<PAGE>
As filed with the Securities and Exchange Commission on February 10, 1998
Registration No. 333-35249
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
AMENDMENT NO. 3
TO
FORM S-1
ON
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
PROSOFTTRAINING.COM
(Exact Name of Registrant as Specified in Its Charter)
3001 Bee Caves Road, Suite 100
Austin, Texas 78746
(512) 328-6140
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Executive Offices)
Nevada 8243 87-0448639
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
JERRELL M. BAIRD
Chief Executive Officer
ProsoftTraining.com
3001 Bee Caves Road, Suite 100
Austin, Texas 78746
(512) 328-6140
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
____________________
Copy to:
William L. Twomey
Hewitt & McGuire, LLP
19900 MacArthur Boulevard, Suite 1050
Irvine, California 92612
____________________
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
____________________
If only the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an Offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same Offering. [_]
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. [_]
Pursuant to Rule 429 of the Securities Act of 1933, the Prospectus contained
herein is a combined Prospectus relating to securities registered hereby and
under Registration Statement No. 333-11247 and Registration Statement No. 333-
28993.
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 become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
================================================================================
<PAGE>
================================================================================
____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Each Class Amount Maximum Maximum Amount of
of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share(1) Offering Price(1) Fee(2)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.001 per share(3) 491,473 $3.75 $1,843,024 $513
===============================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(c) on the basis of the last trade price of
the Company's Common Stock on February 3, 1999, as reported by the NASDAQ
SmallCap Market.
(2) This registration fee relates to an increase of 491,473 shares in the
number of securities being registered by this pre-effective amendment. A
filing fee of $6,458 was previously paid with the initial filing of this
Registration Statement registering 1,894,258 shares. Additional filing fees
of $3,042 and $2,606 were previously paid with amendments to this
Registration Statement registering an additional 902,305 and 3,719,496
shares, respectively.
(3) An additional 3,387,291 shares of Common Stock to be sold by stockholders
(including 379,747 shares issuable upon exercise of outstanding Common
Stock purchase warrants) have been registered under an earlier Registration
Statement on Form S-1 (File No. 333-11247, filing fee paid $22,192.75)
which was initially declared effective by the Securities and Exchange
Commission ("SEC") on November 27, 1996, and an additional 595,664 shares
of Common Stock to be sold by stockholders have been registered under
another Registration Statement on Form S-1 (File No. 333-28993, filing fee
paid $1,174) which was initially declared effective by the SEC on July 2,
1997. Both of these Registration Statements are being amended by filing of
this Registration Statement pursuant to Rule 429. Accordingly, all three
Registration Statements use the Prospectus that is a part of this
Registration Statement.
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 become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
================================================================================
<PAGE>
8,348,532 Shares
PROSOFTTRAINING.COM
Common Stock
Shares of common stock of ProsoftTraining.com are being offered for resale
by certain of our stockholders by this Prospectus. The Shares being offered
include 4,348,810 presently outstanding shares, 1,993,472 shares which are
issuable upon exercise of outstanding common stock purchase warrants and
2,006,250 shares which are issuable upon conversion of outstanding convertible
promissory notes. The Shares will be sold from time to time by the Selling
Stockholders named in this Prospectus through public or private transactions, on
or off the Nasdaq SmallCap Market, at prevailing market prices, or at privately
negotiated prices. We will not receive any of the proceeds from the sale of the
Shares, other than the exercise price of any common stock purchase warrants
which are exercised.
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"POSO." The closing bid price of the Common Stock was $_________ on
______________, 1999.
______________________________
Investing in the Common Stock Involves a High Degree of Risk. You Should
Purchase Shares Only if You 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 passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
Prospectus dated _____________, 1999
1
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission (the "SEC"). The Prospectus relates to
8,348,532 shares (the "Shares") of our common stock ("Common Stock") which the
selling stockholders named in this Prospectus (the "Selling Stockholders") may
sell from time to time. We will not receive any of the proceeds from such
sales.
The Shares have not been registered under the securities laws of any state
or other jurisdiction as of the date of this Prospectus. Brokers or dealers
should confirm the existence and exemption from registration or effectuate such
registration in connection with any offer and sale of the Shares.
TABLE OF CONTENTS
PAGE
----
Risk Factors.............................................................. 3
Where You Can Find More Information....................................... 6
Forward-Looking Statements................................................ 8
About ProsoftTraining.com................................................. 8
The Offering.............................................................. 9
Use of Proceeds........................................................... 9
Selling Stockholders...................................................... 10
Plan of Distribution...................................................... 13
Legal Matters............................................................. 15
Experts................................................................... 15
2
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, TOGETHER WITH THE OTHER
INFORMATION IN THIS PROSPECTUS, BEFORE BUYING ANY SHARES. YOU SHOULD ALSO BE
AWARE OF CERTAIN STATEMENTS CONTAINED IN THIS PROSPECTUS THAT DO NOT RELATE TO
HISTORICAL RESULTS OR FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS, SUCH AS STATEMENTS OF OUR STRATEGIES, PLANS, OBJECTIVES,
EXPECTATIONS AND INTENTIONS, INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS.
Expectation of Continuing Losses
However, we expect to continue incurring losses on a quarterly basis
through at least the second quarter of our fiscal year ending July 31, 1999. We
have incurred net losses of approximately $40 million from our inception in
December 5, 1995 through July 31, 1998. For the year ended July 31, 1998, we
incurred a net loss of $16,525,123. Our ability to generate significant revenues
in the future is subject to uncertainty. In order to achieve profitability, we
must increase our revenues. We can not assure you that we will be able to
increase revenues or achieve profitability.
Uncertainty of Future Capital Requirements
Since our inception, we have been dependent on outside financing to fund
our operations and growth. We began realizing increasing revenues in late fiscal
1998 due to our sales reorganization and refocusing efforts. This shift in our
business strategy should result in a reduction in overhead expenses and, if
revenues continue to grow as demonstrated in fiscal 1998, we hope to reach
quarterly profitability in the second half of fiscal 1999. We believe that our
existing resources will be sufficient to meet our needs for working capital
expenditures through at least fiscal 1999. However, if we do not achieve
profitability and generate positive cash flow as anticipated, our ability to
continue as a going concern will be jeopardized unless additional outside
financing can be obtained.
