AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 1999
REGISTRATION NO. 333-____
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EXIGENT INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
59-3379927
(I.R.S. Employer Identification No.)
1225 Evans Road
Melbourne, Florida 32904-2314
407-952-7550
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
Stuart P. Dawley, Esq.
Executive Vice President - General Counsel
Exigent International, Inc.
1225 Evans Road
Melbourne, Florida 32904-2314
407-952-7550
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copy to:
Laura N. Wilkinson, Esq.
Edwards & Angell, LLP
2800 BankBoston Plaza
Providence, Rhode Island 02903
401-276-6607
Approximate Date of Commencement of Proposed Sale to the Public: From time to
time after the effective date of this Registration Statement as determined by
the Selling Stockholders.
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, as amended (the "Securities Act") 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. [_]
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. [_]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Registered Amount to be Offering Price Per Aggregate Offering Registration
Registered Share (1) Price Fee
- ------------------------------------ ------------- ------------------- ----------------- -------------
<S> <C> <C> <C> <C>
Common Stock issuable upon exercise of 1,019,080 $4.3438 $4,426,680 $1,230.62
outstanding Warrants (2) (3)
Total
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act based on the average closing bid
and ask prices per share of the Registrant's Common Stock on NASDAQ on
April 1, 1999.
(2) Represents Common Stock to be issued upon exercise of outstanding common
stock purchase warrants. Pursuant to Rule 416, there are also being
registered such additional shares of Common Stock as may become issuable
pursuant to anti-dilution provisions of the warrants and an indeterminate
number of securities that may be issued, with respect to such Common Stock,
as a result of stock splits, stock dividends or similar transactions.
(3) Including rights to purchase preferred stock.
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.
<PAGE>
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL [ ], 1999
PROSPECTUS
Common Stock
1,019,080 Shares
Exigent International, Inc.
Exigent International, Inc. is offering 1,019,080 shares of its common stock
which may be issued upon exercise of your common stock purchase warrants. Each
warrant entitles you to purchase one share of Exigent's common stock for $3.00
per share. This right to purchase expires on January 30, 2000.
The warrants trade on The Chicago Stock Exchange and on the NASDAQ under the
symbol "XGNTW." Our common stock is traded on the Chicago Stock Exchange and on
the NASDAQ under the symbol "XGNT." On April 1, 1999, the closing price of our
common stock on the NASDAQ was $4.1875 per share.
An investment in Exigent's 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 4.
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.
This prospectus is included in the Registration Statement that was filed by
Exigent with the Securities and Exchange Commission. Unless their shares are
included on a previously filed and effective Registration Statement, holders of
the warrants cannot sell their common stock upon exercise of the warrants until
that Registration Statement becomes effective. This prospectus is not an offer
to sell the securities or the solicitation of an offer to buy the securities in
any state for an offer to sell or the solicitation of an offer to buy is not
permitted.
The date of this Prospectus is April [ ], 1999.
<PAGE>
OVERVIEW OF EXIGENT'S BUSINESS
Exigent is a holding company which capitalizes on emerging opportunities in
the fields of satellite command and control and telecommunications. Exigent
presently operates through its three wholly-owned subsidiaries, Software
Technology, Inc., FotoTag, Inc. and Middleware Solutions, Inc.
o Software Technology provides custom and commercial off-the-shelf
software, systems engineering and software engineering for satellite
command and control systems.
o FotoTag sells a passenger/baggage reconciliation system for use by
airlines, airports and other commercial transportation systems, such
as cruise lines and railroads.
o Middleware Solutions is developing inexpensive, high-performance
messaging software that facilitates data sharing directly between
application nodes rather than through a central server. This is useful
in remote sensor management, interactive gaming, shop-floor monitoring
and tracking, and similar "data push" technologies. Middleware
Solutions intends to distribute its products directly to the end-user
over the Internet or on computer disc through the mail.
The principal office of Exigent is located at 1225 Evans Road,
Melbourne, Florida 32904-2314, 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.
