FILED PURSUANT TO RULE 424(b)(1)
Registration No. 333-75903
PROSPECTUS
Common Stock
1,019,080 Shares
EXIGENT INTERNATIONAL, INC.
We are offering 1,019,080 shares of our common stock which may be issued upon
exercise of your common stock purchase warrants. Each warrant entitles you to
purchase one share of our common stock for $3.00 per share. This right to
purchase expires on January 30, 2000.
The warrants trade on The Chicago Stock Exchange under the symbol "XNTW" and on
the NASDAQ SmallCap Market under the symbol "XGNTW." Our common stock is traded
on the Chicago Stock Exchange under the symbol "XNT" and on the NASDAQ SmallCap
Market under the symbol "XGNT." On June 8, 1999, the closing price of our common
stock on the NASDAQ SmallCap Market was $4.125 per share.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. THE SHARES
SHOULD ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD A COMPLETE LOSS. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
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.
The date of this prospectus is June 25, 1999.
<PAGE>
OVERVIEW OF OUR BUSINESS
We are a holding company which capitalizes on emerging opportunities in the
fields of satellite command and control and telecommunications. We operate
exclusively through our three wholly-owned subsidiaries, Software Technology,
Inc., FotoTag, Inc. and Middleware Solutions, Inc. However, since FotoTag and
Middleware Solutions are not currently generating meaningful revenue from their
products, substantially all of Exigent's revenue is derived from the operations
of Software Technology.
o Software Technology provides custom software, commercially available
software, and engineering services for satellite command and control
systems. These software products and engineering services enable our
customers to test, locate and operate satellites from the ground and to
manage the equipment in their satellite control centers. Software
Technology provides a group of products, including its base product,
OS/COMET. OS/COMET provides tools for developing and operating satellite
command and control systems. In addition, an increasing part of this
business is providing "information technology" services to our customers
which means that we support or manage their hardware and software operating
requirements. Software Technology has both government and commercial
customers, which accounted for 79% and 21%, respectively, of Software
Technology's revenues for the year ended December 31, 1998.
o FotoTag, Inc. sells a passenger/baggage reconciliation system for use by
airlines, airports and other commercial transportation systems, such as
cruise lines and railroads. The FotoTag(R) system consists of a proprietary
software application developed by FotoTag and other commercially available
hardware components.
o Middleware Solutions is a start-up company. It is developing inexpensive,
high-performance messaging software that facilitates the sharing of data.
Middleware is currently offering customers the opportunity to use
"InterplayTM Software" free of charge on a trial basis. Interplay, the
first product developed by Middleware, is for use by developers of various
software applications. During the trial period, we hope to receive valuable
feedback from users so that we can make a decision on whether we should
commercially sell this software. Middleware is also developing other
software products that will be marketed to developers of software
applications. Middleware is not currently receiving revenue from its
products.
Our principal office is located at 1225 Evans Road, Melbourne, Florida
32904-2314. Our telephone number (407) 952-7550.
<PAGE>
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks and uncertainties described below and the other
information in this prospectus before deciding whether to exercise the warrants
and invest in shares of our common stock. If any of the following risks actually
occur, our business, financial condition or results of operations could be
materially adversely affected. This could cause the trading price of our common
stock to decline, and you may lose part or all of your investment.
Risks Related to the Company
The failure of the market to accept our key products may result in reduced
revenue and capital available for future product development.
Our earnings growth depends upon market acceptance of our commercial
off-the-shelf satellite command and control software products, including our
base product, OS/COMET and related products. Because the space industry
historically has used customized software solutions, we cannot assure you that
our potential customers will be interested in licensing these products. Whether
potential customers will license our software depends on several factors,
including:
o how well our products perform;
o how well our products can be integrated into our customers' existing
technologies; and
o whether our customers can achieve cost savings and become more efficient by
using our software.
We incur expenses, such as product development, based in part upon our
expectations regarding future revenues. Accordingly, the failure of potential
customers to license these key products will likely necessitate a reduction in
product development and marketing expenditures which, in turn, would have a
material adverse effect on our business, financial condition and results of
operations.
The existence or sufficiency of customer funding for our contracts may cause our
quarterly results to fluctuate and adversely affect our stock price.
