PROSPECTUS
PROFILE TECHNOLOGIES, INC.
355,000 Shares Common Stock ($.001 par value)
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS
This Prospectus relates to 355,000 shares of common stock, $.001 par value
per share (the "Common Stock"), of PROFILE TECHNOLOGIES, INC. (the "Company")
issuable upon exercise of stock purchase warrants issued by the Company in
private placements. The stock purchase warrants are exercisable in amounts
ranging from $1.125 to $8.40 per share generally and expire October 31, 2004.
However, the stock purchase warrants issued to the Underwriter as described
herein expire February 12, 2001. The shares of Common Stock that may be acquired
by the Selling Shareholders upon exercise of the stock purchase warrants are
collectively called the "Shares." The Selling Shareholders are identified in
this Prospectus under the heading "Selling Shareholders."
The Shares may be offered by Selling Shareholders from time to time: (i) in
transactions in the over-the-counter market, on the automated inter-dealer
system on which shares of Common Stock of the Company are then listed, in
negotiated transactions, or a combination of such methods of sale, and (ii) at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Selling Shareholders may
effect such transactions by selling the Shares to or through securities
broker-dealers. Such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the Selling Shareholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). See "Selling
Shareholders" and "Plan of Distribution." Selling Shareholders may also sell
such shares pursuant to Rule 144 or 144A under the Securities Act of 1933 if the
requirements for the availability of such rules have been satisfied.
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company. The Company may, however, receive
as much as $1,816,250 in proceeds from the exercise of stock purchase warrants
should the holders choose to so exercise. The Company intends to use the net
proceeds it has received from such exercise for operating expenses. See "SUMMARY
- - Use of Proceeds."
The Company has agreed to bear all expenses (other than underwriting
discounts, selling commissions and underwriter expense allowance, and fees and
expenses of counsel and other advisers to the Selling Shareholders) in
connection with the registration and sale of the Shares being offered by the
Selling Shareholders. The Company has agreed to indemnify the Selling
Shareholders against certain liabilities under the Securities Act of 1933, as
amended (the "Securities Act").
The Common Stock of the Company is listed and traded on NASDAQ on the Small
Cap Market under the symbol PRTK. On June 26, 1998, the last reported sale price
of the Common Stock was $17.00 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is July 13, 1998
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AVAILABLE INFORMATION
The Company has filed with the United States Securities and Exchange
Commission ("SEC") a Registration Statement on Form S-3 ("Registration
Statement") under the Securities Act of 1933, as amended ("1933 Act"), with
respect to the securities being offered by this Prospectus. This Prospectus does
not contain all information set forth in the Registration Statement and the
exhibits thereto. For further information with respect to the Company and the
securities offered hereby, reference is made to the Registration Statement and
the exhibits thereto. The Company files periodic reports under the Securities
Exchange Act of 1934, as amended. All reports and other information, including
all of these documents, may be inspected and copied at the public reference
facilities of the SEC in Washington, D.C., and at the SEC's regional offices at
7 World Trade Center, New York, New York 10048 and at 500 West Madison Street,
Room 1400, Chicago, Illinois 60661- 2511. Copies may be obtained from the Public
Reference Section of the SEC, Washington, D.C. 20549 at prescribed rates. Copies
of the Registration Statement are available from the SEC. Statements contained
in this Prospectus concerning the provisions of documents filed with the
Registration Statement as exhibits are necessarily summaries of such documents,
and each such statement is qualified in its entirety by reference to the copy of
the applicable document filed with the SEC. The SEC also maintains a Web site
that contains reports, proxy and information statements and other information
regarding issuers. The Web site is at (http://www.sec.gov).
The Company will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of any of the
information that is incorporated by reference in this prospectus (not including
exhibits to the information that is incorporated by reference unless the
exhibits are themselves specifically incorporated by reference). Any such
request should be addressed to Profile Technologies Inc., 1077 Northern Blvd.,
Roslyn, N.Y. 11576. Att Debra Savishinsky. Telephone number (516) 365-1909.