This prospectus also contains or incorporates by reference certain
forward-looking statements that involve risks and uncertainties. These
statements relate to our future plans, objectives, expectations and intentions.
These statements may be identified by the use of words such as "expects,"
anticipates," "intends," plans" and similar expressions. Our actual results
could differ materially from those discussed in these statements. Factors that
could contribute to these differences include those discussed below and
elsewhere in this prospectus or incorporated by reference herein.
Risks Related to the Company
Our major products may not be accepted by the market
Our earnings growth depends upon market acceptance of our commercial
off-the-shelf satellite telemetry, 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.
The failure of potential customers to license our products would have a
material adverse effect on our business, financial condition and results of
operations.
Our operating results may fluctuate significantly
Our operating results have fluctuated significantly in the past. We believe
that our operating results may continue to do so in the future from quarter to
quarter or on an annual basis. We incur expenses based in part upon our
expectations regarding future revenues. If we are wrong about when we receive
revenues, we may be unable to reduce spending in a timely manner if there is any
revenue shortfall. Accordingly, if our revenue declines significantly in any
period, we would likely have lower net income for that period. This could have a
material adverse effect on our business, financial condition and results of
operations. We also believe that you should not rely on past operating results
or period-to-period comparisons as an indication as to how we may perform in the
future.
We receive our revenues from a limited number of customers
We rely heavily on US government entities. We derive a substantial portion
of our total revenues from a limited number of customers. 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, our business, financial condition and results of operations may be
materially affected by changes in US government expenditures for space-related
programs.
<PAGE>
We rely upon sales to a small number of commercial customers. We also
anticipate that we will continue to rely upon sales to a small number of
commercial customers. 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 business is subject to significant fluctuations.
Many of our principal customers may also be our competitors. Many of our
customers are large aerospace prime contractors who, through one division, are
purchasing our products and services, and through another division 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 with our customer.
Defects in our products may cause our revenues to decline
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 such errors or failures in a timely manner, or 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,
a catastrophic error or failure could cause substantial damages. Errors and
failures also could cause revenues to be delayed and increase our expenses
because we would use our engineers to correct the error or failure and not to
work on new projects. Our contracts with our customers may not protect us
against these expenses or damages. In addition, we do not maintain errors and
omissions 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.
The length of our sales cycle increases our costs and hinders our ability to
procure contracts
We believe that the period of time between initial customer contact and the
sale of software to such 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 the customer will decide that it
does not want to purchase or license our product. If this occurs unexpectedly,
particularly if the potential contract is significant, our business, financial
condition and results of operations could be adversely effected.
<PAGE>
We may not be able to protect our proprietary rights; we may infringe on the
proprietary rights of other persons
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, third-party non-disclosure
agreements and other methods. 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 also may be accused of infringing or misappropriating the intellectual
property rights of other persons. In our licenses and software development and
distribution agreements with our resellers, we generally agree to indemnify
those third parties for any expenses and liabilities that they incur from these
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 other
persons, 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.
We also license certain technologies and software products from third party
developers. The agreements with these developers 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. Further, we may be accused of infringing or misappropriating the
intellectual property rights of other persons by using these licensed products.
If we are sued for possible infringement or misappropriation of the rights of
other persons, 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 a new costly royalty or
licensing agreements. 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.
We may not be able to hire qualified technical personnel; the highly competitive
market for technical personnel may increase our costs
Because our technology is highly specialized and complex, we need qualified
engineering, technical and sales personnel employees with substantial expertise.
We have had in the past, and may continue to have in the future, difficulty in
finding a sufficient number of qualified employees. We compete for such
personnel with software companies and the in-house development staffs of
satellite manufacturers and equipment vendors, many of which have greater
resources than we do. Because there is a limited number of qualified
individuals, this competition may result in higher compensation expense and an
increased turnover in technical personnel. Such turnover could also result in
the disclosure or misappropriation of our proprietary rights. If we are unable
to attract, hire, train and motivate qualified technical personnel, we may not
be able to conduct and expend our operations successfully. This may have a
material adverse effect on our business, financial condition and results of
operations.
