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PROSPECTUS Filed under Rule 424(b)(3) of Regulation C
SEC file number (333-50532)
25,184,862 SHARES
JAWZ Inc.
COMMON STOCK
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Of the shares of common stock included in this prospectus, 18,748,745
shares are owned by, or are issuable upon the exercise of warrants owned by, the
stockholders listed in the section of this prospectus called "Selling
Stockholders." See "Selling Stockholders" beginning on Page 10. The selling
stockholders may sell any or all of their shares from time to time. See "Plan of
Distribution."
In addition, in connection with our prior acquisitions of Pace,
Offsite, General Network Services, 4Comm and Betach, we have prepared this
prospectus to register under the Securities Act for the issuance of 6,436,117
shares of our common stock issuable upon the exchange of exchangeable shares of
our subsidiaries, JAWS Acquisition Corp., an Alberta corporation ("JAC") and
JAWS Acquisition Canada Corp., an Alberta corporation ("JACC"). See "Selling
Stockholders" beginning on Page 10.
We will not receive any of the proceeds of sales by the selling
stockholders, or upon the issuance of any shares of our common stock to the
holders of JAC exchangeable shares and JACC exchangeable shares.
We have agreed to bear all expenses related to this offering, other
than any underwriting discounts and commissions and any transfer taxes on the
shares of common stock that the selling stockholders are offering.
Our common stock is included for quotation on the Nasdaq National
Market System under the symbol "JAWZ".
Investing in this common stock involves a high degree of risk. 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.
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The date of this prospectus is January 10, 2001.
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PROSPECTUS SUMMARY
This summary is not a substitute for the more detailed information, financial
statements and the notes to the financial statements appearing elsewhere in this
prospectus. This prospectus contains forward looking statements that involve
risks and uncertainties. JAWZ' actual results could differ materially from the
results anticipated in these forward looking statements as a result of the
factors set forth under "Risk Factors" and elsewhere in this prospectus.
JAWZ provides information security products and services to customers
in seven targeted industries, including: Financial Services, Health Care,
Cyber-crime & Forensics,Government, Telecommunications, and Strategic & Emerging
Markets. JAWZ' total revenue was $7,006,755 for the nine months ended September
30, 2000 and JAWZ has total assets as of $34,995,903 as of September 30, 2000.
Approximately 40% of JAWZ' revenue was derived from customers in the Financial
Services and Telecommunications industries. JAWZ' net loss for the nine months
ended September 30, 2000 was $17,661,949. This net loss is primarily due to
JAWZ' acquisition of development stage companies and moving JAWZ products toward
and into the commercialization stage. This growth process includes geographic
expansion and the expenses related to the preparation of various marketing and
sales documents and materials, payment of wages and benefits, requirements for
office space, supplies and other office related expenses.
JAWZ continues to grow its business through internal development and
through acquisitions. JAWZ has completed seven material acquisitions since
November 1999. The integration of these acquired businesses into JAWZ's
information security business has expanded the products and services which JAWZ
offers its customers. JAWZ products and services include:
Technical Services:
o JAWZ offers its customers a comprehensive review and analysis of
managerial, technical and operational controls in order to determine
the availability, integrity, and confidentiality of electronic data.
The analysis includes a review of security strategy and policies,
attack threats and vulnerabilities, the structure of existing security
components and an assessment of the customer's electronic data in order
to determine what information warrants protection. It also includes a
review of the technical and operational controls and an examination of
any hosting security, networks, physical, external and internet
security such as: how the customer currently responds to security
breaches, contingency plans for security breaches, personnel hiring
practices, the customer's change control management, documentation of
customer computer programming and the organization of internal
responsibility for security. Once the customer's existing security has
been assessed, JAWZ will then develop a security architecture
(solution) designed to take into account the customer's business model,
available technology and security industry practices.
o JAWZ offers customers an assessment of data vulnerabilities to theft
from third party internet attacks by attempting to gain access to the
customer's electronic data from a location external to the customer.
o JAWZ offers customers a review and assessment of the security of the
customer's computer operating system and how it protects the customer's
computer network.
o JAWZ assists customers by providing covert attempts, with managements'
consent, to obtain crucial information as a test of internal controls
in order to better attack and penetrate a system.
o JAWZ offers customers a service pursuant to which JAWZ assesses,
selects and implements a firewall, which is a computer program that
prevents unauthorized entry into the whole of, or parts of the
customer's computer network. If the customer has an existing firewall,
JAWZ will assess its effectiveness and make recommendations for it's
improvement. If a customer's network does not contain a firewall,
requirements will be determined and JAWZ will recommend a third party
manufactured firewall, install the firewall and monitor the system.
o In the event of a customer's security breach, JAWZ offers customers
access to a team of professional services staff to undertake emergency
repairs to the customer's system and security.
o JAWZ also offers customers assistance with development and/or an
assessment of existing business continuity/disaster recovery plans and
the development of improvements.
Managed Services:
JAWZ administers information security systems for customers who do not
have the necessary staff, experience or inclination to implement or administer
the day to day security operations of their system. These services include
firewall management where JAWZ provides the day to day monitoring of the
customer's firewalls and any vulnerabilities such as mailing lists and permitted
users, as well as the maintenance of customer access requirements , Secure
Network Storage (SNS) and Public Key Infrastructure (PKI) system monitoring.
JAWZ SNS is an internet
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based data backup and recovery solution. Security monitoring services also
provide customers with information on potential threats and the vulnerabilities
of electronic data.
Application Development:
Where security is a customer's primary concern, JAWZ will develop and
implement a secure internet based application and computer network. An example
being internet based applications using PKI techniques. PKI refers to the
electronic authentication of individual users of the internet. PKI enabled
internet based applications permit the verification of Internet users and is
critical in financial transactions and other business transactions occurring
over the Internet.