Uncertainty of Future Funding
If we do not achieve profitability and generate positive cash flow as
anticipated, we may need additional outside financing. Even if we do achieve
profitability and positive cash flow, we may need outside financing to fund
further growth of our business. We do not know at this time when we may need
additional funds, and we cannot be certain that if we do need additional funds
in the future that we will be able to obtain them on terms satisfactory to us,
if at all. If we are unable to raise additional funds when necessary, we may
have to reduce planned capital expenditures, scale back our operations or growth
or enter into financing arrangements on terms which we would not otherwise
accept.
Intense Competition in Training Market
We face substantial competition in the training market. Competition in the
Internet/intranet training market is intense, rapidly changing and affected by
the rapidly evolving nature of the Internet/intranet industry. A number of
other companies offer products and services similar to ours, and additional new
competitors may emerge in the near future. Many of our existing competitors
have substantially greater capital resources, technical expertise, marketing
experience, research and development status, established customers and
facilities than we do. As a result, there is a risk that we
3
<PAGE>
will not be able to successfully compete with existing and future competitors
which would adversely affect our financial performance.
Need to Respond to Rapid Technological Changes
In our industry, technology advances rapidly and industry standards change
frequently. To remain competitive and achieve profitability, we must
continually enhance our existing products and services and promptly introduce
new products, services and technologies to meet the changing demands of our
customers. Our failure to respond to technological changes quickly will
adversely affect our financial performance.
Effect of Market Overhang on Stock Price
Future sales of our Common Stock could depress the market price of our
Common Stock. In addition, the perception that such sales will occur could also
adversely effect the price. Under this Prospectus, the selling stockholders may
sell up to 8,348,532 shares (or approximately 47.8% of the shares of Common
Stock currently outstanding). Any such sales, or even the market perception
that such sales could be made, may depress the price of the Common Stock.
Volatility of Stock Price
Our Common Stock has experienced substantial price volatility and such
volatility may continue to occur in the future. Additionally, the stock market
from time to time experiences significant price and volume fluctuations that are
unrelated to the operating performance of particular companies. These broad
market fluctuations may also adversely effect the market price of our Common
Stock. In addition to such broad market fluctuations, factors such as the
following may have a significant effect on the market price of our Common Stock:
. Fluctuations in our operating results.
. The perception by others of our ability to obtain any necessary new
financing.
. Limited trading market for our Common Stock.
. Announcements of new ventures or products and services by us or our
competitors.
No Foreseeable Dividends
We have never paid cash dividends and we do not anticipate paying any cash
dividends in the foreseeable future. We intend to retain future earnings for
reinvestment in our business. Any future determination to pay cash dividends
will be at the discretion of our Board of Directors and will be dependent upon
our financial condition, results of operations, capital requirements and such
other factors as the Board of Directors deems relevant.
4
<PAGE>
Year 2000 Issue Risks
Many existing computer systems and applications, and other control devices,
use only two digits to identify a year in the date field, without considering
the impact of the upcoming change in the century. As a result, such systems and
applications could fail or create erroneous results unless corrected so that
they can process data related to the year 2000. We rely on our systems,
applications and devices, including financial systems, registration systems,
embedded computer chips, networks and telecommunications equipment.
We have completed our Year 2000 assessment and determined our financial
system needed to be updated at an expected cost of less than $3,000. We expect
the update to be completed in fiscal 1999. We have received assurances from our
other software vendors that their systems are Year 2000 compliant. In addition,
we have conducted an inventory, review and assessment of our personal computers,
networks and servers and desktop software applications to determine whether they
support Year 2000 date codes and we believe that all are Year 2000 compliant. In
the event of an unexpected failure in one of our systems, our employees would be
able to continue operations on a manual basis until such systems have been
restored to full operating capacity. We estimate that the total cost of our Year
2000 compliance will not be significant.
We have contacted our key vendors and service suppliers to determine the
extent to which we are vulnerable to their failure to address the Year 2000
problem. We have received verbal assurances from these key suppliers that their
systems are Year 2000 compliant. Although we do not believe our operations will
be significantly disrupted even if third parties with whom we have relationships
are not Year 2000 compliant, we cannot guarantee that any Year 2000 compliance
problems of our suppliers will not negatively affect our financial performance.
If our key suppliers are unable to provide us sufficient quantities of materials
or goods as a result of their failure to be Year 2000 compliant, we believe that
we can obtain adequate supplies of materials and goods at comparable prices from
other sources. Because uncertainty exists concerning the potential costs and
effects associated with any Year 2000 compliance, we intend to continue to make
efforts to ensure that third parties with whom we have relationships are Year
2000 compliant.
The Year 2000 problem could also have an effect on our customers. If
customers delay or forego purchasing our products based upon Year 2000 related
issues, it could affect our operating results. Based upon our evaluation of our
current information, we do not believe such an occurrence is likely. However, we
cannot control the Year 2000 readiness of third parties and such a risk is
possible.
Impact of Certain Anti-Takeover Provisions On Market Value of Stock
Our Bylaws contain certain provisions that may discourage other persons
from attempting to acquire control of us. These provisions include, but are not
limited to:
. A staggered Board of Directors.
. The elimination of the right of stockholders to act by written consent
without a meeting, except unanimously.
. The establishment of advance notice requirements for director
nominations and actions to be taken at annual meetings.
Such provisions, as well as the provisions of Section 203 of the
Delaware General Corporation Law (to which we are subject), could impede a
merger, consolidation, takeover or other business combination involving us or
discourage a potential acquiror from making a tender offer or otherwise
attempting to take control of us. In certain circumstances, the fact that
corporate devices are in place that will inhibit or discourage takeover attempts
could reduce the market value of our Common Stock.