SUMMARY
The Company
Profile Technologies, Inc. (the "Company") was originally incorporated in
the State of Washington in 1986 and commenced developmental activities in 1988
under the name Pipeline Profiles, Ltd. On December 1, 1995, the Company changed
its domicile from Washington to Delaware, changed its name to Profile
Technologies, Inc. and effected a two-for-one forward split of its Common Stock.
All references in this Prospectus to Common Stock or warrants outstanding,
earnings per share and other references to the Company's Common Stock for all
years give effect to this two-for-one forward split.
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The Company is in the business of developing and commercializing potential
processes for the non-destructive, non-invasive testing of both above ground and
buried pipelines to evaluate the condition and integrity of the pipeline. The
process, called the dual Pulse Propagation Analyzer ("PPA"), uses a patented
waveform analysis process which extracts point-to-point pipeline integrity
information. This process has already involved the issuance of four United
States Patents and the application for an additional ten patents with the United
States Patent Office. The Company has also obtained certain foreign patent
protection. The PPA process is designed to reduce time, effort and cost in
performing corrosion surveys and coating inspections of both accessible and
inaccessible pipeline segments. In March of 1998, the Company announced that it
had entered into its first commercial agreement to provide its corrosion
inspection and evaluation services to ASCG Inspection, Inc., an Alaskan based
pipeline inspection company. See "Material Changes in Business."
USE OF PROCEEDS
The 355,000 shares of Common Stock issuable upon conversion of the stock
purchase warrants are being offered for the account of the Selling Shareholders.
The Company will not receive any proceeds from their sale of their Shares, but
it will receive approximately $1,816,250 if all of the common stock purchase
warrants are exercised, of which there is no assurance. The Company intends to
use any net proceeds from the exercise of the warrants for working capital and
general corporate purposes.
RISK FACTORS
In evaluating the Company's business, prospective investors should
carefully consider the risk factors set forth below as well as the other
information set forth in this Prospectus before purchasing the Shares offered
hereby.
Development Stage Enterprise - Continuing Losses - Accumulated Deficit. The
Company is in the development stage and, to date, has been principally engaged
in organization and research and development activities. The Company has not
generated significant operating revenues. At March 31, 1998, the Company had an
accumulated deficit of $2,931,782. Furthermore, for the year ended June 30,
1997, the Company incurred a net loss of $1,035,003 and for the nine month
period ended March 31, 1998, the Company incurred a further net loss of
$498,925. Because of the start up nature of its business, the Company is likely
to incur additional losses in the future. The likelihood of the success of the
Company must be considered in light of the problems, expenses, difficulties,
complications, delays and uncertainties frequently encountered in connection
with the establishment and development of new technologies. These include but
are not limited to competition, the need to develop customer support
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capabilities, sales and marketing expertise and market acceptance. Even if the
Company is able to develop technologies which are commercially viable, there can
be no assurance that the Company will generate sufficient revenues from the
services it intends to provide utilizing such technology or from the sale or
licensing of such technology to be profitable.
Unproven Technology; Possible Obsolescence. The Company, since its
inception in 1988, has focused on the development of its Pulse Propagation
Analyzer process and expects to continue such development and testing. As with
most developing technologies, the Company's process is currently unproven in the
marketplace. Acceptance of the Company's process is dependent upon potential
users of the technology believing that information derived from use of the
Company's PPA process is superior to current methods of testing buried or above
ground pipelines for corrosion and coating problems. There can be no assurance
that the Company's technology will become accepted in the marketplace or, if
accepted, will not become obsolete because of some other, as yet unidentified,
technology.
