers, errors may still be discovered
in new products or releases after commencement of commercial shipments. This
might result in delay, adverse publicity, loss of market acceptance and claims
against V-ONE.
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A malfunction or the inadequate design of V-ONE's products could result in
tort or warranty claims. V-ONE generally attempts to reduce the risk of such
losses to itself and to the companies from which V-ONE licenses technology
through warranty disclaimers and liability limitation clauses in its license
agreements. V-ONE may not have obtained adequate contractual protection in all
instances or where otherwise required under agreements V-ONE has entered into
with others. In addition, these measures may not be effective in limiting
V-ONE's liability to end users and to the companies from which V-ONE licenses
technology.
V-ONE currently has product liability insurance. However, V-ONE's
insurance coverage may not be adequate and any product liability claim against
V-ONE for damages resulting from security breaches could be substantial. In
addition, a well-publicized actual or perceived security breach could adversely
effect the market's perception of security products in general or V-ONE's
products in particular. This could result in a decline in demand for V-ONE's
products.
CHANGES IN TECHNOLOGY AND INDUSTRY STANDARDS; RISK OF NEW PRODUCT INTRODUCTION
The network security industry is characterized by rapid changes, including
evolving industry standards, frequent new product introductions, continuing
advances in technology and changes in customer requirements and preferences.
Advances in techniques by individuals and entities seeking to gain unauthorized
access to networks could expose V-ONE's existing products to new and unexpected
attacks and require accelerated development of new products or enhancements to
existing products.
V-ONE may be unable to counter challenges to its current products. V-ONE's
future products may not keep pace with technological changes implemented by
competitors or persons seeking to breach network security. Its products may not
satisfy evolving consumer preferences and V-ONE may not be successful in
developing and marketing products for any future technology. Failure to develop
and introduce new products and improve current products in a timely fashion
could adversely effect V-ONE.
RISK OF DEFECTS AND DEVELOPMENT DELAYS
V-ONE may experience schedule overruns in software development triggered
by factors such as insufficient staffing or the unavailability of
development-related software, hardware or technologies. Further, when developing
new software products, V-ONE's development schedules may be altered as a result
of the discovery of software bugs, performance problems or changes to the
product specification in response to customer requirements, market developments
or Company initiated changes.
Changes in product specifications may delay completion of documentation,
packaging or testing. This may, in turn, affect the release schedule of the
product.
When developing complex software products, the technology market may shift
during the development cycle, requiring V-ONE either to enhance or change a
product's specifications to meet a customer's changing needs. All of these
factors may cause a product to enter the market behind schedule, which may
adversely effect market acceptance of the product or place it at a disadvantage
to a competitor's product that has already gained market share or market
acceptance during the delay.
EVOLVING DISTRIBUTION CHANNELS
V-ONE relies on its direct sales force and its channel distribution
strategy for the sale and marketing of its products. V-ONE continues to add to
its internal sales and marketing staff in order to increase sales through its
channel distribution strategy. The cost of such expansion may exceed the
revenues generated, and V-ONE's sales and marketing organization may be unable
to successfully compete against the more extensive and well-funded sales and
marketing operations of certain of its current and future competitors.
V-ONE's distribution strategy involves the development of relationships
with resellers and international distributors to enable V-ONE to achieve broad
market penetration. V-ONE continues to expand its reseller distribution channel.
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However, V-ONE may be unable to continue to attract integrators and resellers
that will be able to market V-ONE's products effectively and that will be
qualified to provide timely and cost-effective customer support and service.
V-ONE ships products to distributors, integrators and resellers on receipt
of a purchase-order, and its distributors, integrators and resellers generally
carry competing product lines. Current distributors, integrators and resellers
may not continue to represent V-ONE's products. The inability to recruit, or the
loss of, important sales personnel, distributors, integrators or resellers could
adversely effect V-ONE.
Due to certain worldwide economic factors, V-ONE may from time to time
experience difficulty in collecting its receivables on a timely basis. If
collection is not probable at the time V-ONE ships its product, as determined by
management, V-ONE defers the revenue. V-ONE continues to focus on the collection
of its receivables on a timely basis. However, if V-ONE is unable to collect its
receivables on a timely basis, it could have an adverse effect on V-ONE's
financial condition, results of operations and cashflows.
INTERNATIONAL SALES
V-ONE has increased its presence in overseas markets by expanding
international distribution relationships for its products, including SmartWall
and SmartGate. V-ONE may not be successful in expanding its relationships with
international distributors or in gaining commercial acceptance of its products
abroad.
As V-ONE expands international sales, currency fluctuations could make its
products less competitive in foreign markets and contribute to fluctuations in
V-ONE's operating results. Political instability, difficulties in staffing and
managing international operations, potential insolvency of international
resellers, longer receivable collection periods and difficulty in collecting
accounts receivable also pose risks to the development of international
marketing efforts. Moreover, the laws of certain countries, or the enforcement
thereof, may not protect V-ONE's products and intellectual property rights to
the same extent as the laws of the United States. These factors may adversely
effect V-ONE.