Products:
JAWZ develops, sells, installs and supports both its own and third
party information security products. Third party manufacturers of information
security products whose products JAWZ resells include: ActivCard, Aladdin,
Axent, Blue Lance, Borderware, Check Point, Cisco Systems, Content Technologies,
DataKey, Entrust, F-Secure Inc., Funk Software, Harris Corporation - STAT,
Internet Security Systems, Intrusion.com, LogiKeep, Master Design & Development,
McAfee, Network Flight Recorder (NFR), Network Associates (NAI), Network ICE,
PGP Security, Proginet, Rainbow Technologies, Securant, Secure Computing, RSA
Security, Security Tools for NT, Sniffer Technologies, Tech Assist - Tools that
Work, Tripwire, Viasec, and WebTrends.
JAWZ' own products are encryption related. The most recently released
JAWZ product is the JAWZ DataGator. DataGator is a software product which
automatically encrypts all data on Palm(TM) OS handheld devices. Other JAWZ
products include: JAWZXMAIL, JAWZMEMO and JAWZ Data Encryption.
Training and Education:
JAWZ offers its customers computer training in retrieving and
processing electronic data for use as evidence in legal proceedings.
Strategic Objectives:
The strategic goal for JAWZ is to consolidate the highly fragmented
information security industry and to achieve increasing economies of scale
through the acquisition of growing organizations and integrating such operating
entities through centralized administration and planning. Through industry and
management expertise, JAWZ attempts to ensure that acquired companies' receive
the capital and corporate planning necessary to successfully compete in their
respective markets.
General:
Shares of JAWZ' common stock are included for quotation on the Nasdaq
National Market under the symbol "JAWZ". JAWZ' principle executive offices are
located in Toronto, Ontario. JAWZ also has offices in Calgary, Alberta,
Edmonton, Alberta, Ottawa, Ontario, Boston, Massachusetts, Fairfield, New
Jersey, Chicago, Illinois and Pasadena, California.
JAWZ' registered offices are located at The Corporation Trust Company,
1209 Orange Street, in the City of Wilmington, County of New Castle, 19801 and
our principle executive office is located at 12 Concorde Gate, Suite
900,Toronto, Ontario, Canada M36 3N6. Our website is located at www.jawzinc.com.
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The information contained in this prospectus
is accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or any sale of the common stock.
CURRENCY REFERENCES
Financial information herein is expressed in the United States dollars
(US$," "$" or "dollars"), unless stated in Canadian dollars ("Cdn$"). As of
December 11, 2000, the exchange rate was US$1.00 equal Cdn$1.54.
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RISK FACTORS
Investors should carefully consider the risks and uncertainties
described below before making an investment decision.
If any of the following risks actually occur, our business, financial
condition or operating results could be materially harmed. In this case, the
trading price of our common stock could decline and you may lose all or part of
your investment.
Risks Relating to Ownership of JAWZ common stock
JAWZ common stock could be delisted from the Nasdaq National Market,
which delisting could hinder your ability to obtain accurate quotations as to
the price of JAWZ common stock, or dispose of JAWZ common stock in the secondary
market
Although JAWZ common stock is currently listed on the Nasdaq National
Market, JAWZ cannot guarantee that an active public market for its common stock
will continue to exist. JAWZ common stock is required to maintain a minimum bid
price of $1.00 per share in order to trade on the Nasdaq National Market. In the
event that JAWZ common stock fails to maintain the minimum bid price criteria,
JAWZ common stock may be delisted from the Nasdaq National Market or be required
to reapply for listing meeting the Nasdaq initial listing requirements, which
are generally more stringent that the requirements currently governing JAWZ.
Additional factors giving rise to delisting could include, but might not be
limited to (1) a reduction of JAWZ' net tangible assets below $4,000,000, (2) a
reduction to one active market maker, (3) a reduction in the market value of the
public float in JAWZ' securities to less than $5,000,000, or (4) the discretion
of the Nasdaq National Market.
Nasdaq National Market trading, if any, of JAWZ common stock would
thereafter be conducted in the over-the-counter markets of the National
Association of Securities Dealers. Consequently, the liquidity of JAWZ common
stock would likely be impaired, not only in the number of shares which could be
bought and sold, but also through delays in the timing of the transactions,
reduction in the coverage of JAWZ by securities analysts and the news media, and
possibly lower prices for our securities than might otherwise prevail.
High volume of shares eligible for sale pursuant to this prospectus
The resale of the 25,184,862 shares of common stock registered in JAWZ
registration statement of which this Prospectus is a part could adversely affect
the price of the shares of common stock. As of December 15, 2000, there were
32,437,099 shares of JAWZ common stock outstanding. No prediction can be made as
to the effect that future sales of shares of common stock, or the availability
of shares of common stock for future sales, will have on the market price of the
common stock prevailing from time to time. Sales of substantial amounts of
common stock, or the perception that these sales could occur could adversely
effect prevailing market prices for the common stock.
The volatility of the stock markets could adversely affect our stock
price
Stock markets are subject to significant price and volume fluctuations
which may be unrelated to the operating performance of particular companies and
the market price of JAWZ common stock may frequently change. The market price of
JAWZ common stock could also fluctuate substantially due to a variety of other
factors, including: quarterly fluctuations in JAWZ results of operations, JAWZ'
ability to meet analysts' expectations, adverse circumstances affecting the
introduction of market acceptance of new products and services offered by JAWZ,
announcements of new products and services by competitors, changes in the
information technology environment, changes in earnings estimates by analysts,
changes in accounting principles, sales of JAWZ common stock by existing holders
and loss of key personnel.
JAWZ does not anticipate paying dividends on its common stock in the
foreseeable future
JAWZ has generated minimal cash flow in the past and does not currently
anticipate generating significant cash flows from operations in the near future.
Therefore, JAWZ has not paid any dividends on its common stock to date and plans
to retain earnings, if any, for the continued development and expansion of JAWZ'
business operations. Accordingly, potential investors should not acquire shares
of JAWZ common stock with the investment objective of receiving dividend income
from JAWZ.
An investment in JAWZ may be diluted
JAWZ may issue a substantial number of shares of JAWZ common stock or
preferred stock without investor approval. Any such issuance of JAWZ securities
in the future could reduce an investor's ownership percentage and voting rights
in JAWZ and further dilute the value of his or her investment.