Dependence on Key Personnel. The success of the Company's business is
highly dependent upon Gale D. Burnett, Henry Gemino and Dr. John Kuo, its
President, its Executive Vice-President and Chief Operating Officer, and its
scientific consultant respectively. Each of these individuals has been devoting
all or a substantial portion of his time to the affairs of the Company, and it
is anticipated that they will continue to do so into the foreseeable future. The
Company has obtained "key-man" insurance in the amount of one million dollars
each on Mr. Burnett and Mr. Gemino. The Company has not entered into employment
agreements with either of these individuals. The loss of Mr. Burnett, Mr. Gemino
or Dr. Kuo's services could have a material adverse effect upon the Company's
business and development. The Company's growth and its effectiveness in
expanding its management infrastructure will also depend upon its ability to
attract and retain skilled management personnel. See "Management."
Lack of Commercial Contracts - Single Source of Revenue. The Company has
completed the initial phase of development of its primary process, the Pulse
Propagation Analyzer, but is continuing to develop, test and refine its process,
make it more adaptable to different environments and develop different
applications for its existing technology. The Company's process and technology
have not yet been accepted for widespread commercial application. To date, the
Company's contracts have been small research and development contracts which it
entered into as part of its development activity. To date, the Company has
entered into only one commercial agreement, which is not scheduled to begin
until July, 1998 for the utilization of its PPA process or technology. There can
be no assurance that the refinery, petrochemical, utility, pipeline or any other
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industries will accept the Company's technology or that the Company will be able
to obtain additional commercial contracts within any particular time frame or at
all. While the Company's technology may ultimately have many different
applications, the Company's research and development efforts thus far have
produced only one potential commercial application. Until other technology is
developed, of which there is no assurance, the Company will be totally dependent
upon the PPA process for its revenues for the foreseeable future.
Patents and Proprietary Technology. The Company's success depends in large
part upon its ability to protect its processes and technology under United
States and international patent laws and other intellectual property laws. The
Company is not aware of any patents being applied for by others which directly
relate to the technology covered by the Company's patents or patent applications
which are still pending. While the Company believes that its patent position
would be strong, there can be no assurances that the Company's patents and
patent applications will afford it full protection against potential competitors
or that competitors will not develop similar processes or products outside the
protection of the Company's patents or patent applications. Further, there can
be no assurance that new (alternative) technologies will not render the
Company's patents and technology obsolete or unsuitable for commercial
exploitation. If the Company were to become involved in litigation as to any of
its patents which it presently holds or which it may be granted in the future,
such litigation could be costly, time consuming and unpredictable as to outcome.
The Company also intends to rely on its unpatented proprietary knowledge, and
there can be no assurance that others will not develop or acquire equivalent
proprietary information.
Competition. Although the Company believes that no other companies
currently offer the type of technology represented by the Company's Pulse
Propagation Analyzer process, it believes the competition in all areas of the
corrosion control industry is likely to increase as the demand for corrosion
control products and services grows and as more companies enter the market and
expand their range of services. The corrosion control industry is highly
fragmented among numerous companies that use various methods for detecting
corrosion. However, many of the Company's competitors or potential competitors
may have substantially greater financial, technical and/or marketing resources
than the Company. There can be no assurance that the Company will be able to
respond effectively to increased competition in the corrosion control industry.
Royalty Rights to Certain Individuals, Including Insiders. Pursuant to
certain contractual agreements in place, the Company is obligated to pay 5% of
any net pre-tax income it earns to certain individuals, including insiders who
include the Chief Executive Officer, the President and the Executive
Vice-President. While no payments have been made thus far because of a lack of
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net pre-tax income, if the Company becomes profitable in the future, of which
there is no assurance, such royalty payments could become substantial and would
have a negative impact on the profitability of the Company.
Reliance on Certain Industries. A major portion of the Company's
anticipated revenues is expected to be derived from customers in the refinery,
petrochemical and pipeline industries. A downturn in the business of potential
customers in these industries would likely produce a material adverse effect on
the Company's revenues.