We expect that our quarterly operating results for Software Technology will
fluctuate significantly for many reasons, including:
o uncertainty as to whether or when our commercial satellite communications
or government customers will receive the funding necessary to license or
purchase our products;
o uncertainty as to whether or when our defense agency or defense contractor
customers will receive sufficient funding; and
o potential termination of our government contracts by our defense contractor
customers for "no cause".
Software Technology often continues to perform under contracts in anticipation
of customer funding, even though there may be no formal or official assurance of
eventual funding for the contract. In addition, many of our costs and operating
expenses are fixed and, therefore, cannot be reduced if customer funding is
delayed. As a result, if our revenue declines significantly in any period, we
would likely have lower net income for that period.
If our operating results in one or more quarters do not meet securities
analysts' or investors' expectations, the price of our common stock could be
materially adversely affected.
<PAGE>
Since we rely heavily on US government entities for a substantial portion of our
revenues, our financial results may be materially adversely affected by a
decrease in US government expenditures for space-related programs.
We derive a substantial portion of our total revenues from US government
entities involved in space-related programs. Sales to US government entities,
excluding government contractors, represented in total approximately 42.0%,
45.36% and 59.3% of our total revenues for the 12 months ended January 31, 1997
and 1998 and the fiscal year ended December 31, 1998, respectively. As a result
of this reliance on US government entities for a significant percentage of our
revenues, our business, financial condition and results of operations may be
materially adversely affected by any decrease in US government expenditures for
space-related programs.
Since we rely on a small number of customers for a large portion of our
commercial revenue, the loss of one or more of these major customers could have
a material adverse effect on our financial results.
A few major customers account for a significant percentage of our commercial, or
non-government, revenue. We cannot assure you that these customers will continue
to purchase products from us at current revenue levels, if at all. If we lose
one or more of these major customers or one of these customers fails to place an
order when anticipated, our business, financial condition and results of
operations could be adversely affected. As a result of this customer
concentration, our operating results are subject to significant fluctuations.
Customers may discontinue purchases from us as a result of pressure from other
divisions within their organization which compete against us.
Many of our customers are large aerospace prime contractors who, through one
division, are purchasing our products and services, and through another division
within their organization, may be marketing competing products or services.
Because we are frequently a subcontractor, the competing division may attempt to
influence or change the purchasing decisions of our customer, resulting in our
customer discontinuing its purchases of our products and services and
terminating its business relationship with us. If these business relationships
are terminated, our sales of core products would decrease, resulting in cash
shortfalls and requiring additional marketing and product development expenses
to replace the lost revenue.
Since our products are used in high cost production and operation of satellites,
the amount of damages for which we may be liable due to defects in our products
may be significant
Our software may contain errors because it is so complex. We cannot assure you
that we will find all errors in our products, or if we find errors, that we will
be able to correct them in a timely manner, if at all. If our products contain
errors or failures, we could lose potential customers, the market acceptance of
our products could be delayed, our service and warranty costs could increase, or
we could be forced to pay damages. Further, because our products are used in
high cost production and operation of satellites, and because many companies,
governments and individuals depend on those satellites, the costs and damages
suffered by the customer and possibly other parties as a result of the errors
can be very high. The errors or failures could cause substantial damages,
including the loss of use of a system or the complete loss of a satellite. In
addition to potential liability to third parties, errors and failures also could
cause delayed revenues and increased expenses because we would need to use our
engineers to correct the error or failure instead of working on new projects.
Our contracts with our customers may not protect us against these expenses or
damages. In addition, we do not maintain insurance to cover liability from our
errors and failures. All of these events could have a material adverse effect on
our business, financial condition or results of operations.
<PAGE>
The length of our sales cycle increases our costs and increases the risk that we
may not ultimately procure contracts
We believe that the period of time between initial customer contact and the sale
of software to the customer is typically six to 12 months, and sometimes as long
as 24 months. The reason for this is that a potential customer will conduct
extensive and lengthy tests before deciding whether to purchase or license our
product. While the customer is making this decision, our sales and marketing
expenses will be significant. In addition, during this time period, there is a
risk that space missions or projects will be cut back or terminated, that
customer budgets will be reduced or that other conditions will arise which will
cause the customer to decide that it does not want to purchase or license our
product. Therefore, the risk associated with our lengthy sales cycle is that we
may expend substantial time and resources over the course of the sales cycle
only to realize no revenue from our efforts as a result of the customer's
decision not to purchase from us. The difficulty in predicting when our
customers will receive funding or if our commercially available products will be
accepted by the customer hinders our ability to forecast when a customer will
award us with a contract. Since our revenues are tied to particular projects,
any delays in receiving contracts, particularly if the potential contract is
significant, will have an adverse effect on our business, financial condition
and results of operations.