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Penny Stock Rules limit the liquidity of JAWZ common stock
JAWZ common stock has recently been included for quotation on the
Nasdaq National Market System at a price between $1.00 and $2.50 per share, and,
therefore, may now and in the future be subject to the penny stock rules under
the Exchange Act. These rules regulate broker-dealer practices for transactions
in "penny stocks." Penny stocks generally are equity securities with a price of
less than $5.00. The penny stock rules require broker-dealers to deliver a
standardized risk disclosure document that provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer must also provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson and monthly account statements showing the market value of each
penny stock held in the customer's account. The bid and offer quotations, and
the broker dealer and salesperson compensation information, must be given to the
customer orally or in writing prior to completing the transaction and must be
given to the customer in writing before or with the customer's confirmation.
In addition, the penny stock rules require that prior to a transaction,
the broker and/or dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These additional penny stock
disclosure requirements are burdensome and may reduce purchases of this offering
and reduce the trading activity in the market for JAWZ common stock. As long as
JAWZ common stock is subject to the penny stock rules, holders of JAWZ common
stock may find it more difficult to sell their securities.
Risks Relating to the Business of JAWZ
JAWZ' proceeds from available financing may not be sufficient to pursue
its operating objectives
Developing, manufacturing and marketing software and information
security solutions and the plans of JAWZ for expansion of its operations, as
mentioned above, will require significant amounts of capital. Because JAWZ has
no significant internal revenues to finance its continuing operations and plans
for expansion, JAWZ is dependent upon the proceeds from sales of JAWZ'
securities to satisfy its capital and operating requirements. JAWZ believes that
it has adequate financing to satisfy its capital and operating requirements
through the end of 2000. Thereafter, JAWZ will have to arrange for additional
financing, unless it can generate revenues from its products and services, to
finance its manufacturing and marketing operations at a sufficient level.
Financing options could include, but will not be limited to, additional sales of
JAWZ' securities or an operating line of credit. JAWZ will need, and is
considering, financing beyond this period including strategic partnerships,
public or private equity and/or debt financing. No assurance can be given,
however, that JAWZ will be able to obtain additional financing on terms
acceptable to JAWZ, if at all. If JAWZ fails to obtain financing, or fails to
obtain financing on terms favorable to JAWZ, JAWZ may be unable to continue to
complete the commercialization of its products, or continue its current
operations as presently conducted, if at all.
JAWZ and its subsidiaries have limited operating histories and
continued operating losses
Generally, JAWZ and its subsidiaries have short operating histories,
limited sales and insignificant operating revenues. For example, JAWZ Canada was
incorporated on September 19, 1997, did not begin producing software until
October 1997 and did not begin marketing software until May 1998.
Because of JAWZ short operating history and limited sales, it faces all
the risks and problems associated with a new business, including the existence
of operating losses. For example, between the time of the incorporation of JAWZ
and September 30, 2000, JAWZ has, on a consolidated basis, incurred cumulative
losses of $28,042,866. JAWZ anticipates that losses will continue in the future
unless it is able to produce revenue from sales of its software.
JAWZ cannot be certain that the operations of Pace, Nucleus, GNS,
4Comm, BSI and BASI, that have been integrated into JAWZ Canada and JAWZ USA,
can sustain profitability in any future period. Potential investors should be
aware that JAWZ Canada and JAWZ USA operate in a new and rapidly evolving market
and must respond to competitive developments, continue to upgrade and expand the
services it offers and continue to attract, retain and motivate employees in
order to maintain its profitability.
JAWZ cannot predict future revenues and operating results of JAWZ
Canada and JAWZ USA nor can it predict the operating expenses of JAWZ Canada and
JAWZ USA based on previous results for a number of reasons including the factors
described below. The revenues associated with a particular sale may vary
significantly depending upon the number of products licensed by a client, the
number of devices used by the client and the client's relative need for the
services of JAWZ Canada and/or JAWZ USA. Large individual sales or even minor
delays in customer orders can cause significant variation in licensing revenues
and results of operations for a particular period. In addition, JAWZ expects
each of JAWZ Canada and JAWZ USA to increasingly focus its efforts on the sale
of enterprise-wide security solutions, including JAWZ Amalco's entire product
suite and the related services of JAWZ Canada and JAWZ USA, as opposed to the
sale of component products. As a result, JAWZ anticipates that each sale made by
each of JAWZ Canada and JAWZ USA may require additional time and effort from
sales staff. Further, JAWZ expects each of JAWZ Canada and JAWZ USA to expand
upon the services it provides as well as its sales and marketing operations and
to improve its
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internal operating and financial systems. Finally, to enhance the market share
of each of JAWZ Canada and JAWZ USA and the services they offer, JAWZ intends to
seek additional candidates for acquisition. As a result, spending levels for
each of JAWZ Canada and JAWZ USA will be established by JAWZ based, in large
part, on expected future revenues. If the revenues of any of JAWZ Canada and
JAWZ USA and actual results in any future period fall below the expectations of
JAWZ, the operating results of JAWZ will be adversely affected. Due to these
factors, JAWZ anticipates that the quarterly and annual revenues, expenses and
operating results of each of JAWZ Canada and JAWZ USA will vary significantly in
the future.
JAWZ is a defendant in pending litigation which could have a material
adverse effect on our business.
On August 10, 2000, Bristol Asset Management LLC, an investor in JAWZ,
filed a complaint against JAWZ and Robert Kubbernus in Los Angeles Superior
Court. The complaint alleges breach of contract, fraud in the inducement, and
breach of fiduciary duty and unfair competition (Cal. Bus. Code s. 17200) . On
October 3, 2000, we filed an answer to the Complaint in the Los Angeles Superior
Court in which we have denied substantially all of Bristol's material
allegations and listed eighteen affirmative defenses. No assurance can be given
that Bristol will not succeed in whole or in part on the claims made or that the
damages, if any, associated with Bristol's claims will not have a material
adverse effect on our operations and our financial position.
If we cannot protect our copyright, trademark and patents pending,
other companies could use our technology in competitive products. If we infringe
on the copyrights, trademarks or patents of others, other companies could
prevent us from developing or marketing our products.