<PAGE>
We may not be able to retain our key employees
As a small company with only 303 employees, our success depends on the
services of key employees in executive and technical positions. The loss of the
services of one or more of these employees could have a material adverse effect
on our business, financial condition and results of operations.
In addition, many of our employees have jobs which require secret, top
secret or compartmentalized security classifications. It is a challenge to hire
employees who have these security clearances, particularly because such
employees are desired by other defense contractors.
We may not be able to expand into the international market
We currently have limited operations abroad but we plan to increase our
international presence in the future. Risks that could affect our international
operations and our ability to increase our international presence include:
o fluctuations in currency exchange rates;
o complicated licensing and work permit requirements;
o variations in the protection of intellectual property rights;
o restrictions on the ability to convert currency; and
o additional expenses and risks inherent in conducting operations in
geographically distant locations, with clients speaking different
languages and having different cultural approaches to the conduct of
business.
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, 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.
We may not be successful in our acquisition strategy
We intend to continue to pursue acquisitions of companies that would
complement our existing products or enhance our technological capabilities or
that may otherwise offer growth opportunities. However, we cannot assure you
that we will be able to acquire suitable acquisition candidates on acceptable
terms or that our future acquisitions will be successful. We may incur
additional debt in connection with future acquisitions. In addition, we may
issue equity securities in connection future acquisitions which may dilute our
current stockholders. Further, we may incur amortization expense which relate to
goodwill and other intangible assets and contingent liabilities in connection
with future acquisitions. These events could have a material adverse effect on
our business, financial condition and results of operations.
<PAGE>
We have no current agreements or negotiations pending for any acquisition.
We have limited experience in completing acquisitions. The success of any
completed acquisition will depend on our ability to integrate effectively the
acquired business. We cannot assure you that we will successfully integrate the
businesses we acquire.
This process may involve risks, including:
o difficulties in assimilating operations, technologies and products;
o diversion of management's attention from other business concerns;
o entering markets in which we have limited or no prior experience;
o the potential loss of key employees of the acquired business; and
o the departure of key clients of acquired companies
Our anti-takeover provisions may hinder a potential change of control or
acquisition of us
Our Second Amended and Restated Certificate of Incorporation and By-Laws
contain certain provisions that reduce the probability of any change of control
or acquisition of Exigent. These provisions include, among others:
o the ability of our board of directors to issue blank check preferred
stock with such rights, obligations and preferences as our board of
directors may determine without any further vote or action by the
stockholders;
o provisions for a classified board of directors beginning with the
election of directors at our 1999 Annual Meeting of Stockholders; and
o provisions under which directors may only be removed by holders of at
least 60% of our common stock, with or without cause, prior to the
classification of directors, and only for cause after the
classification of directors.
In addition, In October 1998, our board of directors adopted a "poison
pill" shareholder rights plan. The effect of this plan may be to discourage 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 our stockholders. As a result, our stockholders who wish to
participate in such a transaction may not have an opportunity to do so. Under
our shareholder rights plan, preferred share purchase rights, which are attached
to our common stock, generally will be triggered upon the acquisition, or
actions that would result in the acquisition, of 15% or more of the common stock
by any person or group. If triggered, these rights would entitle our
stockholders other than the acquiror to purchase, for the exercise price, shares
of our common stock having a market value of two times the exercise price. In
addition, if a company acquires us in a merger or other business combination, or
if we sell more than 50% of our consolidated assets or earning power, these
rights will entitle our stockholders other than the acquiror to purchase, for
the exercise price, shares of the common stock of the acquiring company or its
parent having a market value of two times the exercise price. Thus, our
shareholder rights plan, if triggered, will cause substantial dilution to a
person or group that attempts to acquire us on terms not approved by the our
board of directors.
We may incur costs in excess of our revenues on certain of our contracts
In providing our services and products to our customers, we sometimes enter
into fixed price contracts. Approximately $2,327,734 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 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.