LONG SALES CYCLE; SEASONALITY
Sales of V-ONE's products generally involve a significant commitment of
capital by its customers. For sales by V-ONE's sales force directly to end
users, V-ONE often permits customers to evaluate products being considered for
license, generally for a period of up to 30 days. For these and other reasons,
the sales cycle associated with V-ONE's products is likely to be lengthy and
subject to a number of significant risks over which V-ONE has little or no
control. As a result, V-ONE believes that its quarterly results are likely to
vary significantly in the future.
V-ONE may be required to ship products shortly after it receives orders.
Consequently, order backlog, if any, at the beginning of any period may
represent only a small portion of that period's expected revenues. As a result,
product revenues in any period will be substantially dependent on orders booked
and shipped in that period.
V-ONE plans its production and inventory levels based on internal
forecasts of customer demand, which is highly unpredictable and can fluctuate
substantially. If revenues fall significantly below anticipated levels, V-ONE's
financial condition, results of operations and cash flows could be adversely
effected. In addition, V-ONE may experience significant seasonality in its
business, and V-ONE's financial condition and results of operations may be
effected by such trends in the future. Such trends may include higher revenues
in the third and fourth quarters of the year and lower revenues in the first and
second quarters. V-ONE believes that revenues may tend to be higher in the third
quarter due to the fiscal year end of the U.S. government and higher in the
fourth quarter due to year-end budgetary pressures on V-ONE's commercial
customers and the tendency of certain of its existing and prospective customers
to implement changes in computer or network security prior to the end of the
calendar year.
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DEPENDENCE ON A FEW CUSTOMERS
V-ONE tends to have a few large customers rather than many small
customers. Approximately 34% of 1997 sales were to two customers, Internet
Solutions and Government Technology Services, Inc. A change in the financial
condition of a key customer, or the termination of its contractual arrangements
with a key customer, could adversely affect V-ONE.
RISK OF SALES TO GOVERNMENTS
In 1995, V-ONE derived a substantial portion of its revenue from the sale
of SmartWall to departments and agencies of the U.S. government and government
contractors. In 1996, V-ONE's revenues were attributable, in part, to a contract
with the National Security Agency. In 1997, approximately one-third of V-ONE's
total sales were attributable to contracts with various agencies and departments
of the United States government and of state and local governments. This
proportionate relationship has continued through September 30, 1998.
No government agency or department has an obligation to purchase products
from V-ONE in the future. Accordingly, V-ONE believes that future government
contracts and orders for its network security products will in part depend on
the continued favorable reaction of government agencies and departments to the
development capabilities of V-ONE and the reliability and perceived reliability
of its products.
V-ONE may be unable to sell its products to government departments and
agencies and government contractors and such sales, if any, may not result in
commercial acceptance of V-ONE's products. In addition, reductions or delays in
funds available for projects V-ONE is performing or to purchase its products
could adversely impact V-ONE's government contracts business.
Contracts involving the U.S. government are also subject to the risks of
disallowance of costs upon audit, changes in government procurement policies,
the necessity to participate in competitive bidding and, with respect to
contracts involving prime contractors or government-designated subcontractors,
the inability of such parties to perform under their contracts. V-ONE is also
exposed to the risk of increased or unexpected costs, causing losses or reduced
profits, under government and certain third-party contracts. Any of the
foregoing events could adversely effect V-ONE.
EFFECT OF GOVERNMENT REGULATION OF TECHNOLOGY EXPORTS
V-ONE currently sells its products abroad and intends to continue to
expand its relationships with international distributors. V-ONE's international
sales and operations could be subject to risks such as the imposition of
governmental controls, export license requirements, restrictions on the export
of critical technology, trade restrictions and changes in tariffs. In
particular, V-ONE's information security products are subject to the export
restrictions administered by the U.S. Department of Commerce. These
restrictions, in the case of some products, permit the export of encryption
products only with a specific export license.
These export laws also prohibit the export of encryption products to a
number of countries, individuals and entities and may restrict exports of some
products to a narrow range of end-users. In certain foreign countries, V-ONE's
distributors are required to secure licenses or formal permission before
encryption products can be imported.
V-ONE has obtained a license exception to export strong encryption from
the U. S. Department of Commerce on a worldwide basis (exception to the seven
terrorist countries) as long as the end user agrees to use the KRAKit(TM)
session key recreation capability. Foreign competitors that face less stringent
controls on their products may be able to compete more effectively than V-ONE in
the global network security market.
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MARKET VOLATILITY
The market price of V-ONE's Common Stock has been and is expected to
continue to be subject to significant fluctuations in response to variations in
quarterly operating results and other factors, such as announcements of new
products by V-ONE or its competitors and changes in financial estimates by
securities analysts or other events. Moreover, the stock market has experienced
extreme volatility that has particularly effected the market prices of equity
securities of many technology companies. This volatility has often been
unrelated and disproportionate to the operating performance of such companies.