We may incur substantial legal expenses and diversion of our technical and
management personnel in protecting our proprietary rights against infringement
by others.
Our success and ability to compete are dependent, in large part, upon our
proprietary rights. To protect those rights, we rely primarily on a combination
of copyrights, trade secret laws, trademarks, patents, employee confidentiality,
non-competition and invention assignment agreements, and third-party
non-disclosure agreements. The steps taken by us may not be adequate and third
parties may infringe or misappropriate our copyrights, patents and other
proprietary rights. In addition, effective trademark, patent, copyright and
trade secret protection may not be available in every country in which our
products will be sold or licensed. We may be forced to bring a lawsuit to
enforce our rights, which could result in substantial costs and take time and
attention away from our business.
We may incur substantial legal and indemnification expenses if we are accused of
infringing or misappropriating the proprietary rights of others.
We may be accused of infringing or misappropriating the intellectual property
rights of others. In our licenses and software development and distribution
agreements, we generally agree to indemnify our resellers for any expenses and
liabilities they incur from claims of infringement or misappropriation. The
amount of our indemnity obligation may be greater than the revenues we receive
under the contract. If we are sued for possible infringement or misappropriation
of the rights of others, even if the claims are not valid, the lawsuit could
result in substantial costs, take time and attention away from our business,
cause us to delay shipments of products or require us to enter into costly
royalty or licensing agreements. If a royalty or licensing agreement is
required, and we cannot enter into a satisfactory agreement, our business,
financial condition and results of operations could be adversely affected.
Our revenues could decrease if we are unable to license technology and software
required to produce our products and deliver our services.
We also license various technologies and software products from third party
developers. These license agreements are generally non-exclusive and may be
terminated at any time by either party upon written notice. If the developers
terminate these agreements, develop other products that compete with our
products or provide their products and expertise to our competitors, our
business, financial condition or results of operations could be adversely
affected. If a new royalty or licensing agreement is required, and we cannot
enter into a satisfactory agreement, our business, financial condition and
results of operations could be adversely affected.
<PAGE>
Competition for and failure to hire qualified technical personnel may result in
higher costs and lower revenue.
We bid for and accept contracts that require us to deliver highly specialized
and complex solutions, products and services. In order to provide our customers
with the solutions they require, we need qualified engineering, technical and
sales personnel with substantial expertise in the fields of software engineering
and computer engineering. In addition to these skills, it is helpful if our
personnel have defense-related experience or expertise in the field of space
communications. Often, a further requirement will be for our personnel to
receive a security clearance from the US Government. Our experience indicates
that the demand is greater than the available qualified employees in the market.
We have had in the past, and may continue to have in the future, difficulty in
finding a sufficient number of qualified employees. We have been unable to meet
the qualifications for bidding on several jobs because of our insufficient
number of qualified personnel with security clearances. While our inability to
hire a sufficient number of qualified personnel with security clearances has not
materially affected our financial results in the past, it may have a material
impact in the future. This failure to hire and retain qualified technical
personnel may in the future prohibit us from bidding for and accepting, or being
selected for, a contract or job. Because there is a limited number of qualified
individuals, this competition may result in higher compensation expense and an
increased turnover in technical personnel. This turnover could also result in
the disclosure or misappropriation of our proprietary rights. We compete for
qualified personnel with software companies and the in-house development staffs
of satellite manufacturers and equipment vendors. Many of these competitors have
greater resources than we do. If we are unable to attract, hire, train, motivate
and retain qualified technical personnel, we may not be able to conduct and
expand our operations successfully. This may have a material adverse effect on
our business, financial condition and results of operations.
We may incur unexpected costs in connection with correcting Year 2000 problems.