5
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires us to file information with the SEC
concerning our business and operations. We file annual, quarterly and special
reports, proxy statements and other information with the SEC. You can read and
copy these documents at the public reference facility maintained by the SEC at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You
can also copy and inspect such reports, proxy statements and other information
at the following regional offices of the SEC:
New York Regional Office Chicago Regional Office
7 World Trade Center Citicorp Center
Suite 1300 500 West Madison Street
New York, NY 10048 Suite 1400
Chicago, IL 60661
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 on the SEC's
web site at http://www.sec.gov. You can also inspect our reports, proxy
-------------------
statements and other information at the offices of the Nasdaq Stock Market.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information that we incorporate by
reference is considered to be part of this Prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below (File No.
000-21535) 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:
. Annual Report on Form 10-K/A for the fiscal year ended July 31, 1998
(including information specifically incorporated by reference into our
Form 10-K from our Proxy Statement for our 1998 Annual Meeting of
Stockholders);
. Quarterly Report on Form 10-Q for the quarter ended October 31, 1998
. The description of our Common Stock contained in the Registration
Statement on Form 8-A dated October 11, 1996.
This Prospectus is part of three Registration Statements we filed with the
SEC (Nos. 333-11247, 333-28993 and 333-35249). You may request a free copy of
any of the above filings by writing or calling:
Investor Relations
ProsoftTraining.com
2333 North Broadway, Suite 300
Santa Ana, California 92706
(714) 953-1200, ext. 375
6
<PAGE>
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement to this Prospectus. We have not
authorized anyone else to provide you with different information. The Selling
Stockholders should not make an offer of these Shares in any state where the
offer is not permitted. You should not assume that the information in this
Prospectus or any supplement to this Prospectus is accurate as of any date other
than the date on the cover page of this Prospectus or any supplement.
7
<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus, including the documents incorporated by reference in this
Prospectus, contain forward-looking statements which reflected our views at the
time the documents were filed regarding future events and financial performance.
These forward-looking statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from historical results or
the results we expected at the time of filing. The words "believe," "expect,"
"anticipate" and similar expressions identify forward-looking statements, which
speak only as of the dates on which they were made. We undertake no obligation
to publicly update or revise any forward-looking statements, whether it is as
a result of new information, future events or otherwise. You should not unduly
rely on these forward-looking statements.
ABOUT PROSOFTTRAINING.COM
We provide comprehensive Internet skills training courses, Internet skills
certification programs and instructors to teach the training courses and
certification. We offer more than 50 instructor-led Internet skills courses
ranging from 1-day end-user workshops to 10-day certification programs. Our
Certified Internet Webmaster Program creates the professional skills required to
develop and implement e-business solutions in the Internet age. Our
certification testing program is administered worldwide by testing leader Sylvan
Prometric. We also sell our courseware to Authorized Training Center Resellers.
We originally incorporated in Nevada in March 1985 as Tel-Fed, Inc. Our
business was initially operated as a sole proprietorship (the "Proprietorship")
beginning in February 1995. In December 1995, ProSoft Development Corp., a
California corporation ("Old ProSoft") was incorporated and acquired the
business from the Proprietorship effective January 1, 1996. In March 1996, we
entered into a reorganization (the "Reorganization") with Old ProSoft and the
Old ProSoft shareholders. In the Reorganization, we issued shares of our Common
Stock to the Old ProSoft shareholders in exchange for their shares of Old
ProSoft and changed our name to ProSoft Development, Inc. As a result, Old
ProSoft became our wholly-owned subsidiary. From our incorporation until the
Reorganization, we had no significant operations. We changed our name to Prosoft
I-Net Solutions, Inc. in October 1996 and to prosofttraining.com in January
1999.
Under applicable accounting rules, for financial statement purposes, we are
required to account for the Reorganization as an acquisition of us by Old
ProSoft, with the additional shares held by our prior shareholders reflected as
a recapitalization of Old ProSoft. As a result, the consolidated financial
statements incorporated by reference in this Prospectus for ProsoftTraining.com
reflect, for the period prior to the Reorganization, the operations of Old
ProSoft. Financial statements of the Proprietorship are also incorporated by
reference herein. Our executive offices are located at 3001 Bee Caves Road,
Suite 100, Austin, Texas 78746, and our telephone number is (512) 328-6140.
8
<PAGE>
THE OFFERING
Common Stock Offered by the Selling
Stockholders........................ 8,348,532 shares(1)
Common Stock to be outstanding after
this Offering....................... 17,471,037 shares(1)(2)
Use of Proceeds..................... Other than the exercise price of the
common stock purchase warrants
("Warrants") which are exercisable, we
will receive none of the proceeds from the
sale of shares by the Selling
Stockholders. We would receive gross
proceeds of approximately $3,000,000 if
all of the Warrants are exercised. Any
proceeds we receive will be utilized for
working capital and general corporate
purposes.
NASDAQ SmallCap Symbol.............. POSO
____________________
(1) Includes 1,993,472 shares issuable upon exercise of the Warrants and
2,006,250 shares issuable upon conversion of outstanding convertible
promissory notes.
(2) Does not include 2,333,027 shares reserved for issuance upon the exercise
of outstanding stock options.
USE OF PROCEEDS
Other than the exercise price of such of the Warrants as may be exercised,
we will not receive any proceeds from the sale of Shares by the Selling
Stockholders. Holders of the Warrants are not obligated to exercise their
Warrants, and there can be no assurance that they will choose to exercise all or
any of their Warrants. The gross proceeds to us in the event that all of the
Warrants are exercised would be approximately $3,000,000. Proceeds we receive,
if any, will be utilized for working capital and general corporate purposes.