Broad market fluctuations, as well as economic conditions generally and in the
software industry specifically, may adversely effect the market price of V-ONE's
Common Stock.
LACK OF DIVIDENDS
V-ONE has never declared or paid cash dividends on its Common Stock. V-ONE
intends to continue to retain earnings to finance growth and development of its
business and does not anticipate paying cash dividends on its Common Stock in
the foreseeable future. Any payment of cash dividends on shares of Common Stock
in the future will depend on V-ONE's financial condition, capital requirements,
earnings, restrictions under loan agreements, and other factors V-ONE's Board of
Directors may consider appropriate.
YEAR 2000 ISSUE
The Year 2000 issue concerns the potential exposures related to the
automated generation of business and financial misinformation resulting from the
application of computer programs that have been written using six digits (e.g.,
12/31/99), rather than eight (e.g., 12/31/1999), to define the applicable year
of business transactions.
V-ONE has completed the identification and assessment of most of its IT
systems, and those systems have been modified by the suppliers of those systems
to V-ONE to address Year 2000 problems. In addition to its internal systems,
V-ONE has begun to assess the level of Year 2000 problems associated with its
suppliers of software incorporated or bundled with its products, other
suppliers, customers and creditors. V-ONE has also started its identification
and assessment of its non-IT systems, which include its telephone systems,
heating and air-conditioning, elevators, and other business equipment.
V-ONE's own software products are Year 2000 compliant.
V-ONE's costs to date for its Year 2000 compliance program, excluding the
salaries of its employees, has not been material. In fact, most of V-ONE's IT
systems have been modified by the suppliers of those systems and such
modifications were included as part of normal upgrades of those systems.
Although V-ONE has not completed its assessment, it does not currently believe
that the future costs associated with its remaining IT systems or its non-IT
systems will be material.
V-ONE cannot determine currently its most likely worst case Year 2000
scenario, as it has not identified and assessed all of its systems, particularly
its non-IT systems. As V-ONE completes its identification and assessment of
internal and third party systems, it expects to develop contingency plans for
various worst-case scenarios. V-ONE expects to complete such contingency
planning by September 1999. A failure to address Year 2000 issues successfully
could have a material adverse effect on V-ONE's business, financial condition,
results of operations or cash flows.
EFFECTS OF CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BYLAWS
AND DELAWARE LAW
Certain provisions of V-ONE's Amended Certificate of Incorporation and of
Delaware law could delay or make difficult a merger, tender offer or proxy
contest involving V-ONE. Among other things, these provisions include a
classified board, prohibitions on removing directors except for cause, and other
requirements.
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RECENT DEVELOPMENTS
On November 20, 1998, V-ONE sold 1,860,000 shares of its Common Stock,
$0.001 par value per share ("Common Stock"), at $2.00 per share to a group of
accredited investors pursuant to its Placement Agent Agreement dated October 9,
1998, as amended, between the Company and LaSalle St. Securities, Inc.
("LaSalle"). The shares of Common Stock were sold pursuant to Rule 506 of
Regulation D ("Rule 506") promulgated under the Securities Act of 1933, as
amended ("Securities Act"). The Company received $3,366,600 in net sale proceeds
after payment of commissions of 8% of the gross sale proceeds and
non-accountable expense allowance of 1.5% of the gross sale proceeds to LaSalle.
LaSalle also received warrants in the aggregate to purchase 50,000 shares
of Common Stock at an exercise price of $2.125 per share. These warrants were
issued pursuant to Rule 506 of Regulation D promulgated under the Securities
Act.
On November 20, 1998, the Company also redeemed 2,462 shares of Series A
Convertible Preferred Stock ("Series A Shares") held by Advantage Fund II Ltd.
("Advantage") for $1,300 per share or $3,200,600 in the aggregate pursuant to
the terms of the Waiver Agreement dated as of September 22, 1998 between the
Company and Advantage. Advantage waived all accrued dividends on the Series A
Shares. The Series A Shares represented all of the shares of Series A
Convertible Preferred Stock that were outstanding on the date of redemption.
Between December 1, 1998 and December 11, 1998 V-ONE sold 675,000 shares
of Common Stock at $2.00 per share to a group of accredited investors pursuant
to Rule 506 ("December Offering"). The sale raised $1,350,000 in gross proceeds.
V-ONE paid $42,000 in finders fees in the aggregate in connection with the
December Offering to LaSalle and Coldwater Capital LLC. The $1,308,000 in net
proceeds raised in the December Offering will be used by V-ONE as working
capital.
WHERE YOU CAN FIND MORE INFORMATION
A Registration Statement on Form S-3 (the "Registration Statement"), under
the Securities Act relating to the securities offered hereby has been filed by
V-ONE with the Securities and Exchange Commission ("SEC") in Washington, D.C.