Many existing computer programs use only two digits to identify a year in the
date field. These programs were designed and developed without consideration of
the impact of the upcoming change in century. If not corrected, many computer
applications could fail or create erroneous results at or before the year 2000.
We have tested our products and determined that our OS/COMET versions 3.5 and
higher and all of our other products are year 2000 compliant. However, if we are
wrong, and our products are not year 2000 compliant, we may be faced with the
loss of contracts or delay in market acceptance of our products and services,
disputes with customers, or increased maintenance and support costs to correct
any problem or payment of damages. These unexpected problems could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Our anti-takeover provisions may discourage a third party from acquiring your
shares at a favorable price.
Our second amended and restated certificate of incorporation, by-laws and
shareholder rights plan contain some provisions that reduce the probability of
any change of control or acquisition of Exigent. A list of some of the
provisions and the risk to you associated with each is set forth below:
Provision Risk to You
The ability of our board of directors This allows our board of directors to
to issue blank check preferred stock issue, without your approval, preferred
with rights, obligations and prefer- stock with dividend, liquidation, con-
ences as our board of directors may version or other rights which may dimin-
determine without further vote or ish or take priority over your rights as
action by the stockholders. a holder of common stock, and reduce the
probability of a change of control or
acquisition which, if consummated, would
likely result in an offer to purchase
your shares at an above-market price.
Provisions for a classified board of This makes it more difficult for a
directors beginning with the election potential acquirer to gain majority
of directors at our 1999 annual control of our board of directors at a
meeting of stockholders. single shareholders meeting so as to
allow for a takeover which, if consum-
mated, would likely result in an offer
purchase your shares at an above-market
price.
Provisions under which directors may This makes it more difficult and expen-
only be removed by holders of at least sive for a potential acquirer to gain
60% of our common stock, with or with- control of our board of directors so as
out cause, prior to the classification to allow for a takeover which, if con-
of directors. summated, would likely result in an
offer to purchase your shares at an
above-market price.
Provisions in the shareholder rights If triggered, the issuance of shares at
plan under which existing shareholders a substantial discount would dilute the
are allowed to purchase our shares at value of any shares acquired by the
a substantial discount from the market party attempting the takeover, thus dis-
price in the event of at takeover couraging a takeover attempt which, if
attempt not supported by our board of consummated, would likely result in an
directors. offer to purchase your shares at an
above-market price.
Each of the provisions listed above has the general effect of making it more
difficult for another party to effect an unfriendly takeover or other coercive
acquisition of our shares not supported by our board of directors by increasing
the cost of a takeover or otherwise discouraging the party attempting the
takeover. Any one of these provisions may have the effect of discouraging a
third party from making a proposal to acquire us which our board of directors
has not solicited or does not approve, even if the acquisition would be
beneficial to you. As a result, if you wish to participate in this type of a
favorable transaction you may not have an opportunity to do so.
If we fail to estimate accurately our actual costs for fixed price contracts, we
may incur losses on these contracts.
In providing our services and products to our customers, we sometimes enter into
fixed price contracts. Approximately 8% of the revenues from our current
contracts were derived from fixed price contracts. A fixed price contract is one
where we commit to deliver software that meets specific requirements for a fixed
price that is negotiated prior to development. The fixed price is based on
engineering estimates with suitable margins to accommodate reasonable
contingencies. The actual cost to develop the software may exceed the fixed
price we receive because we miscalculated the time needed to develop the program
or we experienced unexpected programming difficulties. Even if that happens, we
must complete the contract and incur whatever losses result. These losses would
have an adverse effect on our profitability.
If we are unable to obtain additional financial resources we may not be able to
implement our product development and growth plans.
We believe that our existing capital resources will be sufficient to fund the
company through the next 12 months. However, we expect that our new product
development and growth plans will require us to find additional financial
resources to fund these activities beyond the next 12 months. Although we
recently completed a transaction to increase our line of credit with Huntington
National Bank, we cannot assure you that we will be able to obtain sufficient
additional funding from this lender. We cannot assure you that additional debt
financing will be available to meet our needs since we are prohibited from
borrowing additional amounts without the approval of Huntington. We cannot
assure you that additional equity financing will be available to us.