9
<PAGE>
SELLING STOCKHOLDERS
All of the Shares offered by this Prospectus are being offered by the
Selling Stockholders for their own respective accounts. Substantially all of the
Selling Stockholders purchased their Shares in private placement investments in
us or Old Prosoft which we believe were exempt from the registration
requirements of federal securities law under the Regulation D private placement
exemption. The following table sets forth certain information as of February 1,
1999 with respect to the Selling Stockholders:
<TABLE>
<CAPTION>
Shares Shares Shares
Name of Selling Stockholder Beneficially Owned Covered Beneficially Owned
- -------------------------------------------------------- Prior to By after the
Offering Prospectus Offering(1)
-------- ---------- -----------
<S> <C> <C> <C>
AGAPE International Center of Truth 4,000 4,000 0
Anderson, Erik T. 6,188 6,188 0
Baco, Raymundo C. 8,840 8,840 0
Baird, Jerrell M. (2) 245,500 112,500 133,000(3)
Betlem Service Corporation 9,524 9,524 0
Brown, David H. 70,000 70,000 0
Bussell, Mark 55,000 55,000 0
Bustin & Co. 12,750 12,750 0
Cahill, John 150,000 50,000 100,000(3)
Calamitous L.C. 15,000 15,000 0
Charles Schwab and Company
FBO Matthew Linsey 56,250 56,250 0
Clark Fork Medical Associates, P.C. 401(K)
Profit Sharing Plan 2,000 2,000 0
Clark Fork Medical Assn. Trust 22,500 22,500 0
Common Sense Partners 14,286 14,286 0
Corbin, Brooks A.(4) 168,708(5) 2,333 166,375(3)
Cranshire Capital, L.P. 328,869 328,869 0
D'Ambrosio, Louis J. 56,250 56,250 0
Davis, Anne T. 5,378 5,378 0
Davis, Gart D. 161,888 161,888 0
DiSanto, Frank J. 57,142 57,142 0
DLJSC FBO Franklin Coffey 40,000 40,000 0
Dorton, David 15,000 15,000 0
Dowling, Benjamin 300 300 0
Eagle Growth Limited Partnership 225,000 225,000 0
Ebbets Field International, Ltd. 281,250 281,250 0
EGS Securities 6,666 6,666 0
F&S Partnership 25,000 25,000 0
Fidelity Management Trust Co. FBO
Donald Holcomb IRA 50,000 50,000 0
Fidelity Management Trust Co. FBO
John Ryan IRA 25,000 25,000 0
Fidelity Management Trust Co. FBO
David I. Perl IRA(6) 41,249 10,000 31,249(3)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Shares Shares Shares
Name of Selling Stockholder Beneficially Owned Covered Beneficially Owned
- -------------------------------------------------------- Prior to By after the
Offering Prospectus Offering(1)
-------- ---------- -----------
<S> <C> <C> <C>
Fliege, James Ritchie 28,125 28,125 0
Franklin, William I. 109,250 109,250 0
Fuller, J. William (7) 25,641 25,641 0
Fuller, Joyce 25,000 25,000 0
General Electric Pension Trust, Trustees 408,164 408,164 0
Geren, Preston M. III, Trustee 106,250 106,250 0
Gladstein, Gary 56,250 56,250 0
Glenn E. White Trust 19,048 19,048 0
Gramm, Colton 28,125 28,125 0
Hartman, Douglas 760,921 75,000 685,921(8)
Investor Contacts Ltd. 80,666 80,666 0
JMB/FEB Partners 10,417 10,417 0
J.M. Bryan Family Trust 10,416 10,416 0
Judkins, Bary 5,000 5,000
Ketcher, Frederick 56,250 56,250 0
Keyway Investments Limited 76,200 76,200 0
Khaled, Michael E. 234,800(5) 25,000 209,800(9)
King, Bradley J. 6,188 6,188 0
Kopor, Betsy 500 500 0
Korn, Jeffrey G. (10) 78,000 20,000 58,000(3)
Luntz, Jerry 2,770 2,051 713(3)
MacNamara, John 150,000 50,000 100,000(3)
McDivitt, Kathleen 6,188 6,188 0
Mock, David 130,700(5) 130,700 0
Montesi, Terry 84,375 84,375 0
Morgan Guaranty Trust Company of New York, as 214,744 214,744 0
Investment Manager for the Alfred F. Sloan
Foundation (Multi-Market Account) (11)
Morgan Guaranty Trust Company of New York, as 214,744 214,744 0
Trustee of the Multi-Market Special Investment Trust
Fund of Morgan Guaranty Trust Company of
New York (11)
Morgan Guaranty Trust Company of New York, as 1,040,959 1,040,959 0
Trustee of the Commingled Pension Trust Fund
(Multi-Market Special Investment Fund II) of Morgan
Guaranty Trust Company of New York (11)
Morgan Guaranty Trust Company of New York, as 605,297 605,297 0
Trustee of the Commingled Pension Trust Fund
(Multi-Market Special Investment Fund 1) of Morgan
Guaranty Trust Company of New York (11)
Morning Star Partners 8,333 8,333 0
Olafson, Gregory 100,000(5) 55,000 45,000(3)
Pabrai, Tina Malkai 279,896 279,896 0
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares Shares Shares
Name of Selling Stockholder Beneficially Owned Covered Beneficially Owned
- -------------------------------------------------------- Prior to By after the
Offering Prospectus Offering(1)
-------- ---------- -----------
<S> <C> <C> <C>
Pabrai, Uday Om(12) 459,860 459,860 0
PAL Employer Services, Inc. 8,000 8,000 0
Peninsula Fund L.P. 202,083 202,083 0
Peterson, Melvin D. 5,000 5,000 0
Quota Rabbico N.V.-Shapiro 168,750 168,750 0
Redmond, Richard & Diana 20,000 20,000 0
Richardson, Eric W. (13) 140,166(5) 2,666 137,500(3)
Richardson, William E. (14) 123,750(5) 25,000 98,750(3)
Ropar LLC 30,000 30,000 0
Rosen, Harvey 85,000 85,000 0
Rousseau, Darren A. 2,620 2,620 0
Ruenitz & Associates 28,125 28,125 0
Schmidt Family Trust 20,000 20,000 0
Service Master Company Limited Partnership 142,857 142,857 0
Service Master Venture Fund, LLC 562,500 562,500 0
Shapiro, Steven 22,500 22,500 0
Siegfried & Jenson 401K Plan
FBO Michael R. Richman 5,000 5,000 0
Siegfried & Jenson 401K Plan
FBO Ned Siegfried 10,000 10,000 0
Siegel, Richard 28,125 28,125
Stallman, Andrew (15) 131,834 15,000 116,834(3)
Suleiman, Anver 10,978 8,126 2,852(3)
Suleiman, John 5,892 4,364 1,528(3)
Travelers Indemnity Co. 285,714 285,714 0
Trimble, Kelly 148,450(5) 56,250 92,200(3)
Turnbow Investment Co. L.C. 5,625 5,625 0
Turnbow, Lynn 191,250 191,250 0
Vanderhoof, Clark D. 10,000 10,000 0
Vanderhoof, Michael D. 324,490(5) 127,500 196,990(16)
VanZandt, Glorida 22,500 22,500 0
Whittal Company Limited 19,100 19,100 0
Williams, David R. 10,000 10,000 0
Wilson, D. Ross 10,000 10,000 0
WWW Internet Fund 162,500 162,500 0
---------- ---------- ----------
10,525,344(17) 8,348,532(18) 2,176,712
========== ========== ==========
</TABLE>
____________________
(1) Assumes that each Selling Stockholder sells all of the Shares to which
this Prospectus relates.