JAWZ' success depends upon, amongst other things, its proprietary
encryption technology. We rely on a combination of contractual rights,
copyright, trade secrets, know-how, trademarks, non-disclosure agreements and
technical measures to establish and protect these rights. We cannot assure
investors that we can protect our rights and prevent third parties from using or
copying our technology or intellectual property.
JAWZ does not presently own any patents or copyright registrations but
it has filed a U.S. patent application for its data encryption algorithm L5,
which is pending. However, there is no guarantee JAWZ will be successful and
receive a patent.
JAWZ believes that its technologies have been independently developed
and that these technologies do not infringe on the proprietary rights or trade
secrets of others. However, we cannot assure investors that it has not infringed
on the technologies of third parties or that third parties will not make
infringement violation claims against us. Any infringement claims against JAWZ
may negatively effect JAWZ' ability to produce and sell software.
International companies currently use all or a portion of the name
"JAWZ" in connection with products or services in industries the same as and
different from that of JAWZ. While JAWZ is attempting to qualify under a
trademark its name throughout the U.S. and Canada, significant issues may be
present as to the ability to widely use the name in connection with the products
or services to be rendered by JAWZ.
Recent acquisitions include inherent risks
JAWZ has recently acquired Pace, Offsite, Nucleus, BSI, BASI, 4Comm and
GNS, and substantially all of the assets of Secure Data Technologies Corporation
("SDTC") and JAWZ may acquire or invest in other businesses, technologies and
product lines from time to time that are complementary to our business. These
recent acquisitions are accompanied by the risks commonly encountered in these
types of transactions, including, among others, the difficulty of assimilating
the operations and personnel of the acquired businesses, the potential
disruption of our ongoing business, the diversion of our management from our
day-to-day operations, our ability to incorporate acquired technologies
successfully into our products and services, the additional expense associated
with amortization of acquired intangible assets, the potential impairment of our
relationships with our employees, customers and strategic partners, our ability
to retain key technical and managerial personnel of the acquired business and
our ability to maintain uniform standards, controls, procedures and policies. We
would also encounter these risks if we acquire or invest in the other businesses
in the future. Because of these and other factors, the recent acquisitions and
any future acquisitions, if consummated, could negatively impact our business,
operating results and financial condition.
JAWZ' business is in an early stage of market development and its
success depends on market acceptance of its products and services
JAWZ' success depends on whether or not our products and services are
accepted in the marketplace. Investors should be aware that companies
introducing new products into the market are subject to a high level of
uncertainty and risk. Because the market for its software and services is new
and evolving, JAWZ cannot predict the size and future growth rate, if any, of
the market. JAWZ cannot assure investors that the market for its various
products and services will develop or that demand for these products and
services will emerge or become economically sustainable. Market acceptance of
its products and services depends on its ability to establish brand images and
reputations for high quality and to differentiate their products and services
from competitors. There can be no assurance that the products and services will
be perceived as being of high quality or better than products and services of
others, or that JAWZ will be
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successful in establishing their brand image. Additionally, the management teams
of JAWZ has no experience manufacturing or marketing software or providing
services on a large scale. This lack of experience could result in JAWZ' failure
to commercialize and sell its products and services.
JAWZ may not be able to continue to compete in its rapidly changing
industry
Rapid changes in technology pose significant risks to JAWZ that it
cannot either control or influence the forces behind these changes. In addition
to emerging competition, evolving requirements and needs of clients and the
extent to which hackers and others seek to compromise secure systems, JAWZ must
adapt to changing computer hardware and software standards as well as to
frequent introductions of new products and enhancements to existing products.
The success of JAWZ will depend on its ability to create, develop, adapt and
improve information technology solutions in response to these and other changes.
JAWZ cannot assure investors that it will be able to successfully
identify new opportunities and develop and bring new products and services to
market in a timely manner, nor can JAWZ guarantee investors that products and
services developed by its competitors will not make JAWZ products and services
noncompetitive or obsolete. Further, the techniques used by hackers to
compromise the security of networks and intranets are constantly evolving and
are increasingly sophisticated. Because new hacking techniques are usually not
recognized until utilized against one or more targets, JAWZ is not able to
anticipate such techniques. To the extent that new hacking techniques result in
the compromise of JAWZ security systems, affected clients may believe that JAWZ
products and services are ineffective and may affect JAWZ business, operating
results and financial condition.
Because JAWZ products and services involve complex technology, major
new products and product enhancements require a long time to develop and test
before going to market. JAWZ cannot assure investors that it will have the
capital resources or the ability to implement any new technology or service. In
addition, because it is difficult to estimate the amount of time which is
required to develop new products and product enhancements, JAWZ has had to delay
the scheduled introduction of new and enhanced products in the past and JAWZ may
have to delay the introduction of new products, enhancements and services in the
future. Any failure by JAWZ to timely develop and introduce new products and
services or enhance current products and services could adversely affect JAWZ
business, operating results and financial condition.
Further, the market for network security monitoring, detection and
response solutions is intensely competitive and Pace expects competition to
increase in the future. JAWZ cannot guarantee that each of JAWZ Canada and JAWZ
USA will compete successfully against current or potential competitors,
especially those with significantly greater financial resources or brand name
recognition. Increased competition may result in price reductions, reduced gross
margins and loss of market share for JAWZ Canada and JAWZ USA.
The competitors of JAWZ Canada and JAWZ US generally fall within one of
the following four categories:
(a) clients and the consulting firms that assist them in
formulating security systems;
(b) relatively small software companies offering relatively
limited applications for network and internet security;
(c) large companies that currently sell competitive products and
services as well as other large software companies that have
the technical capability and resources to develop competitive
products; and
(d) software or hardware companies that could integrate features
that are similar to the products of JAWZ Canada into their
own products.
Mergers or consolidations between these competitors, or acquisitions of
small competitors by larger companies, would make these combined entities more
formidable competitors to JAWZ Canada and JAWZ USA. Large companies may have
advantages over each of JAWZ Canada and JAWZ USA because of their longer
operating histories, greater name recognition, larger customer bases or greater
financial, technical and marketing resources. As a result, they may be able to
adapt more quickly to new or emerging technologies and changes in customer
requirements. These companies can also devote greater resources than JAWZ Canada
and JAWZ USA to the promotion and sale of their products.