This Prospectus does not contain all of the information set forth in the
Registration Statement and its exhibits and schedules. Certain financial and
other information relating to V-ONE is contained in the documents indicated
below under "Incorporation of Certain Documents by Reference." This information
is not presented in this Prospectus or delivered with it. For further
information with respect to V-ONE and the securities offered hereby, reference
is made to such Registration Statement, exhibits and schedules.
Statements contained in this Prospectus as to the contents of any contract
or other document referred to are not necessarily complete. In each instance
reference is made to the copy of such contract or other document filed as
exhibits to the Registration Statement, each such statement being qualified in
all respects by such reference.
A copy of the Registration Statement may be inspected without charge or
may be obtained from the SEC upon the payment of certain fees prescribed by the
SEC at the public reference facilities maintained by the SEC in Washington, D.C.
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
SEC's Regional Offices in New York at 7 World Trade Center, Suite 1300, New
York, New York 10048 and in Chicago at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661.
V-ONE is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). Accordingly, V-ONE files
periodic reports, proxy statements and other information with the SEC. Such
reports, proxy statements and other information concerning V-ONE may be
inspected or copied at the Public Reference facilities at the SEC located at 450
Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.
Copies of such documents can be obtained at the Public Reference section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates or by
reference to V-ONE on the SEC's Worldwide Web page (http://www.sec.gov).
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by V-ONE with the SEC, are
incorporated in this Prospectus by reference:
(1) V-ONE's Annual Report on Form 10-K for the year ended December 31,
1997;
(2) V-ONE's Quarterly Report on Form 10-Q for the three months ended March
31, 1998;
(3) V-ONE's Quarterly Report on Form 10-Q for the six months ended June
30, 1998;
(4) V-ONE's Quarterly Report on Form 10-Q for the nine months ended
September 30, 1998;
(5) V-ONE's Current Report on Form 8-K filed May 14, 1998;
(6) V-ONE's Current Report on Form 8-K filed September 25, 1998;
(7) V-ONE's Current Report on Form 8-K filed November 9, 1998;
(8) V-ONE's Current Report on Form 8-K filed November 24, 1998;
(9) V-ONE's Current Report on Form 8-K filed December 16, 1998; and
(10) The description of V-ONE's Common Stock contained in V-ONE's
Registration Statement on Form 8-A filed on October 9, 1996, pursuant
to Section 12(g) of the Exchange Act.
All reports and other documents subsequently filed by V-ONE pursuant to
Sections 12, 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment that indicates that all securities offered hereby
have been sold or that deregisters all securities then remaining unsold, are
deemed to be incorporated by reference in and to be a part of this Prospectus
from the date of filing of such reports and documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference in this
Prospectus is deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in the
Registration Statement containing this Prospectus or in any other subsequently
filed document that also is or is deemed to be incorporated by reference in this
Prospectus modifies or supersedes such statement. Any statement so modified or
superseded is not deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
V-ONE will provide without charge to each person to whom this Prospectus
is delivered, upon the written or oral request of such person, a copy of any or
all of the foregoing documents referred to above that have been or may be
incorporated in this Prospectus by reference. Exhibits to such documents will
not be provided (unless such exhibits are specifically incorporated by reference
into the information that this Prospectus incorporates). Requests for such
documents should be directed to: V-ONE Corporation, 20250 Century Boulevard,
Germantown, Maryland 20874, attention: Charles B. Griffis, Senior Vice President
and Chief Financial Officer. Mr. Griffis' telephone number is (301) 515-5243.
SELLING STOCKHOLDERS
The following table sets forth the names of the shareholders selling
shares of Common Stock in this offering ("Selling Stockholders"), the number of
shares of Common Stock beneficially owned by each Selling Stockholder as of
December 1, 1998 and the number of shares of Common Stock that may be offered
for sale pursuant to this Prospectus by each such Selling Stockholder
("Shares"). Except as set forth below, none of the Selling Stockholders has held
any position, office or other material relationship with V-ONE or any of its
affiliates within the past three years other than as a result of the transaction
that results in its ownership of shares of Common Stock.
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<PAGE>
The Shares may be offered from time to time by the Selling Stockholders
named below. However, the Selling Stockholders are under no obligation to sell
all or any portion of such Shares, nor are the Selling Stockholders obligated to
sell any such Shares immediately pursuant to the Registration Statement of which
this Prospectus forms a part. Because the Selling Stockholders may sell all or
part of their Shares, no estimate can be given as to the number of shares of
Common Stock that will be held by any Selling Stockholder upon termination of
any offering made hereby.
<PAGE>
Common Stock Beneficially
Owned After Offering (1)
-------------------------
Shares of Common
Stock Beneficially Percent
Name of Selling Owned Prior to Common Stock of
Stockholder Offering Offered Hereby Number Outstanding
- --------------------------------------------------------------------------------
Andrew and Bette Vaccaro 10,000 10,000 0 *
Elliott Broidy 50,000 50,000 0 *
Karl F. Fox 50,000 50,000 0 *
Amy N. Karp 50,000 50,000 0 *
Madison Investment 40,000 40,000 0 *
Partners, L.P.