<PAGE>
In addition, we have committed under various contracts and licenses to
provide support and maintenance for certain of our products. Under these
arrangements, we must retain staff members familiar with that version of the
product to provide customer service even if it is not economical for us to do
so. In addition, during the past year, we sold our primary commercial product,
OS/COMET/TM/, to several large satellite programs and committed to support this
product over the lifetime of these programs (ten years or more). We have a
limited history of how much it will cost to support this product. If unusual
problems occur in the product beyond our expectations, the cost to correct the
problems could exceed the contract price.
We may not be able to fund our future capital requirements
We expect that our new product development and growth plans will require us
to find additional financial resources to fund these activities. 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 funding under
this line of credit or that additional debt or equity financing will be
available to meet our needs. All of our accounts receivable and equipment are
pledged as collateral for the Huntington loan and we are prohibited from
borrowing additional amounts without the approval of Huntington. If we violate
the loan documents, Huntington could declare our indebtedness to be immediately
due and payable and foreclose on the collateral.
Risks Related to the Industry
Our success is dependent on the continued growth of the space industry
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 and "broad band"
communication services 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 may not be able to respond to rapid technological changes
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
such changes could have a material adverse effect on our business, financial
condition and results of operations.
Intense competition 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. 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, 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.
<PAGE>
Changes in governmental regulation may cause us to lose revenues
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
You may not be able to exercise the warrants under state blue sky laws
You will have the right to exercise the warrants to purchase shares of our
common stock only if such 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 us at the number indicated
on page [ ] 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 of 1933. Under this rule, you will be subject to certain 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. 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 our existing shareholders
We have adopted an employee stock ownership plan, 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 give cash or issue common stock, or 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 is illiquid
Our common stock is only thinly traded on the NASDAQ SmallCap Market. Our
common stock is illiquid and should only be purchased by investors that can
afford to lose their entire investment. We cannot assure you as to the prices at
which our common stock will trade or that such prices will not be significantly
below the book value per share of the common stock. Until an orderly market
develops (if at all), the prices at which our common stock trade may fluctuate
significantly. 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 participates, and
general economic and market conditions.
<PAGE>
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 such proceeds to acquire business technologies or products
that complement our business, although we have no agreements or understandings
with respect to any such transactions. Pending such 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 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 their
expiration on 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 such 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 us at 407-952-7550 to determine whether you can exercise the
warrants in your particular state. If Exigent is unable to qualify for sale the
Common Shares underlying the Warrants in the states in which the various holders
of the Warrants then reside, a holder of the Warrants may have no choice but to
let the Warrants expire. See "Risk Factors--Risks Relating to the Offering--You
may not be able to exercise the warrants under state blue sky laws."
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 certain 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. You should contact us at 407-952-7550 if you
think you are one of our affiliates.
A holder of warrants will not have any rights or privileges as one of our
shareholders prior to exercise of such 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
after exercise.
<PAGE>
The warrants were issued pursuant to a warrant agreement between Exigent
and the warrant agent, Mid-America Bank of Louisville and Trust Company. All
descriptions of the warrants are qualified in their entirety 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 validity of the common stock to be issued upon exercise of the warrants
and certain matters relating thereto will be passed upon for Exigent by Edwards
& Angell, LLP, 250 Royal Palm Way, Suite 300, Palm Beach, Florida 33480.
EXPERTS
The financial statements of Exigent at December 31, 1998, incorporated by
reference in this Prospectus, have been audited by Ernst and Young, LLP,
Certified Public Accountants, independent auditors, as set forth in its report
thereon, which is incorporated by reference herein. The financial statements at
January 31, 1998 and 1997, incorporated by reference in this Prospectus, have
been audited by Hoyman, Dobson & Company, P.A., Certified Public Accountants,
independent auditors, as set forth in its report thereon, which is incorporated
by reference herein. The financial statements are included in reliance upon such
reports given upon the authority of such firms as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. You
may inspect and copy such reports, proxy statements and other information at the
public reference facilities maintained by the SEC at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information. Such materials also may be accessed
electronically by means of the SEC's web site at http://www.sec.gov.
We have filed a Registration Statement relating to the offering described
in this Prospectus. As allowed by SEC rules, this Prospectus does not contain
all of the information which you can find in the Registration Statement. You are
referred to the Registration Statement and the exhibits thereto for further
information. This Prospectus is qualified in its entirety by such other
information.