Default on loan agreements may accelerate loan repayments, causing a cash
shortfall.
All of our accounts receivable and equipment are pledged as collateral for the
Huntington loan. If we violate the Huntington loan documents, Huntington could
declare our indebtedness to be immediately due and payable. If we are forced to
repay the full amount of the Huntington loan before maturity, we may not have
sufficient cash following the payoff to conduct product development and
otherwise implement our plans for growing our business. If we are unable to
repay the entire amount of the Huntington loan, Huntington will be entitled to
foreclose on the collateral, rendering the equipment unavailable for our
business operations.
Risks Related to the Industry
Because most of our customers are engaged in the space industry, our financial
results and stock price could be materially adversely affected if this industry
does not continue to grow.
Since our customers are concentrated in the space industry, our success will
depend on the continued growth in the market for software solutions for that
industry. The space industry has grown rapidly in the past few years because
technological advancements have led to lower launch and satellite production
costs and risks and the demand for advanced wireless communication services,
including applications for voice, video and data, has expanded rapidly. If that
market does not continue to grow, the demand for our products will decrease,
which may have a material adverse effect on our business, financial condition
and results of operations. Because the space industry is changing rapidly, we
cannot predict the industry's potential size or future growth rate. We also
cannot predict the future needs for satellite command software and related
services.
We operate in an industry with rapidly-changing technology. If we fail to adapt
to technological changes within the industry our products may become obsolete or
unmarketable, which could have a material adverse effect on our financial
results.
Our business is subject to rapid technological changes, changing industry
standards, changes in customer requirements and the frequent introduction of new
products, services and enhancements. These changes may make our products
obsolete or unmarketable. In addition, our customers may make changes to their
systems that are not compatible with our technologies or products. Our failure
to develop new products, product enhancements or related services to respond to
these changes could have a material adverse effect on our business, financial
condition and results of operations.
Intense competition for limited number of customers may cause us to lose
projects or result in decreased revenues.
We operate in the highly competitive market providing software solutions for the
space industry. In this industry, we compete for a limited number of potential
customers in the sale of our key products and services. As a result, the
competition among participants in our industry is intense since we and our
competitors are pursuing a small number of customers. In addition to
intensifying the competition, the limited number of customers for our key
products and services also makes it more difficult for us to replace those
customers or projects which are lost to a competitor. We compete primarily with
in-house development staffs of satellite manufacturers and equipment vendors,
third party contractors and a small group of other space-oriented software
providers and systems integrators. Many of our competitors have longer operating
histories, greater name recognition, larger or captive customer bases and
significantly greater resources. In order to remain competitive and minimize our
exposure and risk relating to competition, we will need to continue to develop
and introduce, on a timely and cost-effective basis, new products and features
that meet the changing needs of our customers. Our competitors may be able to
respond more quickly to new technologies and the changing needs of customers. If
we are not able to compete effectively, we may have to reduce our prices,
receive fewer customer orders and lose market share, any of which could have a
material adverse effect on our business, financial condition and results of
operations.
Our customers in the satellite and telecommunications industry are subject to
significant US and foreign government regulation. Changes in these regulations
may make our products or services unsuitable for a customer's needs or otherwise
decrease demand for our products or services.
While our operations are not directly regulated, our customers are subject to a
variety of United States and foreign government regulations. Increased
regulation could affect our business by reducing the number of customers to
which we can sell our product or otherwise adversely affecting the satellite and
telecommunications industries. Recent deregulation in the telecommunications
industry could also affect our business by allowing more competitors and
permitting consolidation of existing companies. This consolidation could reduce
our customer base, force us to lower prices, decrease demand for our products,
increase our costs or otherwise have a material adverse effect on our business,
financial condition and results of operations. We are still investigating recent
changes in export control regulations to determine the effect those changes will
have on our ability to market, sell and license products and services in
international markets.
Risks Related to the Offering
Your warrants may lose value if the sale of the underlying shares is not
qualified under state law.
You will have the right to exercise the warrants to purchase shares of our
common stock only if the shares qualify for sale or are exempt from
qualification under state securities or "blue sky" laws of the state in which
you then reside. We intend to use our reasonable efforts to qualify the common
stock for sale in each state so as to permit exercise of the warrants, but there
can be no assurance that we will be able to do so. The warrants may lose some or
all of their value if the underlying shares are not, or cannot be, qualified in
an applicable state. You should contact us at the number indicated on page 2 to
determine whether you can exercise the warrants.