Murray D. Schaewitz Trust 10,000 10,000 0 *
Lewis M. Schott Trust 567,420 200,000 367,420 2.2
Lewis M. Schott 692,670(2) 52,250 440,420(3) 2.7
William and Dorothy Marbaker 10,000 10,000 0 *
John H. White 10,000 10,000 0 *
Robert E. Cleary 50,000 50,000 0 *
CLFS Equities LLP 30,000 30,000 0 *
Warner Blumenthal 10,000 10,000 0 *
Garo A. Partoyan 20,000 20,000 0 *
Conrad A. Riemer 50,000 50,000 0 *
Len and Sandra Coleman 20,000 20,000 0 *
Richard L. Denton 10,000 10,000 0 *
Richard J. Wright 10,000 10,000 0 *
Thomas and Kathleen Moore 10,000 10,000 0 *
Kathryn P. Kaplan Trust 10,000 10,000 0 *
Bryan J. O'Connor 20,000 20,000 0 *
Bryon and Joy Crowe 10,000 10,000 0 *
Stanley Shapiro Revocable 122,083 50,000 72,083 *
Trust
Shapiro Family Trust 93,568 11,250 82,318 *
Stanley Shapiro 135,458(4) 6,875 78,583(5) *
Atlas Capital Partners, L.P. 50,000 50,000 0 *
Albert McCaffery, Jr. 20,000 20,000 0 *
Cranshire Capital, L.P. 400,000 400,000 0 *
John Galt Fund, L.P. 50,000 50,000 0 *
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<PAGE>
Common Stock Beneficially
Owned After Offering (1)
-------------------------
Shares of Common
Stock Beneficially Percent
Name of Selling Owned Prior to Common Stock of
Stockholder Offering Offered Hereby Number Outstanding
- --------------------------------------------------------------------------------
Louis Lang 20,000 20,000 0 *
Joseph Lupo Profit 495,000 400,000 95,000 *
Sharing Plan
Joseph and Rosa Lupo 10,000 10,000 0 *
John and Susan Rogue 10,000 10,000 0 *
Thomas and Vicke Horvath 100,000 100,000 0 *
Richard F. Fox 75,000 75,000 0 *
Atlas II, L.P. 50,000 50,000 0 *
William C. Clement Trust 50,000 50,000 0 *
Reg W. Cordry 10,000 10,000 0 *
Norman Fine 39,521 27,000 12,521 *
JAD Management 15,000 15,000 0 *
William Rivkin Trust 10,000 10,000 0 *
Jayant and Madhu Desai 20,000 20,000 0 *
John F. Whittemore 95,000 25,000 70,000 *
Bryan T. Vanas 77,500 17,500 60,000 *
Professional Trading 150,000 150,000 0 *
Services Est.
Lee and Linda DeVisser 180,481 22,625 157,856 1.0
Martin Lane Clark 125,000 125,000 0 *
Advantage Fund II Ltd. 833,576(6) 200,000 633,576(7) 3.8
Burnett Moody 25,762 2,500 23,262 *
- --------------------------------------------------------------------------------
* Less than 1%.
(1) Assumes the sale of all Shares.
(2) Includes 52,250 shares of Common Stock owned by Lewis M. Schott, 567,420
shares of Common Stock owned by the Lewis M. Schott Trust and 73,000 shares of
Common Stock owned by the Lewis Schott Foundation.
(3) Includes 367,420 shares of Common Stock owned by the Lewis M. Schott Trust
and 73,000 shares of Common Stock owned by the Lewis Schott Foundation.
(4) Includes 13,375 shares of Common Stock owned by Stanley Shapiro and 122,083
shares of Common Stock owned by the Stanley Shapiro Revocable Trust.
(5) Includes 6,500 shares of Common Stock owned by Stanley Shapiro and 72,083
shares of Common Stock owned by the Stanley Shapiro Revocable Trust.
(6) As of December 14, 1998 includes 633,576 shares of Common Stock issuable on
exercise of warrants to purchase Common Stock and 200,000 shares of Common
Stock.
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(7) Includes 633,576 shares of Common Stock issuable on exercise of warrants to
purchase Common Stock.
USE OF PROCEEDS
There will be no proceeds to V-ONE from the sale of the Shares by the
Selling Stockholders. Any proceeds from the sales of Common Stock received by
the Selling Stockholders will be retained by the Selling Stockholders.
V-ONE will pay substantially all of the expenses incident to the
registration, offering and sale of the Shares to the public other than
commissions or discounts of underwriters, broker-dealers or agents and the
expenses of counsel to the Selling Stockholders. Such expenses are estimated to
be approximately $47,000.00. V-ONE has also agreed to indemnify certain Selling
Stockholders against certain liabilities, including liabilities under the
Securities Act.
PLAN OF DISTRIBUTION
The Shares are being offered on behalf of the Selling Stockholders, and
V-ONE will not receive any proceeds from this offering. See "Use of Proceeds."