Uninsured Risks. The Company intends to provide a diagnostic service to
pipeline users in the refinery, petrochemical, pipeline, petroleum and public
utility industries. This intended service will create the risk of exposure to
liability under common law and under various federal and state statutes. While
the Company will seek to minimize its exposure to such potential liability by
the use of provisions in its contracts with its customers, there can be no
assurance that the Company can ultimately avoid exposure on all potential
sources of liability. The Company has obtained product and liability insurance
to cover its potential liability, but there can be no assurance that such
insurance will fully insure the Company from all potential liability. The
Company intends to operate safely and prudently; however, the Company does not
maintain funded reserves to provide for the payment of partially or completely
uninsured claims and accordingly, a partial or completely uninsured claim, if
successful and of sufficient magnitude, would have an adverse effect on the
Company's financial condition.
No Dividends Anticipated. While payment of dividends on the Company's
Common Stock rests with the discretion of the Board of Directors, there can be
no assurance that dividends can or will ever be paid. Payments of dividends are
contingent upon, among other things, future earnings, if any, and the financial
condition of the Company, capital requirements, general business conditions, and
other factors which cannot now be predicted. The Company has never paid
dividends and does not presently intend to pay dividends. Persons desiring or in
need of dividend income should not invest in the Shares.
No Limitation on Future Issuances of Securities. There are no restrictions
on the future issuance of securities of the Company, either equity or debt, by
the Board of Directors without shareholder approval. If issued below the then
book value for the Company's Common Stock, the issuance of additional equity
securities would be dilutive to the then existing shareholders. No additional
stock issuances are currently contemplated by the Company. There can be no
assurance as to when the Company may need additional financings, if at all, or,
if available, that such financings will be on terms and conditions favorable to
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the Company or that any equity financings will not cause dilution to then
existing shareholders. Failure to timely obtain any necessary financing will
materially and adversely affect the proposed timing of the availability and
marketing of the Company's technology and product.
RECENT DEVELOPMENTS
On March 20, 1998, the Company announced that it had reached agreement with
ASCG Inspection, Inc., an Alaska based pipeline inspection company to provide
its patented and proprietary corrosion inspection services. The agreement
provides for the inspection of approximately one hundred road and caribou
crossings on British Petroleum pipelines on the North Slope of Alaska. The
inspection program is expected to commence approximately July 1, 1998 unless
weather conditions permit earlier inspection. The revenue amount agreed upon is
approximately $100,000. The significance of the agreement is that it represents
the first commercial agreement for the Company. There can be no assurance,
however, that the Company will be able to obtain additional commercial contracts
or that the Company's technology will become commercially acceptable.
SELLING SHAREHOLDERS
The shares of Common Stock (the "Shares") underlying stock purchase
warrants held by the Selling Shareholders are being offered by the Selling
Shareholders identified in the following table.
<TABLE>
<CAPTION>
Number of
Name of Shares That Percentage
Selling Ownership Prior May Be Ownership Owned After
Shareholder to Offering Offered After Offering Offering
- ----------- ----------- ------- -------------- --------
<S> <C> <C> <C> <C>
Debbie Hackel 60,000(2)(3) 60,000 None 0%
R.F. Lafferty & Co. 30,000(2)(3) 30,000 None 0%
Commonwealth Assoc. 10,000(2)(3) 10,000 None 0%
Allen G. Reeves(4)(5) 135,000(2) 70,000 65,000 1.5%
John Kuo(5) 350,000(2) 75,000 275,000 6.0%
Fred Kudish 52,600(1) 5,000 47,600 1.1%
Robert Hughes 5,000(2) 5,000 None 0%
Robert and Catherine Whitrock 41,600(1) 10,000 31,600 *
Forest and Cynthia Taylor 13,000(1) 10,000 3,000 *
Douglas and Hedy Lemieux 5,200(1) 5,000 200 *
Ted and Nadine Branch 10,000(1) 5,000 5,000 *
Victor C. Gustafson 5,000(2) 5,000 None 0%
Murphy Evans(5) 136,000(1) 65,000 71,000 1.6%
- ----------
</TABLE>
*Less than 1%
(1) Includes shares covered by presently exercisable stock purchase warrants as
well as common stock.