12
<PAGE>
(2) Mr. Baird is Chairman of the Board and Chief Executive Officer of the
Company.
(3) Represents less than 1% of our shares after this offering.
(4) Mr. Corbin is a former officer of the Company.
(5) These Selling Stockholders have agreed generally not to sell, under this
Prospectus, more than 1% of their respective Shares held as of November
27, 1996 for each month that elapses after that date unless our consent is
obtained.
(6) Mr. Perl is Chief Operating Officer of the Company.
(7) Mr. Fuller is a Director of the Company.
(8) Represents 3.9% of our shares after this offering.
(9) Represents 1.2% of our shares after this offering.
(10) Mr. Korn is a Director of the Company.
(11) J.P. Morgan & Co., Incorporated is the ultimate parent of the trustee of
each of these stockholders.
(12) Mr. Pabrai is Vice Chairman and Chief Technology Officer of the Company.
(13) Mr. Eric Richardson is a former officer of the Company.
(14) Mr. William Richardson is a former member of the Board of Directors of the
Company.
(15) Mr. Stallman is a Director of the Company.
(16) Represents 1.1% of our shares after this offering.
(17) Includes 571,458 shares subject to currently exercisable options,
1,993,472 shares subject to currently exercisable warrants and 2,006,250
shares issuable upon conversion of promissory notes of the Company.
(18) Includes 1,993,472 shares subject to currently exercisable warrants and
2,006,250 shares issuable upon conversion of promissory notes of the
Company.
PLAN OF DISTRIBUTION
We are registering the Shares on behalf of the Selling Stockholders. As
used in this Prospectus, the term "Selling Stockholder" includes donees and
pledgees selling Shares received from a named Selling Stockholder after the date
of this Prospectus. All costs, expenses and fees in connection with the
registration of the Shares offered hereby will be borne by us. The Selling
Stockholders will pay any brokerage commissions or similar selling expenses
attributable to the sale of the Shares. The Selling Stockholders may effect
sales of Shares from time to time in one or more types of transactions (which
may include block transactions) on the Nasdaq SmallCap Market, in negotiated
transactions, through put or call options transactions relating to the Shares,
through short sales of Shares, or a combination of such methods of sale, at
market prices prevailing at the time of sale, or at negotiated prices. These
transactions may involve brokers or dealers.
The Selling Stockholders may effect such transactions by selling Shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The Selling Stockholders and any broker-dealers that act in connection
with the sale of Shares might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act of 1933 (the "Securities Act"), and any
commissions received by such broker-dealers and any profit on
13
<PAGE>
the resale of the Shares sold by them while acting as principals might be deemed
to be underwriting discounts or commissions under the Securities Act. We have
agreed to indemnify each Selling Stockholder against certain liabilities,
including liabilities arising under the Securities Act. The Selling Stockholders
may agree to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the Shares against certain liabilities,
including liabilities arising under the Securities Act.
The Selling Stockholders will be subject to the prospectus delivery
requirements of the Securities Act because they may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act. We
have informed the Selling Stockholders that the anti-manipulative provisions of
Regulation M promulgated under the Securities Exchange Act of 1934 may apply to
their sales in the market.
Selling Stockholders also may resell all or a portion of the Shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
Upon notification to us by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
Prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealers, (ii) the number of Shares involved, (iii) the
price at which such Shares were sold, (iv) the commissions paid or discounts or
concessions allowed to such broker-dealers, where applicable, (v) that such
broker-dealers did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus and (vi) other facts
material to the transaction. In addition, upon notification to us by a Selling
Stockholder that a donee or pledgee intends to sell more than 500 Shares, a
supplement to this Prospectus will be filed.
14
<PAGE>
LEGAL MATTERS
Eric W. Richardson, our former General Counsel, has passed upon the
validity of the issuance of the Shares offered hereby. As of February 1, 1999,
Mr. Richardson beneficially owned 153,166 shares of our Common Stock.
EXPERTS
The consolidated financial statements of the Company as of July 31, 1998,
and for the year ended July 31, 1998, appearing in our Annual Report on Form
10-K for the year ended July 31, 1998, have been audited by Grant Thornton, LLP,
Independent Auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements as of July 31, 1997, and for the year ended July 31, 1997
and the period from December 8, 1995 (date of incorporation) to July 31, 1996,
included in our Annual Report on Form 10-K for the year ended July 31, 1998, as
set forth in their report, which is incorporated in this prospectus by
reference. Our consolidated financial statements are incorporated by reference
in reliance on their report, given on their authority as experts in accounting
and auditing.