The SEC allows us to "incorporate by reference" information into this
Prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this Prospectus, except for
any information superseded by information in this Prospectus. This Prospectus
incorporates by reference the documents set forth below that have been
previously filed with the SEC. These documents contain important information
about our business and finances.
<PAGE>
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1998;
2. 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 such description;
3. 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 such description; and
This Prospectus also incorporates by reference additional documents that
may be filed by us with the SEC between the date of this Prospectus and the
filing of a post-effective amendment which indicates that all shares offered
have been sold or which deregisters all shares then remaining unsold. Any
statement contained in this Prospectus or in a document incorporated by
reference shall be deemed to be modified or superseded for all purposes to the
extent that a statement contained in this Prospectus or in any other document
which is also incorporated by reference modifies or supersedes such statement.
You may obtain copies of these filings (other than exhibits thereto which
are not specifically incorporated by reference herein), 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.: Executive Vice President - General Counsel
Telephone 407-952-7550
In order to ensure delivery of documents, any request therefor should be
made not later than five business days prior to deciding whether to exercise the
warrants.
You should rely only on the information contained or incorporated by
reference in this Prospectus. We have not authorized anyone to provide you with
information that is different from what is contained in this Prospectus. You
should not assume that the information contained in this Prospectus is accurate
as of any date other than the date of this Prospectus, and neither the mailing
of this Prospectus to stockholders nor the issuance of any securities hereunder
shall create any implication to the contrary. This Prospectus does not offer to
buy or sell securities in any jurisdiction where it is unlawful to do so.
<PAGE>
No dealer, sales representative or any other 1,019,080 Shares
person has been authorized to give any
information or to make any representations in
connection with this offering other than Exigent International, Inc.
those contained in this Prospectus, and, if
given or made, such information or Common Stock
representations must not be relied upon as
having been authorized by the Company or any
of the Selling Stockholders. This Prospectus
does not constitute an offer to sell, or a
solicitation of an offer to buy, any
securities other than the registered
securities to which it relates or an offer
to, or a solicitation of, any person in any
jurisdiction where such offer or solicitation
would be unlawful. Neither the delivery of ---------------------------
this prospectus nor any sale made hereunder Prospectus
shall, under any circumstances, create any
implication that there has been no change in
the affairs of the Company since the date
hereof or that the information contained
herein is correct as of any time subsequent
to the date hereof.
TABLE OF CONTENTS
Overview of Exigent's Business..............2
Risk Factors................................3
Use of Proceeds.............................7
Description of Warrants.....................7
Legal Matters...............................8
Experts.....................................8 April [], 1999
Where You Can Find More Information.........8
<PAGE>
PART II--INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
The following is a statement of estimated expenses of the issuance and
distribution of the securities being registered (other than underwriting
discounts and commissions) all of which are being paid by the Registrant:
SEC Registration Fee $1,230.62
Nasdaq listing fee **
Accountant's fees and expenses **
Legal fees and expenses. **
Miscellaneous. **
Total. $ **
o All amounts are estimates except for the SEC registration fee and
the Nasdaq listing fee.
** To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Officers and directors of the Company are covered by certain provisions of the
Delaware General Corporation Law and the Certificate of Incorporation and Bylaws
of the Company, which serve to limit, and, in certain instances, to indemnify
them against, liabilities which they may incur in such capacities. The Company's
Certificate of Incorporation limits the liability of its directors to the
Company or its shareholders (in their capacity as directors, but not in their
capacity as officers) to the fullest extent permitted by Delaware law.
Specifically, the directors of the Company will not be personally liable for
monetary damages for breach of a director's fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to the
Company or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Company's Certificate of Incorporation provides that the Company indemnify
its directors or officers, former directors or officers, and any person who may
have served at its request as a director or officer of another corporation in
which it owns shares of capital stock or of which it is a creditor against
expenses incurred by them in connection with the defense of any action in which
they are parties by reason of being or having been directors or officers of the
Company, or of such other corporation, except in relation to matters as to which
any such person is liable for negligence or misconduct in the performance of
duty.