(2) Consists only of common stock underlying purchase warrants.
(3) Underwriter's Warrants.
(4) Acts as legal counsel.
(5) Director.
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There are a total of 1,140,000 of the Company's common stock purchase
warrants outstanding, of which shares underlying 355,000 of such warrants
(including 100,000 underwriter's warrants) are being registered hereunder. The
average exercise price of all outstanding warrants is $3.59.
Each Selling Shareholder has represented that he purchased the common stock
purchase warrant for investment and with no present intention of distributing or
reselling such Shares unless registered for resale. However, in recognition of
the fact that holders of restricted securities may wish to be legally permitted
to sell their Shares when they deem appropriate, the Company has filed with the
Commission under the Securities Act a Form S-3 registration statement of which
this Prospectus forms a part with respect to the resale of the Shares from time
to time in the over-the-counter market or in privately negotiated transactions.
The Company has agreed to prepare and file such amendments and supplements to
the Registration Statement and to use its best efforts to obtain effectiveness
of the Registration Statement and to keep the Registration Statement effective
until all of the Shares offered hereby have been sold pursuant thereto, until
such Shares are no longer, by reason of Rule 144 under the Securities Act or any
other rule of similar effect, required to be registered for the sale thereof by
the Selling Shareholders, or for a period of 180 days, whichever occurs first.
Certain of the Selling Shareholders, their associates and affiliates may
from time to time be customers of, engage in transactions with, and/or perform
services for the Company or its subsidiaries in the ordinary course of business.
PLAN OF DISTRIBUTION
The sale of the Shares by the Selling Shareholders may be effected from
time to time (i) in transactions in the over-the-counter market, in negotiated
transactions, or through a combination of such methods of sale, and (ii) at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
effect such transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from the Selling Shareholders and/or the purchasers
of the Shares for which 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 in excess of customary compensation). Selling Shareholders may also sell
such shares pursuant to Rule 144 or Rule 144A under the Securities Act of 1933
if the requirements for the availability of such rules have been satisfied.
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The Selling Shareholders and any broker-dealers who act in connection with
the sale of the Shares hereunder may be deemed to be "underwriters" within the
meaning of ss. 2(11) of the Securities Act, and any commissions received by them
and profit on any resale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
The Company has advised the Selling Shareholders that they and any
securities broker-dealers or others who may be deemed to be statutory
underwriters will be subject to the Prospectus delivery requirements under the
Securities Act of 1933. The Company has also advised the Selling Shareholders
that in the event of a "distribution" of his or its shares, such Selling
Shareholders, any "affiliated purchasers," and any broker-dealer or other person
who participates in such distribution may be subject to Rules 100-105 of
Regulation M under the Securities Exchange Act of 1934 ("1934 Act") until his or
its participation in that distribution is completed. A "distribution" is defined
in Rule 100 of Regulation M as an offering of securities "that is distinguished
from ordinary trading transactions by the magnitude of the offering and the
presence of special selling efforts and selling methods." The Company has also
advised the Selling Shareholders that Rule 104 of Regulation M under the 1934
Act prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or maintaining the price of the Common Stock in connection with
this offering.
DESCRIPTION OF COMMON STOCK
As of the date of this Prospectus, the Company has 4,262,600 shares of its
Common Stock issued and outstanding. The shares of Common Stock covered by this
Prospectus will be fully paid and nonassessable when issued. Holders of the
Common Stock have no preemptive rights. Each stockholder is entitled to one vote
for each share of Common Stock held of record by such stockholder. There is no
right to cumulate votes for election of directors. Upon liquidation of the
Company, the assets then legally available for distribution to holders of the
Common Stock will be distributed ratably among such shareholders in proportion
to their stock holdings. Holders of Common Stock are entitled to dividends when,
as and if declared by the Board of Directors out of funds legally available
therefor.