The financial statements of Professional Development Institute as of
December 31, 1995, and for the period from February 1, 1995 (date of inception)
to December 31, 1995, appearing in our Annual Report on Form 10-K for the year
ended July 31, 1998, have been audited by Kelly & Company, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered. All of the amounts
shown are estimates, except the Securities and Exchange Commission registration
and NASDAQ filing fees.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 9,500
Accounting fees and expenses.................................... $ 14,500
Blue sky fees and expenses (including counsel fees)............. $ 2,000
Other legal fees and legal expenses............................. $ 20,000
Miscellaneous expenses.......................................... $ 1,000
----------
Total........................................................ $ 47,000
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Nevada Private Corporation Law ("NPCL") provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party,
by reason of the fact that such person was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to (x) any action or suit by or in the right
of the corporation against expenses, including amounts paid in settlement and
attorneys' fees, actually and reasonably incurred, in connection with the
defense or settlement believed to be in, or not opposed to, the best interests
of the corporation, except that indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a court of
competent jurisdiction to be liable to the corporation or for amounts paid in
settlement to the corporation and (y) any other action or suit or proceeding
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement, actually and reasonably incurred, if he or she acted in good
faith and in a manner which he or she reasonably believed to be in, or not
opposed to, reasonable cause to believe his or her conduct was unlawful. To the
extent that a director, officer, employee or agent has been "successful on the
merits or otherwise" the corporation must indemnify such person. The articles
of incorporation or bylaws may provide that the expenses of officers and
directors incurred in defending any such action must be paid as incurred and in
advance of the final disposition of such action. The NPCL also permits the
corporation to purchase and maintain insurance on behalf of the corporation's
directors and officers against any liability arising out of their status as
such, whether or not the corporation would have the power to indemnify him
against such liability. These provisions may be sufficiently broad to indemnify
such persons for liabilities arising under the Securities Act.
II-1
<PAGE>
The Company's Restated Articles of Incorporation provide that the Company
shall indemnify any director or officer of the Company in connection with
certain actions, suits or proceedings, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred. The Company is also required to pay any expenses incurred by a
director or officer in defending the Company or its stockholders for damages for
breach of fiduciary duty as a director or officer, provided that such a
provision must not eliminate or limit the liability of a director or officer
for: (a) acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law; or (b) the payment of illegal distributions. The
Company's Restated Articles of Incorporation include a provision eliminating the
personal liability of directors for breach of fiduciary duty except that such
provision will not eliminate or limit any liability which may not be so
eliminated or limited under applicable law.
The Company's Bylaws generally require the Company to indemnify, as well as
to advance expenses, to its directors and its officers to the fullest extent
permitted by Nevada Law upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it should be ultimately determined
that they are not entitled to indemnification by the Company. The Company has
also entered into indemnification agreements with its directors and officers
which similarly provide for the indemnification and advancement of expenses by
the Company.
The Company maintains liability insurance for its directors and officers
covering, subject to certain exceptions, any actual or alleged negligent act,
error, omission, misstatement, misleading statement, neglect or breach of duty
by such directors or officers, individually or collectively, in the discharge of
their duties in their capacity as directors or officers of the Company.
Item 16. Exhibits and Financial Statement Schedules.
(a) Index of Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits
- ------- ---------------------------------------------------------------------
<C> <S>
2 Agreement and Plan of Reorganization dated March 26, 1996 between the
Company, Pro-Soft Development Corp. and the shareholders of Pro-Soft
Development Corp. Filed as Exhibit 2 to the Company's Registration
Statement on Form S-1 (No. 333-11247) ("Registration Statement No.
333-11247") and incorporated herein by reference.*
3.1 Restated Articles of Incorporation of the Company, as amended.
3.2 Amended and Restated Bylaws of the Company. Filed as Exhibit 3.2 to
Registration Statement No. 333-11247 and incorporated herein by
reference.*
4 Specimen Stock Certificate. Filed as Exhibit 4 to Registration
Statement No. 333-11247 and incorporated herein by reference.*
5 Opinion of Eric W. Richardson.*
</TABLE>
II-2
<PAGE>
Exhibit
No. Description of Exhibits
- -------- ----------------------------------------------------------------------