The Shares may be sold or distributed from time to time by the Selling
Stockholders, or by pledgees, donees or tranferees of, or other successors in
interest to, the Selling Stockholders, directly to one or more purchasers
(including pledgees) or through brokers, dealers or underwriters who may act
solely as agents or may acquire Shares as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed.
The distribution of the Shares may be effected in one or more of the
following methods: (1) ordinary brokers' transactions, which may include long or
short sales; (2) transactions involving cross or block trades or otherwise on
the Nasdaq National Market or on any other stock exchange or trading facility on
which the Common Stock may be trading; (3) purchases by brokers, dealers or
underwriters as principal and resale by such purchasers for their own accounts
pursuant to this Prospectus; (4) "at the market" to or through market makers or
into an existing market for the Common Stock; (5) in other ways not involving
market makers or established trading markets, including direct sales to
purchasers or sales effected through agents; (6) through transactions in
options, swaps or other derivatives (whether exchange-listed or otherwise); or
(7) any combination of the foregoing, or by any other legally available means.
In addition, the Selling Stockholders or their successors in interest may enter
into hedging transactions with broker-dealers who may engage in short sales of
shares of Common Stock in the course of hedging the positions they assume with
the Selling Stockholders. The Selling Stockholders or their successors in
interest may also enter into option or other transactions with broker-dealers
that require the delivery by such broker-dealers of the Shares, which Shares may
be resold thereafter pursuant to this Prospectus.
In addition, the Selling Stockholders may, from time to time, sell short
the Common Stock of V-ONE. In such instances, this Prospectus may be delivered
in connection with such short sales and the Shares may be used to cover such
short sales. Any or all of the sales or other transactions involving the Shares
described above, whether effected by the Selling Stockholders, any broker-dealer
or others, may be made pursuant to this Prospectus. In addition, any Shares that
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under
Rule 144 rather than pursuant to this Prospectus. The Shares may also be offered
in one or more underwritten offerings, on a firm commitment or best efforts
basis.
From time to time the Selling Stockholders may transfer, pledge, donate or
assign their Shares to lenders, family members and others and each of such
persons upon acquiring the Shares will be deemed to be a "Selling Stockholder"
for purposes of this Prospectus. The number of Shares beneficially owned by the
Selling Stockholders who so transfer, pledge, donate or assign Shares will
decrease as and when they take such actions. The plan of distribution for Shares
sold hereunder will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be Selling Stockholders hereunder. If
V-ONE is notified by a Selling Stockholder that a donee or pledgee intends to
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<PAGE>
sell more than 500 Shares, a supplement to this Prospectus will be filed.
Brokers, dealers, underwriters or agents participating in the distribution
of the Shares as agents may receive compensation in the form of commissions,
discounts or concessions from the Selling Stockholders and/or purchasers of the
Shares for whom such broker-dealers may act as agent, or to whom they may sell
as principal, or both (which compensation as to a particular broker-dealer may
be less than or in excess of customary commissions). The Selling Stockholders
and any broker-dealers who act in connection with the sale of Shares hereunder
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any commissions they receive and proceeds of any sale of Shares may be deemed to
be underwriting discounts and commissions under the Securities Act.
Neither V-ONE nor any Selling Stockholder can presently estimate the
amount of such compensation. V-ONE knows of no existing arrangements between any
Selling Stockholder and any other stockholder, broker, dealer, underwriter or
agent relating to the sale or distribution of the Shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares may not simultaneously engage in
market making activities with respect to V-ONE's Common Stock for a period of
one business day prior to the commencement of such distribution and ending upon
such person's completion of participation in the distribution, subject to
certain exceptions for passive market making transactions. In addition and
without limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M, which provisions may
limit the timing of purchases and sales of shares of Common Stock by the Selling
Stockholders.
At the time a particular offer of Shares is made, to the extent required,
a supplemental Prospectus will be distributed that will set forth the number of
shares being offered and the terms of the offering including the name or names
of the Selling Stockholders and any underwriters, dealers or agents, the
purchase price paid by an underwriter for the Shares purchased from the Selling
Stockholders and any discounts, concessions or commissions allowed or reallowed
or paid to dealers.
In order to comply with the securities laws of certain states, if
applicable, the Shares may be sold in such jurisdictions only through registered
or licensed brokers or dealers.
DESCRIPTION OF CAPITAL STOCK
GENERAL
V-ONE is authorized to issue up to 33,333,333 shares of Common Stock,
$0.001 par value, and 13,333,333 shares of Preferred Stock, $0.001 par value.
The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete. It is subject to, and qualified
in its entirety by, the provisions of V-ONE's Restated Certificate of
Incorporation and Restated Bylaws, and by the provisions of applicable law.
COMMON STOCK
As of December 14, 1998, there were 15,803,046 shares of Common Stock
outstanding that were held of record by approximately 2,000 shareholders.
The holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of shareholders. Dividends, if any,
may be declared by the Board of Directors out of funds legally available for the
payment of dividends. Dividends may be paid in cash, in property or in shares of
capital stock. In the event of any voluntary or involuntary liquidation, sale,
or winding up of V-ONE, the holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities and liquidation
preferences of any outstanding shares of Preferred Stock. Holders of Common
Stock have no preemptive rights to subscribe for any of V-ONE's securities or
rights to convert their Common Stock into any other securities. There are no
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<PAGE>
redemption or sinking fund provisions applicable to the Common Stock.
PREFERRED STOCK
V-ONE's Board of Directors has the authority to issue up to 13,333,333
shares of Preferred Stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any series or the designation of such
series, without any further vote or action by shareholders. The issuance of
preferred stock may have the effect of delaying or preventing a change in
control of V-ONE.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the shares of Common
Stock offered hereby will be passed upon for V-ONE by Kirkpatrick & Lockhart
LLP, 1800 Massachusetts Avenue, N.W., Washington, D.C. 20036.
EXPERTS
The balance sheets as of December 31, 1996 and 1997, and the statements of
operations, shareholders' equity (deficit) and cash flows for each of the three
years in the period ended December 31, 1997, incorporated by reference in this
Prospectus, have been incorporated by reference herein in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of that firm as experts in accounting and auditing.
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<PAGE>
No dealer, salesperson or any
other person is authorized to give any
information or to make any
representations in connection with this
Prospectus and, if given or made, such
information or representations must not 2,660,000 Shares
be relied upon as having been authorized
by V-ONE. This Prospectus does not
constitute an offer to sell or a
solicitation of an offer to buy any
security other than the securities
offered by this Prospectus, or an offer
to sell or a solicitation of an offer to
buy any securities by anyone in any V-ONE Corporation
jurisdiction in which such offer or
solicitation is not authorized or is
unlawful. The delivery of this
Prospectus shall not, under any
circumstances, create any implication
that the information herein is correct
as of any time subsequent to the date of
the Prospectus.
------------------------
TABLE OF CONTENTS
Page COMMON STOCK
----
V-ONE..............................................2
Risk Factors.......................................2
Recent Developments................................10
Where You Can Find More Information................10
Incorporation of Certain Documents By Reference....11
Selling Stockholders...............................11 _________________
Use of Proceeds....................................14
Plan of Distribution...............................14 PROSPECTUS
Description of Capital Stock.......................15
Legal Matters......................................16 _________________
Experts............................................16
_____________, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses expected to be incurred by
V-ONE Corporation (the "Company") in connection with the sale and distribution
of the shares of Common Stock being registered. With the exception of the
registration fee, all amounts shown are estimates.
SEC registration fee...................... $ 1,988.00
Printing and engraving expenses........... 5,000.00
Legal fees and expenses .................. 25,000.00
Accounting fees and expenses.............. 15,000.00
Miscellaneous fees and expenses........... 12.00
--------------
Total............................... $ 47,000.00*
==============
* Estimated
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law, as amended ("DGCL"),
provides that 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
(other than an action by or in the right of the corporation) by reason of the
fact that the person 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 the person in connection with such action, suit or proceeding, if
the person acted in good faith and in a manner the person 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 the
person's conduct was unlawful. Section 145 further provides that a corporation
similarly may indemnify any such person serving in any such capacity 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, against expenses actually and reasonably incurred in
connection with the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
II-1
<PAGE>
the case, such person is fairly and reasonably entitled to indemnity for such
expenses that the Court of Chancery or such other court shall deem proper.
Article Ninth of the Company's Amended and Restated Certificate of
Incorporation provides that the Company shall indemnify, to the fullest extent
now or hereafter permitted by law, each director, officer, employee or agent
(including each former director, officer, employee or agent) of the Company who
was or is made party to or a witness in or is threatened to be made a party to
or a witness in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was an authorized representative of the Company, against all
expenses (including attorneys' fees and disbursements), judgments, fines
(including excise taxes and penalties) and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding.
Article VI, Section 6.1 of the Company's Amended Bylaws provides that each
person who was or is made a party to or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding") by reason of the fact that he/she is or was a
Director, officer, agent or employee of the Company, shall be indemnified and
held harmless by the Company to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or may hereafter be
amended, against any expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, actually and reasonably incurred by such person in
connection therewith. Notwithstanding the foregoing, no Director shall be
indemnified nor held harmless in violation of the provisions set forth in the
Company's Amended and Restated Certificate of Incorporation; and no Director,
officer, agent or employee shall be indemnified nor held harmless by the Company
unless:
(i) In the case of conduct in his/her official capacity with the
Company, he/she acted in good faith and in a manner he/she
reasonably believed to be in the best interest of the Company;
(ii) In all other cases, his/her conduct was at least not opposed to the
best interests of the Company nor in violation of the Amended and
Restated Certificate of Incorporation, Bylaws or any agreement
entered into by the Company; and
(iii) In the case of any criminal proceeding, he/she had no reasonable
cause to believe that his/her conduct was unlawful.