If you are one of our affiliates, you can sell the shares of common stock once
you exercise the warrants only if you comply with Rule 144 of the Securities
Act. Under this rule, you will be subject to volume limitations and requirements
relating to manner of sale, notice and availability of current public
information about us. "Affiliate" is defined under the Securities Act as a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, an issuer, and
in our case, would include our directors, executive officers and major
stockholders. You should contact us at the number indicated on page 2 if you
think you are one of our affiliates.
Future issuances to our ESOP may dilute your holdings.
We have adopted the Software Technology, Inc. restated employee stock ownership
plan and trust. This ESOP currently owns 1,669,536 shares of our common stock,
257,702 of our class A preferred shares and 714 warrants. Under the governing
instrument of the ESOP, the board of directors, in its sole discretion, may
cause us to issue common stock to the ESOP, for the benefit of our employees.
Any future issuance of our common stock to the ESOP will result in dilution to
our shareholders.
Our common stock has been thinly traded and the price may not be stable.
Our common stock has been thinly traded on the NASDAQ SmallCap Market.
Therefore, you may not be able to sell the shares you receive upon exercise of
the warrants in the quantities and at the time you wish to sell. We cannot
assure you as to the prices of our common stock or that the prices will not
decline. Prices for the common stock will be determined in the marketplace and
may be influenced by many factors, including the depth and liquidity of the
market, investor perception of us and the industry in which we participate, and
general economic and market conditions. Therefore, our common stock should only
be purchased by investors who can afford to lose their entire investment.
Statements contained in this prospectus that are not historical facts are
forward-looking statements made under the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. In addition, words such as "believes,"
"anticipates," "expects" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements involve known and
unknown risks, uncertainties, and other factors which may cause our actual
results, performance or achievements or events, or timing of events, relating to
us to differ materially from our actual results, performance or achievements or
actual events, or timing of events, relating to us expressed or implied by the
forward- looking statements. The major known risks and uncertainties relating to
our business are identified in this prospectus.
USE OF PROCEEDS
The net proceeds to us from the exercise of the warrants are estimated to be
approximately $3,057,240 assuming all the warrants are exercised. We expect to
use the proceeds from this offering for sales and marketing activities, research
and development activities, general corporate purposes and working capital. We
may use the proceeds to acquire business technologies or products that
complement our business, although we have no agreements or understandings with
respect to any transactions. Pending these uses, we intend to invest the net
proceeds of this offering in short-term, investment-grade, interest-bearing
instruments.
DESCRIPTION OF THE WARRANTS
We have issued and outstanding 1,019,080 warrants. Each warrant entitles the
holder to purchase one share of our common stock. The warrants may be exercised
at any time through their expiration on January 30, 2000 at an exercise price of
$3.00 per share, subject to adjustment. To exercise, a holder must surrender the
warrant to the warrant agent identified below with the subscription form in the
warrant properly completed and executed, together with payment of the exercise
price. No fractional shares of our common stock will be issued in connection
with the exercise of the warrants. We have no right to call the warrants.
If a holder of warrants fails to exercise the warrants prior to January 30,
2000, the warrants will expire and the holder will have no further rights with
respect to the warrants. You will have the right to exercise the warrants to
purchase shares of our common stock only if the shares qualify for sale or are
exempt from qualification under state securities or "blue sky" laws of the
states in which you then reside. We intend to use our reasonable efforts to
qualify the common stock for sale in each state so as to permit your exercise of
the warrants, but there can be no assurance that we will be able to do so. The
warrants may lose some or all of their value if the underlying shares are not,
or cannot be, qualified in an applicable state. You should contact our Chief
Financial Officer or General Counsel at 407-952-7550 to determine whether you
can exercise the warrants in your particular state. If we are unable to qualify
the common shares underlying the warrants in the state in which a holder of the
warrants then resides, that holder may have no choice but to let the warrants
expire. See "Risk Factors-- Risks Relating to the Offering--Your warrants may
lose value if the sale of the underlying shares is not qualified under state
law."