10.1 Pro-Soft Development Corp. 1996 Stock Option Plan. Filed as Exhibit
10.1 to Registration Statement No. 333-11247 and incorporated herein
by reference.*
10.2 Prosoft I-Net Solutions, Inc. Amended 1996 Stock Option Plan. Filed
as Exhibit 10.2 to Registration Statement No. 333-11247 and
incorporated herein by reference.*
10.3 Stock and Warrant Purchase Agreement dated April 15, 1996 by and
among the Company, Donald L. Danks, Keith D. Freadhoff, Douglas
Hartman and various investors. Filed as Exhibit 10.3 to Registration
Statement No. 333-11247 and incorporated herein by reference.*
10.4 Form of Registration and Lock-Up Agreement dated September __, 1996
between the Company and certain of the Selling Stockholders. Filed as
Exhibit 10.5 to Registration Statement No. 333-11247 and incorporated
herein by reference.*
10.5 Form of Indemnification Agreement between the Company and its
Directors and Officers. Filed as Exhibit 10.13 to Registration
Statement No. 333-11247 and incorporated herein by reference.*
10.6 Office Building Lease dated as of December 16, 1996 between COSCAN
California Limited Partnership and the Company. Filed as Exhibit 10
to the Company's Report on Form 10-Q for the quarter ended January
31, 1997 and incorporated herein by reference.*
10.7 Form of Subscription Agreement, entered into in February through
April 1997, between the Company and various investors. Filed as
Exhibit 10.16 to Registration Statement No. 333-11247 and
incorporated herein by reference.*
10.8 Registration Rights Agreement dated as of March 13, 1997 among the
Company and various investors. Filed as Exhibit 10.17 to Registration
Statement No. 333-11247 and incorporated herein by reference.*
10.9 Subscription Agreement between the Company and General Electric
Pension Trust dated April 4, 1997. Filed as Exhibit 10.18 to
Registration Statement No. 333-11247 and incorporated herein by
reference.*
10.10 Escrow Agreement among the Company, General Electric Pension Trust
and State Street Bank and Trust dated April 4, 1997. Filed as Exhibit
10.19 to Registration Statement No. 333-11247 and incorporated herein
by reference.*
10.11 Secured Promissory Note dated April 9, 1997 in favor of the Company.
Filed as Exhibit 10.20 to Registration Statement No. 333-11247 and
incorporated herein by reference.*
10.12 Form of Subscription Agreement, entered into in November 1997 between
the Company and various investors.*
II-3
<PAGE>
Exhibit
No. Description of Exhibits
- ------- ----------------------------------------------------------------------
10.13 Registration Rights Agreement dated as of November 12, 1997 among the
Company and various investors.*
10.14 Stock Purchase Agreement dated as of January 1, 1998 by and between
the Company and Uday O. Pabrai with respect to all outstanding
capital stock of Net Guru Technologies, Inc. Filed as Exhibit 2.1 to
the Company's Current Report on Form 8-K dated January 1, 1998 and
incorporated herein by reference.*
10.15 Employment Agreement dated January 1, 1998 between the Company and
Uday O. Pabrai. Filed as Exhibit 10.1 to the Company's Current Report
on Form 8-K dated January 1, 1998 and incorporated herein by
reference.*
10.16 Promissory Note dated June 18, 1998, made by Uday Pabrai in favor of
the Company. Filed as Exhibit 10.16 to the Company's Annual Report on
Form 10-K for the year ending July 31, 1998 and incorporated herein
by reference.*
10.17 Consulting Agreement dated April 30, 1998, between Investment
Transaction, LLC and the Company. Filed as Exhibit 10.17 to the
Company's Annual Report on Form 10-K for the year ending July 31,
1998 and incorporated herein by reference.*
10.18 Form of Stock Purchase Agreement dated as of November 18, 1998 by and
among the Company and various investors.*
10.19 Note and Warrant Purchase Agreement dated as of December 2, 1998 by
and among the Company and various investors.*
10.20 Registration Rights Agreement dated as of December 2, 1998 among the
Company and various investors.*
21 Subsidiaries of the Company. Filed as Exhibit 21 to the Company's
Annual Report on Form 10-K for the year ending July 31, 1998 and
incorporated herein by reference.*
23.1 Consent of Grant Thornton LLP, Independent Auditors
23.2 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Kelly & Co., Independent Auditors
23.4 Consent of Eric W. Richardson (included in the opinion filed as
Exhibit 5).*
24 Power of Attorney (included on signature page).
_______________
* Previously filed
II-4
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually, or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum Offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) (230.424(b) of this Chapter) if, in the
aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate Offering price
set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the Offering of such securities at
that time shall be deemed to be the initial bona fide Offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Offering.
Insofar as indemnification for liabilities arising from the Securities Act
of 1933 (the "Act") may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to
II-5
<PAGE>
a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Austin, State of Texas on
the 9th day of February, 1999.
PROSOFTTRAINING.COM
By: /s/ Jerrell M. Baird
---------------------------------------
Jerrell M. Baird,
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Kimberly
V. Johnston and Jerrell M. Baird his true and lawful attorney-in-fact and agent,
acting alone, with full powers of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
(including Registration Statements Nos. 333-11247 and 333-28993 which are
amended hereby), any amendments thereto and any Registration Statement for the
same offering which is effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, each acting alone,
full powers 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 to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all said attorney-in-fact and agent, acting alone, or his 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 Amendment
to Registration Statement has been signed below by the following persons on
behalf of the Company in the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Jerrell M. Baird Chief Executive Officer and February 9, 1999
- ----------------------------- Chairman of the Board
Jerrell M. Baird (Principal Executive Officer)
/s/ Uday O. Pabrai Vice Chairman and Director February 9, 1999
- -----------------------------
Uday O. Pabrai
II-6
<PAGE>
/s/ Kimberly V. Johnston Chief Financial Officer February 9, 1999
- ----------------------------- (Principal Financial and
Kimberly V. Johnston Accounting Officer)
/s/ J William Fuller Director February 9, 1999
- -----------------------------
J William Fuller
/s/ Richard J. Groeneweg Director February 9, 1999
- -----------------------------
Richard J. Groeneweg
/s/ Jeffrey G. Korn Director February 9, 1999
- -----------------------------
Jeffrey G. Korn
/s/ Charles McCusker Director February 9, 1999
- -----------------------------
Charles McCusker
/s/ Andrew Stallman Director February 9, 1999
- -----------------------------
Andrew Stallman
II-7
<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PROSOFT DEVELOPMENT, INC.
ProSoft Development, Inc., a corporation organized under the laws of the
State of Nevada on May 14, 1985, hereby amends and restates its Articles of
Incorporation pursuant to the provisions of Nevada Revised Statutes Sections
78.385, 78.390 and 78.403.
1. The Articles of Incorporation of the Corporation are hereby amended and
restated as follows:
ARTICLE I
NAME
The name of the Corporation is ProSoft Development, Inc.
ARTICLE II
RESIDENT AGENT
The name and address of the Corporation's resident agent is James, Driggs &
Walch, 3763 Howard Hughes Parkway, Suite 350, Las Vegas, Nevada 89109.
ARTICLE III
PURPOSE AND POWERS
The purpose for which the Company is organized is to engage in any lawful
activity except banking and insurance operations.
ARTICLE IV
AUTHORIZED CAPITAL
The Corporation shall have the authority to issue a total of 50,000,000
shares of capital stock having a par value of $.001 per share. All shares of
capital stock of the Corporation shall be of the same class and shall have the
same rights and preferences.
ARTICLE V
BOARD OF DIRECTORS
The members of the governing board of the Corporation shall be styled
directors. The board of directors consists of three (3) directors, and the
names and addresses of the persons currently serving as the directors until the
next annual meeting of shareholders, or until their successors are elected and
qualified, are:
<PAGE>
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Donald L. Danks 7100 Knott Avenue, Buena Park, CA 90620
Keith D. Freadhoff 7100 Knott Avenue, Buena Park, CA 90620
William E. Richardson 7100 Knott Avenue, Buena Park, CA 90620
</TABLE>
The number of directors may be increased or decreased from time to time in
the manner provided in the Bylaws of the Corporation.