Potential liabilities could arise in JAWZ' future based on product
defects
Many of our customers use our products and services for critical
functions of monitoring and enhancing network security. As a result, JAWZ risks
product liability and related claims for products and services if it does not
adequately perform this function. JAWZ typically seeks to limit liability for
special, consequential or incidental damages in their licensing agreements but
these provisions may not in all cases be enforceable under applicable laws. A
product
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liability claim, to the extent not covered by insurance, could adversely affect
JAWZ business, operating results and financial condition.
In addition, complex software products, like those we develop, may
contain undetected "bugs" that, despite testing, are discovered only after
installation and use by clients. These bugs could result in adverse publicity,
loss of or delay in market acceptance or claims by clients against JAWZ, any of
which could be very damaging to JAWZ business, operating results and financial
condition. Clients who deploy or use products improperly or incompletely may
experience temporary disruptions to their computer networking systems, which
could damage the JAWZ' reputation and its relationship with clients. Current
products may not be error-free and it is extremely doubtful that the future
products of JAWZ will be error-free. Furthermore, computers are manufactured in
a variety of different configurations with different operating systems, like
Windows, Unix, Macintosh and OS/2, and embedded software. As a result, it is
very difficult to comprehensively test software products for programming or
compatibility errors. Errors in the performance of JAWZ products, whether due to
design or their compatibility with products of other companies, could hinder the
acceptance of these products, and thus JAWZ' ability to implement those
products.
JAWZ' marketing strategies may not be successful
JAWZ expects to derive some of their sales revenue through independent
third parties who will either resell or use JAWZ' products to enhance their own
products. JAWZ is unable to determine how successful these providers will be in
selling JAWZ' software. Furthermore, JAWZ does not have any history or
experience in establishing or maintaining this third party support, and there
can be no assurance that we will be able to successfully support reseller
networks. If we are unable to provide this support, we may lose resellers and,
consequently, distribution of our products would be adversely affected.
Additionally, most resellers will offer competitive products manufactured by
third parties. There can be no assurance that resellers will give priority to
JAWZ' products and services over competitors' products and services. Finally, if
JAWZ is unable to support a reseller, we will need to attract additional or
replacement resellers to sell JAWZ' products and services. There can be no
assurance that JAWZ will be able to attract a sufficient number of additional or
replacement resellers in order to assure that our products and services will be
successfully marketed and distributed at a profit or that the additional or
replacement resellers will be successful in selling our products and services.
JAWZ' expansion of production and distribution capacities may not be
successful
JAWZ must increase its software production capacity and expand its
marketing network to sell its software before it will have a chance to compete
in the marketplace. Increasing JAWZ manufacturing, service and marketing
capacity will involve hiring additional personnel, purchasing additional
manufacturing equipment and spending significant funds on advertising. The
foregoing will require significant capital expenditures, which will most likely
increase JAWZ' operating losses for an indefinite period of time. JAWZ'
expansion plans will also place a great deal of strain on its management team,
most of whom have not had experience managing large complex business operations.
JAWZ cannot guarantee that it will be able to expand its software production,
service and marketing capabilities as planned. If any of these obstacles prevent
JAWZ from expanding its software production, service and marketing business,
JAWZ may be forced to terminate its operations.
Although direct sales have accounted for JAWZ' revenues in 1999, JAWZ'
future performance will depend, in part, upon its ability to attract new
partners and develop additional distribution channels to effectively market and
support its services and the products of JAWZ. JAWZ cannot guarantee that it
will be able to attract these partners or develop additional distribution
channels.
Due to the rapidly changing nature of the information security industry
and the size of our company, we depend on key personnel at all levels
JAWZ depends on the efforts of its management team. Even though JAWZ
has employment agreements with Messrs. Kubbernus, Mamdani, Labrinos, Surbey and
Cumming and Minhas, it cannot guarantee that these persons will continue their
employment. Each of these members of JAWZ management team has entered into an
employment agreement with JAWZ, pursuant to which, in each case, the term of
employment extends until the earlier of (i) the date specified by the executive
officer in a notice of voluntary termination delivered by the executive officer
to JAWZ; provided that the notice shall not be effective until at least ten (10)
days after delivery thereof, (ii) the date the executive officer is terminated
by JAWZ for "just cause" (as defined in the employment agreement), or (iii) with
respect to termination other than for "just cause," the date which is determined
by providing the executive officer with one month's notice for each full year of
completed service commencing on the date JAWZ provides the executive officer
with a notice of termination. The loss of the services of one or more of the key
people may have a negative effect on JAWZ' ability to conduct its operations.
JAWZ' success also depends on its ability to attract and retain highly
qualified engineers, managers, marketers and sales and service personnel. The
competition for employees at all levels of the information security industry,
8
<PAGE>
especially those with experience in the relatively new discipline of security
software, is increasingly intense and JAWZ cannot assure that it will be able to
hire or retain necessary personnel.
Risks associated with the authorization of preferred stock and possible
takeover effects
The board of directors of JAWZ is authorized to create and issue shares
of preferred stock without the approval of JAWZ' shareholders. Any preferred
stock that the board of directors of JAWZ creates and issues could negatively
affect the voting power or other rights of holders of shares of JAWZ common
stock. Also, the board of directors of JAWZ may create preferred stock which
could be used to prevent a third party from taking control of JAWZ.
Internet networks may not become widely adopted, limiting the market
for JAWZ' products
In order for us to be successful, internet networks must be widely
adopted as a means of trusted and secure communications and commerce within an
adequate time frame. Because trusted and secure communications and commerce over
internet networks is new and evolving, it is difficult to predict with any
assurance the size of this market and its growth rate, if any. To date, many
businesses and consumers have been deterred from utilizing internet networks for
a number of reasons, including, but not limited to, potentially inadequate
development of network infrastructure, security concerns, inconsistent quality
of service, lack of availability of cost-effective, high-speed service, limited
numbers of local access points for corporate users, inability to integrate
business applications on internet networks, the need to interoperate with
multiple and frequently incompatible products, inadequate protection of the
confidentiality of stored data and information moving across internet networks
and a lack of tools to simplify access to and use of internet networks. The
adoption of internet networks, for trusted and secure communications and
commerce, particularly by individuals and entities that historically have relied
upon traditional means of communications and commerce, will require a broad
acceptance of new methods of conducting business and exchanging information.