Except in an action by or in the right of the Company, the Company's Bylaws
provide that the Company indemnify directors and officers (as well as certain
other persons) if such person acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
the conduct was unlawful. No indemnification may be made in respect of any
matter as to which such person shall have been adjudged to be liable to the
Company unless and only to the extent that the court in which such action was
brought determines upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court deems proper.
The Company's Bylaws also provide that any indemnification (unless ordered by a
court) may be made by the Company only as authorized in the specific case upon a
determination that indemnification is proper in the circumstances because such
person has met the applicable standard of conduct. Such determination must be
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, (ii) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
shareholders of the Company. To the extent, however, that an indemnified person
<PAGE>
has been successful on the merits or otherwise in defense of any action
described above, or in the defense of any matter therein, such person shall be
indemnified against expenses (including attorneys' fees) incurred in connection
therewith, without the necessity of authorization in the specific case. Expenses
incurred in defending or investigating a threatened or pending action may be
paid by the Company in advance of the final disposition of such action upon
receipt of an undertaking by such person to repay such amount if it is
ultimately determined that indemnification is not proper. The indemnification
and advancement of expenses provided by or granted pursuant to the Company's
Bylaws are not exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, contract, vote of shareholders or disinterested directors or
otherwise, it being the Company's policy that indemnification of the persons
specified in the Bylaws shall be made to the fullest extent permitted by law.
The indemnification and advancement of expenses provided by the Company's
Bylaws, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director or officer and inure to the benefit of
the heirs, executors and administrators of such person.
The Company carries directors' and officers' liability insurance.
ITEM 16. EXHIBITS.
3.1 Second Amended and Restated Certificate of Incorporation (incorporated
by reference to Exhibit 3.1 of Issuer's Quarterly Report on Form 10-Q
for the quarter ended July 31, 1998).
3.2 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2
of Issuer's Quarterly Report on Form 10-Q for the quarter ended July
31, 1998).
4.1 Form of Rights Agreement, to be executed between the Company and
Reliance Trust Company, including the Form of Certificate of
Designation of Series B Junior Participating Preferred Stock as
Exhibit A, the Form Right Certificate as Exhibit B and the Summary of
Rights to Purchase Preferred Shares as Exhibit C (incorporated by
reference to Exhibit 4.1 of Issuer's Current Report on Form 8-K dated
October 27, 1998).
4.2 Common Stock Purchase Warrant Agreement between Issuer and Warrant
Agent (incorporated by reference to Exhibit 10(ii) of Issuer's
Registration Statement on Form S-1 (No. 333-05753)).
4.3 Agreement between Issuer and Transfer Agent (incorporated by reference
to Exhibit 10(i) of Issuer's Registration Statement on Form S-1 (No.
333-05753)).
5.1* Opinion of Edwards & Angell, LLP.
23.1* Consent of Ernst & Young, LLP, Certified Public Accountants,
independent auditors.
23.2* Consent of Hoyman, Dobson & Company, P.A., Certified Public
Accountants, independent auditors.
23.3* Consent of Edwards & Angell, LLP (included in Exhibit 5.1).
24.1* Power of Attorney (See Page II-4 of Registration Statement).
*Filed herewith
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(i) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(A) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(B) 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 the 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 Securities and
Exchange Commission pursuant to Rule 424(b) under the
Securities Act of 1933 if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(C) to include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(i)(A) and (a)(i)(B) do not apply if 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 this registration statement,
(ii) that, for purposes 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 and
(iii) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
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.
<PAGE>
(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 Securities Act of 1933 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
<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 Melbourne, State of Florida on April 8, 1999.
Exigent International, Inc.
By: /s/ Bernard R. Smedley
-------------------------
Bernard R. Smedley
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints the Chairman and Chief Executive Officer, the Chief
Financial Officer, or the Secretary, or any of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities, to sign any or all amendments to this Registration Statement on Form
S-3 (including post-effective amendments), and to file the same, with all
exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming that said attorneys-in-fact and agents, or their substitute or
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 following capacities
on April 8, 1999.