II-2
<PAGE>
Exhibit 16. Exhibits.
Number Description of Exhibit
----- ----------------------
5 Opinion of Kirkpatrick & Lockhart LLP
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Kirkpatrick & Lockhart LLP (included in
Exhibit 5)
24 Power of Attorney (see page II-5)
__________________
Exhibit 17. 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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the 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 or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the 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 or
Form S-8, and the information required to be included in a
post effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration
statement.
II-3
<PAGE>
(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 that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of 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 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant 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. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant 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 registrant 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 Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
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 Germantown, State of Maryland, on this 15th day of
December, 1998.
V-ONE CORPORATION
By: /s/ David D. Dawson
---------------------------------------
David D. Dawson
President and Chief Executive Officer
Know all men by these presents, that each person whose signature appears
below constitutes and appoints David D. Dawson and Charles B. Griffis, and each
of them, his or her true and lawful attorneys-in-fact and agents with full power
of substitution and resubstitution for him or her in his or her name, place and
stead, in any and all capacities, to sign any or all amendments to this
registration statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, to all intents and
purposes and as fully as they might or could do in person, thereby ratifying and
confirming all that such attorneys-in-fact and agents, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
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.
NAME TITLE DATE
- ---- ----- ----
/s/ David D. Dawson
- -------------------
David D. Dawson Chairman of the Board, December 15, 1998
President, Chief Executive
Officer and Director
/s/ Charles B. Griffis
- ----------------------
Charles B. Griffis Senior Vice President, December 15, 1998
Chief Financial Officer and
Treasurer
(Principal Financial Officer)
/s/ Mark R. Fields
- ------------------
Mark R. Fields Controller December 15, 1998
(Principal Accounting Officer)
/s/ James F. Chen
- -----------------
James F. Chen Director December 15, 1998
II-5
<PAGE>
NAME TITLE DATE
- ---- ----- ----
/s/ Charles C. Chen
- -------------------
Charles C. Chen Director December 15, 1998
/s/ A.L. Giannopoulos
- ---------------------
A.L. Giannopoulos Director December 15, 1998
/s/ William E. Odom
- -------------------
William E. Odom Director December 15, 1998
II-6
<PAGE>
EXHIBIT INDEX
Number Description of Exhibit
------ ----------------------
5 Opinion of Kirkpatrick & Lockhart LLP
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Kirkpatrick & Lockhart LLP (included in
Exhibit 5)
24 Power of Attorney (see page II-5)
II-7
EXHIBIT 5
_______________________________
KIRKPATRICK & LOCKHART LLP
_______________________________
1800 MASSACHUSETTS AVENUE, N.W.
2ND FLOOR
WASHINGTON, D.C. 20036-1800
TELEPHONE (202) 778-9000
FACSIMILE (202) 778-9100
December 16, 1998
V-ONE Corporation
20250 Century Boulevard, Suite 300
Germantown, Maryland 20874
Re: V-ONE Corporation
Registration Statement on Form S-3
Ladies/Gentlemen:
We have acted as counsel to V-ONE Corporation, a Delaware corporation
("Corporation"), in connection with the preparation and filing of the
above-captioned Registration Statement on Form S-3, Registration Number
333-_____ ("Registration Statement"), under the Securities Act of 1933, as
amended, covering the resale of 2,660,000 shares of Common Stock, $0.001 par
value per share ("Common Stock"), of the Corporation held by certain
shareholders of the Company ("Shareholders").
We have examined copies of the Registration Statement, the Prospectus
forming a part thereof, the Certificate of Incorporation and Bylaws of the
Corporation, each as amended to date, the minutes of various meetings and
unanimous written consents of the Board of Directors and the shareholders of the
Corporation, and original, reproduced or certified copies of such records of the
Corporation and such agreements, certificates of public officials, certificates
of officers and representatives of the Corporation and others, and such other
documents, papers, statutes and authorities as we deem necessary to form the
basis of the opinions hereinafter expressed. In such examination, we have
assumed the genuineness of all signatures and the conformity to original
documents of all documents supplied to us as copies. As to various questions of
fact material to such opinions, we have relied upon statements and certificates
of officers and representatives of the Corporation and others.
Based on the foregoing, we are of the opinion that each of the 2,660,000
shares of Common Stock held by the Shareholders are duly and validly issued,
fully paid and nonassessable.
<PAGE>
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the Prospectus forming part of the Registration Statement and to
your filing a copy of this Opinion as an exhibit to said Registration Statement.
Sincerely,
/s/ Kirkpatrick & Lockhart LLP
KIRKPATRICK & LOCKHART LLP
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement of
V-ONE Corporation (the Company) on Form S-3 of our report dated March 13, 1998,
on our audits of the financial statements of the Company as of December 31, 1996
and 1997, and for the years ended December 31, 1995, 1996, and 1997, which
report is included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997. We also consent to the reference to our firm under the
caption "Experts".
/s/ PricewaterhouseCoopers LLP
McLean, Virginia
December 16, 1998