Companies and government agencies that already have invested substantial
resources in other methods of conducting business may be reluctant to adopt a
new strategy that may limit or compete with their existing efforts. Furthermore,
individuals with established patterns of purchasing goods and services and
effecting payments may be reluctant to alter those patterns. There can be no
assurance that internet networks will be widely adopted or adopted by enough
people to make our products successful.
The use of internet networks for trusted and secure communications and
commerce may not increase or may increase more slowly than expected because the
infrastructure required to support widespread trusted and secure communications
and commerce on these networks may not develop. For example, the internet has
experienced, and may continue to experience, significant growth in its number of
users and amount of traffic. There can be no assurance that the internet
infrastructure will continue to support the demands placed on it by this
continued growth or that the performance or reliability of the internet will not
be adversely affected by this continued growth. In addition, internet networks
could lose their viability due to delays in the development or adoption of new
standards and protocols to handle increased levels of activity or due to
increased governmental regulation. Changes in or insufficient availability of
communications services to support internet networks could result in slower
response times and also adversely affect usage of internet networks. If the
market for trusted and secure communications and commerce over internet networks
fails to develop or develops more slowly than expected, or if the internet
infrastructure does not adequately support any continued growth, our business,
operating results and financial condition would be adversely affected.
Fluctuations in the exchange rate could adversely affect JAWZ because
some of its operating subsidiaries are located in Canada
JAWZ' operating currency for its Canadian subsidiaries is Canadian
dollars, while its reporting currency is in United States dollars. Any change in
the value of the United States dollar against the Canadian dollar will affect
our Canadian dollar revenues and earnings when translated into United States
dollars. No assurance can be given that a fluctuation in the value of the
Canadian dollar against the United States dollar will not negatively impact
JAWZ' reported revenue and earnings.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This prospectus includes forward-looking statements. Some of the
forward-looking statements can be identified by the use of forward-looking words
such as "believes," "expects," "may," "will," "should," "seeks,"
"approximately," "intends," "plans," "estimates" or "anticipates" or the
negative of those words or other comparable terminology. Forward-looking
statements involve risks and uncertainties. A number of important factors could
cause actual results to differ materially from those in the forward-looking
statements. These factors include the inability to successfully develop and
commercialize products, the JAWZ' limited operating history and continuing
operating losses, recent and potential development strategic alliances, the
JAWZ' liquidity and capital resources, systems failures, technological changes,
volatility of securities markets, government regulations, and economic
conditions and competition in the geographic and the business areas where we
conduct our operations. For a discussion of the factors that could cause actual
results to differ from projected results, please see the discussion under "Risk
Factors" contained in this prospectus and in other information contained in our
publicly available SEC filings and press releases.
9
<PAGE>
USE OF PROCEEDS
JAWZ will not receive any proceeds from the sales of common stock by
the selling stockholders pursuant to this prospectus.
SELLING STOCKHOLDERS
The following table sets forth information with respect to the amount
of common stock held by each selling stockholder as of the date of this
prospectus and the shares being offered by the selling stockholders. The table
indicates the nature of any position, office or other material relationship that
the selling stockholder has had within the past three years with JAWZ or any of
its predecessors or affiliates.
This prospectus relates, in part, to the offer and sale by the selling
stockholders of up to 18,748,745 shares of common stock which are owned, or are
issuable upon the exercise of warrants owned by, the selling stockholders listed
in the "Selling Stockholders" section of this prospectus.
In addition, in connection with our prior acquisitions of Pace,
Offsite, General Network Services, 4Comm and Betach, we have prepared this
prospectus to register under the Securities Act for the issuance of 6,436,117
shares of our common stock issuable upon the exchange of exchangeable shares of
our subsidiaries JAC and JACC.
The selling stockholders may offer from time to time all or part of
these shares of common stock covered by this prospectus. Information with
respect to shares owned beneficially after this offering assumes the sale of all
of the shares offered and no other purchases or sales of common stock.
10
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares of Total
Common Number of Number of Number of Percentage
Stock, not Shares Shares of Shares to be Number of to be
including Represented Common Percentage Offered for Shares to Beneficially
Warrants, by Warrants Stock Beneficially the Account be Owned Owned
Beneficially Beneficially Beneficially Owned Before of the Selling after this after this
Name Owned Owned Owned Offering Stockholder Offering Offering
---- ----- ----- ----- -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BPI Canadian Small Companies
Fund.............................. 0 117,647.5 117,647.5 * 117,647.5 0 *
Interward Capital Corporation..... 0 20,000 20,000 * 20,000 0 *
Rockhaven Holdings Ltd............ 20,000 10,000 30,000 * 30,000 0 *
YMG Capital Management Inc........ 0 23,529 23,529 * 23,529 0 *
Acuity Investment Management
Inc**............................. 75,000 235,295 310,295 * 310,295 0 *
Beluga NV......................... 0 117,647.5 117,647.5 * 117,647.5 0 *
Pinetree Capital Corp............. 0 20,000 20,000 * 20,000 0 *
Fallingbrook Investments Ltd...... 0 17,647.5 17,647.5 * 17,647.5 0 *
Glentel Inc***.................... 700,000 934,000 1,634,000 4.90% 1,634,000 0 *
Kehler International Equities (1990)
Inc............................... 0 11,765 11,765 * 11,765 0 *
Jean Gevaert...................... 47,060 23,530 70,590 * 70,590 0 *
Murdoch & Co...................... 0 137,500 137,500 * 137,500 0 *
Royal Trust Corp. of Canada
ITF2363129003..................... 0 117,647.5 117,647.5 * 116,747.5 0 *
Bristol Asset Management,
LLC****........................... 0 850,000 850,000 2.55% 850,000 0 *
Thomas E. Skidmore................ 69,000 57,546 126,546 * 126,546 0 *
A. Allan Skidmore................. 0 57,546 57,546 * 57,546 0 *
Arthur Skidmore................... 0 8,340 8,340 * 8,340 0 *
Brian Skidmore.................... 0 6,255 6,255 * 6,255 0 *
Cary Skidmore..................... 0 8,340 8,340 * 8,340 0 *
Garry Skidmore.................... 0 6,255 6,255 * 6,255 0 *
Beverly Droulis................... 0 417 417 * 417 0 *
Margrit Hartman................... 0 7,506 7,506 * 7,506 0 *
Margaret Alexis Kennedy........... 0 7,089 7,089 * 7,089 0 *
Suzanne Lowndes................... 0 7,506 7,506 * 7,506 0 *
Thomson Kernaghan & Co.