Signature Title
/s/ Bernard R. Smedley Director, Chairman of the Board,
------------------------ President, Chief Executive Officer
Bernard R. Smedley and Chief Operating Officer
(Principal Executive Officer)
/s/ Jeffery B. Weinress Senior Vice President and Chief
------------------------- Financial Officer (Principal
Jeffery B. Weinress Financial and Accounting Officer)
/s/ Daniel J. Stark Director
--------------------------
Daniel J. Stark
/s/ William K. Presley Director, Executive Vice President
---------------------------- and Chief Technical Officer
William K. Presley
/s/ Robert M. Janowiak Director
----------------------------
Robert M. Janowiak
/s/ Arthur H. Collier Director
----------------------------
Arthur H. Collier
/s/ Don F. Riordan, Jr. Director
-----------------------------
Don F. Riordan, Jr.
/s/ Scott B. Helm Director
------------------------------
Scott B. Helm
<PAGE>
Exhibit 5.1
April 7, 1999
Exigent International, Inc.
1225 Evans Road
Melbourne, FL 32904-2314
Ladies and Gentlemen:
We have acted as counsel for Exigent International, Inc., a Delaware
corporation (the "Company") in connection with the registration of 1,019,080
shares (the "Shares") of Common Stock, $.01 par value (the "Common Stock") which
may be issued upon exercise of outstanding common stock purchase warrants.
In connection with this opinion, we have examined the Registration
Statement on Form S-3 which will be filed with the Securities and Exchange
Commission ("SEC") pursuant to the rules and regulations promulgated under the
Securities Act of 1933 on or about April 7, 1999, (the "Registration
Statement"), relating to the above-mentioned registration. In addition, we have
examined such corporate records, certificates and other documents, and reviewed
such questions of law, as we have deemed necessary or advisable in order to
enable us to render the opinion contained herein. All capitalized terms used
herein, unless otherwise specified, shall have the meanings assigned to them in
the Registration Statement.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to unsigned documents of all documents submitted
to us as certified or photostatic copies, and the authenticity of the originals
of such latter documents.
We assume that the appropriate action will be taken, prior to the offer and
sale of the Shares, to register and qualify the Shares for sale under all
appropriate State "Blue Sky" and securities laws.
Based upon the foregoing, we are of the opinion that the Shares of Common
Stock, when issued and delivered upon the exercise of, and in accordance with
the terms of, the Warrants, including full payment to the Company of the
applicable exercise price of the Warrants, will be legally issued, fully paid
and non-assessable.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the use of our name under the caption "Legal Matters" in the
Prospectus constituting a part of the Registration Statement. In giving such
consent, we do not admit that we come within the category of persons whose
consent is required by Section 7 of the Act or the rules and regulations
promulgated thereunder.
Very truly yours,
/s/ Edwards & Angell, LLP
----------------------------------
EDWARDS & ANGELL, LLP
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "experts" in the
Registration Statement on Form S-3 and related Prospectus of Exigent
International, Inc. for the registration of 1,019,080 shares of its common stock
and to the incorporation by reference therein of our report dated March 12,
1999, with respect to the consolidated financial statements of Exigent
International, Inc. included in its Annual Report (Form 10-K) for the eleven
months ended December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
------------------------------
ERNST & YOUNG LLP
Orlando, Florida
April 6, 1999
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "experts" in the
Registration Statement on Form S-3 and related Prospectus of Exigent
International, Inc. for the registration of 1,019,080 shares of its common stock
and to the incorporation by reference therein of our report dated April 4, 1998,
with respect to the consolidated financial statements of Exigent International,
Inc. included in its Annual Report (Form 10-K) for each of the years ended
January 31, 1997 and 1998, filed with the Securities and Exchange Commission.
/s/ Hoyman, Dobson & Company, P.A.
-----------------------------------
HOYMAN, DOBSON & COMPANY, P.A.
Melbourne, Florida
April 6, 1999