The authorized capital stock of the Company consists of 10,000,000 shares
of Common Stock, $.001 par value per share. A quorum for purposes of meetings of
common shareholders consists of a majority of the issued and outstanding shares
of Common Stock, and once of quorum is established, action of a routine nature
may properly be taken by a majority of the shares represented in person or by
proxy at the meeting. Most major corporate transactions such as mergers,
consolidations, sales of all or substantially all assets, and certain amendments
to the Certificate of Incorporation require approval by the holders of a
majority of the issued and outstanding shares entitled to vote. The Company's
board of directors is authorized to issue shares of Common Stock without
approval of shareholders.
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission are hereby specifically
incorporated by reference into this Prospectus:
(a) The Company's annual report on Form 10-KSB for the fiscal year ended
June 30, 1997, and all amendments thereto;
(b) The Company's quarterly reports on Form 10-QSB for the quarters ended
September 30, 1997, December 31, 1997 and March 31, 1998;
(c) The Company's proxy statement filed pursuant to Section 14 of the
Exchange Act;
(d) The description of the Company's common stock which is contained in
the registration statement on Form 8-A filed on February 10, 1997,
including any amendments or reports filed for the purpose of updating
such description; and
(e) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since February 12, 1997.
In addition, all documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of the offering made by this Prospectus shall be deemed to be incorporated by
reference into this Prospectus. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus or in a supplement hereto 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 Prospectus.
INDEMNIFICATION
The Certificate of Incorporation of the Company contains provisions whereby
the Company has the power, to the maximum extent permitted by Delaware law, to
indemnify its officers and directors, or persons who act or acted at the
Company's request as a director or officer of a company of which the Company is
or was a shareholder or creditor, and their heirs and legal representatives, and
to purchase and maintain insurance for the benefit of any officers or directors
against any liability incurred in their capacity as officers or directors of the
Company.
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Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act, and is therefore
unenforceable.
LEGAL OPINIONS
Allen G. Reeves, P.C., 900 Equitable Bldg., 730 Seventeenth Street, Denver,
Colorado 80202 has rendered an opinion as to the legality of the Shares to be
issued upon exercise of the stock purchase warrants. Allen G. Reeves, sole
shareholder of the firm, is a director of the Company and owns beneficially
warrants to acquire 135,000 shares of common stock of the Company. In addition,
Mr. Reeves is entitled, pursuant to a profit sharing agreement with Mr. Gale D.
Burnett, to an annual amount equal to 1/4 of 1% of each year's net pre-tax
earnings of the Company.
EXPERTS
The financial statements of Profile Technologies, Inc. as of June 30, 1997
and for each of the years in the two-year period ended June 30, 1997, and for
the period from July 1, 1988 (inception) to June 30, 1997 have been incorporated
by reference in this prospectus and the registration statement in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT ANY INFORMATION CONTAINED HEREIN IS CORRECT AS TO ANY OF
THE TIME SUBSEQUENT TO ITS DATE. HOWEVER, THE COMPANY HAS UNDERTAKEN TO AMEND
THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART TO REFLECT ANY
FACTS OR EVENTS ARISING AFTER THE EFFECTIVE DATE THEREOF WHICH INDIVIDUALLY OR
IN THE AGGREGATE REPRESENT A FUNDAMENTAL CHANGE IN THE INFORMATION SET FORTH IN
THE REGISTRATION STATEMENT. IT IS ANTICIPATED, HOWEVER, THAT MOST UPDATED
INFORMATION WILL BE INCORPORATED HEREIN BY REFERENCE TO THE COMPANY'S REPORTS
FILED UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "DOCUMENTS INCORPORATED BY
REFERENCE."
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ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
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