Limited***........................ 1,952,293 276,466 2,228,759 6.82% 2,228,759 0 *
Third Point Partners LP........... 0 53,676.5 53,676.5 * 53,676.5 0 *
Third Point Offshore Fund Ltd..... 0 29,985 29,985 * 29,985 0 *
Points West International
Investments Ltd................... 0 17,326.5 17,326.5 * 17,326.5 0 *
Bonzai Partners LP................ 0 13,393 13,393 * 13,393 0 *
Bonzai Offshore Fund Ltd.......... 0 3,266.5 3,226.5 * 3,226.5 0 *
CALP II LP, c/o Forum Fund
Services.......................... 1,235,295 4,625,807 5,861,102 15.82% 5,861,102 0 *
David Schecter.................... 47,059 23,529.5 70,588.5 * 70,588.5 0 *
Kruco Inc. ....................... 0 11,765 11,765 * 11,765 0 *
Michael Pluscanskas............... 55,447 0 55,447 * 55,447 0 *
Tyson Macaulay.................... 55,447 0 55,447 * 55,447 0 *
Strong River Investments,
Inc.*****......................... 1,328,088 1,240,557 2,568,645 7.63% 2,568,645 0 *
Bay Harbor Investments, Inc.***** 1,328,088 1,240,557 2,568,645 7.63% 2,568,645 0 *
</TABLE>
* Less than 1%.
** Acuity Investment Management Inc. is the record holder of all 75,000
shares. Acuity Investment Management Inc. disclaims beneficial ownership
for all 75,000 shares of common stock listed above. Acuity Investment
Management Inc. purchased these shares of common stock at the direction
of the Bank of Nova Scotia Custodian for a/c #382 308.
11
<PAGE>
*** The relationship of Glentel Inc. and Thomson Kernaghan & Co. Limited, in
each case, with JAWZ is described under the caption, "Certain
Relationships and Related Transactions" in this prospectus. 65.2% of the
outstanding shares of Glentel Inc. are controlled by TLG International,
Inc. Arthur Skidmore is the natural person with sole or shared voting
and investment power over the shares held of record by Glentel Inc.
through TLG International, Inc. Mr. Mark Valentine owns 25% of Thomson
Kernaghan & Co. Limited and is the natural person with sole or shared
voting and investment power over the shares held by Thomson Kernaghan &
Co. Limited.
**** Paul Kessler is the natural person with 100% of the voting and
investment control over the shares held by Bristol Asset Management,
LLC.
***** Of the 2,568,645 shares, (a) 400,000 shares were issued by the Company
on June 22, 2000, (b) 200,000 shares were issued by the Company on July
17, 2000, (c) 728,088 shares were issued on November 27, 2000, (d)
120,000 shares are issuable upon the exercise of warrants granted on
June 22, 2000, and (e) up to an additional 1,120,557 shares are issuable
upon the exercise of warrants, subject to certain adjustments (the
"Adjustable Warrant"). For purposes of calculating the number of shares
issuable upon exercise of the Adjustable Warrants, the Company
determined the number of shares of common stock which would have been
issuable pursuant to the Adjustable Warrant assuming the market price
for shares of the Company's common stock was equal to 50% of the closing
bid price on June 21, 2000 (the business day immediately preceding the
initial closing date in connection with the private placement
transaction in connection with the Adjustable Warrant was issued by the
Company). Enright Investment Management Corp., of which Mr. Avi Vigder
is managing director, has voting and investment power over the shares
beneficially owned by Bay Harbor Investments, Inc. and Strong River
Investments, Inc.
+ The information contained in this table reflects "beneficial" ownership
of common stock within the meaning of Rule 13d-3 under the Exchange Act.
On November 28, 2000, JAWZ had 32,461,265 shares of common stock
outstanding. Beneficial ownership information reflected in the table
includes shares issuable upon the exercise of outstanding warrants
issued by JAWZ.
12
<PAGE>
PLAN OF DISTRIBUTION
Of the shares of common stock included in this prospectus, 18,748,745
shares are owned by, or are issuable upon the exercise of warrants owned by, the
selling stockholders.
As used in the rest of this section of the prospectus, the term "selling
stockholders" includes the named selling stockholders and any of their pledgees,
donees, transferees or other successors in interest selling shares received from
a named selling stockholder after the date of this prospectus.
The selling stockholders may offer and sell, from time to time, some or
all of the shares of common stock registered hereby. We have advised the selling
stockholders that Regulation M under the Exchange Act may apply to the
activities of the selling stockholders or broker-dealers in connection
therewith. We will pay all costs, expenses and fees in connection with the
registration of the shares including fees and disbursements of counsel to the
selling stockholders.
In addition, in connection with our prior acquisition of Pace Systems
Group Inc., Offsite Data Systems Ltd. , General Network Services Inc., 4Comm.Com
Inc., Betach Systems Inc., and Betach Advanced Solutions Inc., we have prepared
this prospectus to register under the Securities Act for the issuance of
6,436,117 shares of our common stock issuable upon the exchange of exchangeable
shares of our subsidiaries JAC and JACC. The shares of common stock attributable
to these prior acquisitions are as follows:
o 4,190,234 shares to allow the former shareholders and
warrantholders of Offsite to acquire shares of our common stock
upon their exchange of exchangeable shares of our subsidiary
JAC,
o 1,731,932 shares to allow the former shareholders of Pace (now
shareholders of JACC) to acquire shares of our common stock upon
their exchange of exchangeable shares of our subsidiary JACC;
o 140,618 shares to allow the former shareholders of 4Comm to
acquire shares of our common stock upon their exchange of
exchangeable shares of our subsidiary JACC; and
o 373,333 shares to allow the former shareholders of Betach to
acquire shares of our common stock upon their exchange of
exchangeable shares of JACC.