ARTICLE VI
INDEMNIFICATION
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative,
including an action by or in the right of the Corporation, by reason of the fact
that he or she is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such action, suit, or proceeding if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
ARTICLE VII
LIMITATION OF OFFICER AND DIRECTOR LIABILITY
No officer or director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as an officer or director; provided, however, that this Article VII shall
not eliminate or limit the liability of an officer or director to the extent
provided by applicable law for: (A) acts or omissions that involve intentional
misconduct, fraud, or a knowing violation of law; or (B) authorizing the
unlawful payment of any dividend or other distribution in violation of Section
78.300 of the Nevada Revised Statutes. The limitation of liability provided
herein shall continue after an officer or director has ceased to occupy such
position as to acts or omissions occurring during such officer's or director's
term or terms of office, and no amendment or repeal of this Article VII shall
apply to or have any effect on the liability or alleged liability of any officer
or director of the Corporation for or with respect to any acts or omissions of
such officer or director occurring prior to such amendment or repeal.
2. The foregoing amendment and restatement of the Articles of
Incorporation was duly adopted by stockholders representing a majority of the
outstanding shares of the Corporation entitled to vote thereon pursuant to
shareholder action taken in lieu of a shareholder meeting, as authorized under
Nevada Revised Statutes Section 78.320.
2
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of August,
1996.
PROSOFT DEVELOPMENT, INC.
By: /s/ Anna Brannon
----------------------------
Anna Brannon
Executive Vice President
By: /s/ Eric W. Richardson
----------------------------
Eric W. Richardson
Secretary
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On the _____ day of _______________, 1996, personally appeared before me,
Anna Brannon and Eric W. Richardson, and duly acknowledged to me that they are
the persons who signed the foregoing instrument as President and Secretary,
respectively, and that they have read the foregoing instrument and know the
contents thereof and that the same is true of their own knowledge except as to
those matters upon which they operate on information and belief and as to those
matters believe them to be true.
________________________________
Notary Public
My commission expires:___________
3
<PAGE>
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
PROSOFT DEVELOPMENT, INC.
We the undersigned President and Secretary of ProSoft Development,
Inc. do hereby certify:
That the Board of Directors of said Corporation pursuant to an Action
by Unanimous Written Consent of the Board on the 25th day of September, 1996,
adopted a resolution to amend the Restated Articles of Incorporation as follows:
Article I is hereby amended to read as follows:
"ARTICLE I
NAME
The name of the Corporation is Prosoft I-Net Solutions, Inc."
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 7,336,404; that the said change
and amendment have been consented to and approved by a vote of the stockholders
holding at least a majority of each class of stock outstanding and entitled to
vote thereon.
DATED: October 18, 1996 /s/Donald Danks
------------------------------
Donald Danks, President
/s/Eric W. Richardson
--------------------------------
Eric W. Richardson, Secretary
<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On 10-18-96 before me, Caryl Evelyn Townsend, a notary public in and
for said State, personally appeared DONALD DANKS and ERIC W. RICHARDSON,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the persons whose names are subscribed to the within instrument and
acknowledged to me that they executed the same in their authorized capacities,
and that by their signatures on the instrument the persons, or the entity upon
behalf of which the persons acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/Caryl Evelyn Townsend (Seal)
------------------------------------
2
<PAGE>
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
PROSOFT I-NET SOLUTIONS, INC.
We the undersigned President and Secretary of Prosoft I-Net Solutions,
Inc. do hereby certify:
That the Board of Directors of said Corporation pursuant to an Action
by Unanimous Written Consent of the Board on the 1st day of September, 1998,
adopted a resolution to amend the Restated Articles of Incorporation as follows:
Article I is hereby amended to read as follows:
"ARTICLE I
NAME
The name of the Corporation is "prosofttraining.com."
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 11,770,242, that the said
change and amendment have been consented to and approved by a vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
DATED: January 25, 1999 /s/ John Buckley
-----------------------------------
John J. Buckley, President
/s/ Kimberly V. Johnston
-----------------------------------
Kimberly V. Johnston, Secretary
<PAGE>
Consent of Grant Thornton LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Amendment to Form S-3 Registration Statement (No. 333-35249) and related
Prospectus of ProsoftTraining.com (formerly Prosoft I Net Solutions, Inc.) for
the registration of 7,007,532 shares of its common stock and the Post-Effective
Amendment on Form S-3 to Registration Statements on Form S-1 (Nos. 333-11247 and
333-28993) for the registration of an aggregate of 3,982,955 shares of its
common stock and to the incorporation by reference therein of our report dated
September 11, 1998 (November 12, 1998), with respect to the consolidated
financial statements of ProsoftTraining.com as of and for the year ended July
31, 1998, included in its Annual Report (Form 10-K) for the year ended July 31,
1998, filed with the Securities and Exchange Commission.
Grant Thornton LLP
Dallas, Texas
February 9, 1999
<PAGE>
Exhibit 23.2
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 3 to Form S-1 in the Registration Statement (Form S-3 No. 333-35249) and
related Prospectus of ProsoftTraining.com (formerly Prosoft I-Net Solutions,
Inc.) for the registration of 7,007,532 shares of its common stock and the Post-
Effective Amendment on Form S-3 to Registration Statements (Form S-1 No. 333-
11247 and 333-28993) for the registration of an aggregate of 3,982,955 shares of
its common stock and to the incorporation by reference therein of our report
dated October 24, 1997, with respect to the consolidated financial statements of
Prosoft I-Net Solutions, Inc. as of July 31, 1997 and for the year ended July
31, 1997 and the period from December 8, 1995 (date of incorporation) to July
31, 1996, included in its Annual Report (Form 10-K) for the year ended July 31,
1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Orange County, California
February 2, 1999
<PAGE>
Exhibit 23.3
CONSENT OF KELLY & COMPANY, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Amendment to Form S-3 Registration Statement (No. 333-35249) and related
Prospectus of ProsoftTraining.com for the registration of 7,007,532 shares of
its common stock and the Post-Effective Amendment on Form S-3 to Registration
Statements on Form S-1 (Nos. 333-11247 and 333-28993) for the registration of an
aggregate of 3,982,955 shares of its common stock and to the incorporation by
reference therein of our report dated March 8, 1996, with respect to the
financial statements of Professional Development Institute (a sole
proprietorship) included in the Annual Report (Form 10-K) of ProsoftTraining.com
for the year ended July 31, 1998, filed with the Securities and Exchange
Commission.
Kelly & Company
Newport Beach, California
February 8, 1999