If you are one of our affiliates, you can sell the shares of common stock once
you exercise the warrants only if you comply with Rule 144 of the Securities Act
of 1933. Under this rule, you will be subject to volume limitations and
requirements relating to manner of sale, notice and availability of current
public information about us. "Affiliate" is defined under the Securities Act of
1933 as a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
an issuer, and in our case, would include our directors, executive officers and
major stockholders. If you think you are one of our affiliates you should
contact our Chief Financial Officer or General Counsel at 407-952-7550 before
selling any of the shares you acquire upon exercising your warrants.
A holder of warrants will not have any rights or privileges as one of our
shareholders prior to exercise of the warrants. We will keep available a
sufficient number of shares of authorized common stock to permit exercise of the
warrants.
The exercise price of the warrants and the number of shares issuable upon
exercise of the warrants will be subject to adjustment in the event of stock
dividends, stock splits, combinations, reorganizations, subdivisions and
reclassifications. No assurance can be given that the market price of our common
stock will exceed the exercise price at any time during the term of the
warrants.
The warrants were issued pursuant to a warrant agreement between us and the
warrant agent, Mid-America Bank of Louisville and Trust Company. All
descriptions of the warrants are qualified by reference to the warrant agreement
which is included as an exhibit to the registration statement of which this
prospectus is a part.
LEGAL MATTERS
The legality of the common stock to be issued upon exercise of the warrants as
well as the adequacy of the payment for the common stock and the legality of
future assessments against the common stock has been passed upon for us by
Edwards & Angell, LLP, 250 Royal Palm Way, Suite 300, Palm Beach, Florida 33480.
EXPERTS
Ernst & Young LLP, independent certified public accountants, have audited our
consolidated financial statements in our annual report on form 10-K for the
eleven months ended December 31, 1998, as set forth in their report, which is
incorporated by reference into this prospectus and elsewhere in the registration
statement. Our financial statements are incorporated by reference in reliance
upon Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.
Hoyman, Dobson & Company, P.A., independent certified public accountants, have
audited our consolidated financial statements included in our annual report on
form 10-K for each of the two years in the period ended January 31, 1998, as set
forth in their report, which is incorporated by reference into this prospectus
and elsewhere in the registration statement. Our financial statements are
incorporated by reference in reliance upon Hoyman, Dobson & Company, P.A.'s
report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, DC, New York City and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public from
our web site at www.xgnt.com or at the SEC's web site at www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information filed with the SEC will
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our offering is
completed.
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1998;
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
3. The description of our capital stock contained in our registration
statement on Form 8-A filed on October 21, 1997 and any amendment or report
filed for the purposes of updating that description; and
4. The description of our rights to purchase preferred stock contained in
our registration statement on Form 8-A filed on November 4, 1998 and any
amendment or report filed for the purpose of updating that description.
You may request copies of these filings at no cost, by writing or telephoning us
at the following address and telephone number:
Exigent International, Inc.,
1225 Evans Road
Melbourne, Florida 32904-2314
Attn.: General Counsel
Telephone 407-952-7550
<PAGE>
You should rely only on the information incorporated by reference or provided in
this prospectus. We have authorized no one to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of this
document.
No dealer, sales representative or any
other person has been authorized to give
any information or to make any represent- 1,019,080 Shares
ations in connection with this offering
other than those contained in this pros- Exigent International, Inc.
pectus, and, if given or made, the infor-
mation or representations must not be relied Common Stock
upon as having been authorized by the company.
This prospectus does not constitute an offer ----------------
to sell, or a solicitation of an offer to buy,
any securities other than the registered Prospectus
securities to which it relates or an offer to,
or a solicitation of, any person in any juris-
diction where the offer or solicitation would June 25, 1999
be unlawful. Neither the delivery of this pros-
pectus nor any sale made under this prospectus
shall, under any circumstances, create any
implication that there has been no change in the
affairs of the company since the date of this
prospectus or that the information contained in
this prospectus is correct as of any time subsequent
to the date of this prospectus.
TABLE OF CONTENTS
Overview of Exigent's Business 2
Risk Factors 3
Use of Proceeds 10
Description of Warrants 10
Legal Matters 11
Experts 11
Where You Can Find More Information 11