The shares may be sold by or for the account of the selling
stockholders from time to time in transactions included for quotation on the
Nasdaq National Market or otherwise. These sales may be at fixed prices or
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to these prevailing market prices or at negotiated prices. The
shares may be sold by means of one or more of the following methods:
o in a block trade in which a broker-dealer will attempt to sell a
block of shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by that
broker-dealer for its account pursuant to this prospectus;
o on markets where our common stock is traded or in an exchange
distribution in accordance with the rules of the exchange;
o through broker-dealers, that may act as agents or principals;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of these shares at a stipulated price per
share;
o in connection with the loan or pledge of shares to a
broker-dealer, and the sale of the shares so loaned or the sale
of the shares so pledged upon a default;
o in connection with put or call option transactions, in hedge
transactions, and in settlement of other transactions in
standardized or over-the-counter options;
o through short sales of the shares by the selling stockholders or
counterparties to those transactions, in privately negotiated
transactions;
o in any combination of the above. In addition, any of the shares
that qualify for sale pursuant to Rule 144 under the Securities
Act may be sold under Rule 144 promulgated under the Securities
Act rather than pursuant to this prospectus; or
13
<PAGE>
o any other method permitted pursuant to applicable law.
In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate.
Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. The Selling
Stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved. The broker-dealer transactions
may include:
o purchases of the shares by a broker-dealer as principal and
resales of the shares by the broker-dealer for its account
pursuant to this prospectus;
o ordinary brokerage transactions; or
o transactions in which the broker-dealer solicits purchasers.
If a material arrangement with any broker-dealer or other agent is entered into
for the sale of any shares of common stock through a block trade, special
offering, exchange distribution, secondary distribution, or a purchase by a
broker or dealer, a prospectus supplement will be filed, if necessary, pursuant
to Rule 424(b) under the Securities Act disclosing the material terms and
conditions of these arrangements.
The selling stockholders and any broker-dealers or agents participating in the
distribution of the shares may be deemed to be "underwriters" within the meaning
of the Securities Act, and any profit on the sale of the shares of common stock
by the selling stockholders and any commissions received by a broker-dealer or
agents, acting in this capacity, may be deemed to be underwriting commissions
under the Securities Act. We have agreed to indemnify the selling stockholders
against certain liabilities, including liabilities arising under the Securities
Act.
Certain of the Selling Stockholders have advised the Company that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their shares other than
ordinary course brokerage arrangements, nor is there an underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
Selling Stockholders.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon for us by Paul, Hastings, Janofsky & Walker LLP.
EXPERTS
The financial statements audited by Ernst & Young, LLP have been herein
incorporated by reference in reliance on their report given on their authority
as experts in accounting and auditing and herein incorporated by reference.
PricewaterhouseCoopers LLP, independent accountants, have audited
Offsite's financial statements at and for the periods ended June 30, 1999 and
1998, as set forth in their report herein incorporated by reference. We have
herein incorporated by reference these financial statements and notes thereto in
reliance on such report given on the authority of that firm as experts in
accounting and auditing.
Klayman & Korman, LLC, independent accountants, have audited Nucleus'
financial statements at and for the periods ended December 31, 1999, 1998 and
1997 as set forth in their report herein incorporated by reference. We have
herein incorporated by reference these financial statements and the notes
thereto in reliance on such report given on the authority of that Firm as
experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission ("SEC"). You may
read and copy all or any portion of any document that we file at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
regional offices of the SEC located at Seven World Trade Center, 13th Floor, New
York, New York 10048 and at Citicorp Center, 500-West Madison Street, Suite
1400, Chicago, Illinois 60661. You can request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC. Please call the
14
<PAGE>
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings, including the registration statement, are also
available to you on the SEC's Web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
o Our Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, filed with the SEC on March 24, 2000 (SEC
File No. 001-12002);
o Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2000, filed with the SEC on May 15, 2000;
o Our Quarterly Report on Form 10-Q for the quarter ended June 30,
2000, filed with the SEC on August 14, 2000;
o Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000, filed with the SEC on November 14, 2000;
o Our Definitive Proxy Statement on Schedule 14A, filed with the
SEC on August 22, 2000;
o Our Definitive Proxy Statement on Schedule 14A, filed with the
SEC on April 28, 2000;
o Our Amended Current Report on Form 8-K filed with the Commission
on January 18, 2000;
o Our Amended Current Report on Form 8-K filed with the Commission
on February 25, 2000;
o Our Amended Current Report on Form 8-K filed with the Commission
on April 13, 2000;
o Our Current Report on Form 8-K filed with the Commission on May
5, 2000;
o Our Amended Current Report on Form 8-K filed with the Commission
on June 16, 2000;
o Our Current Report on Form 8-K filed with the Commission on
September 11, 2000;
o Our Current Report on Form 8-K filed with the Commission on
September 18, 2000; and
o Our Current Report on Form 8-K filed with the Commission on
November 1, 2000.
You may request a copy of these filings (not including the exhibits to
such documents unless the exhibits are specifically incorporated by reference in
the information contained in this prospectus), at no cost, by writing or
telephoning us at the following address:
Ian H. Kennedy, Corporate Counsel
JAWZ INC.
400, 630 - 8th Avenue S.W.,
Calgary, Alberta T2P 1G8
Telephone requests may be directed to (403) 508-5055
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document.
Statements contained in this prospectus as to the contents of any
contract or document are not necessarily complete and in each instance reference
is made to the copy of that contract or document filed as an exhibit to the
registration statement or as an exhibit to another filing, each such statement
being qualified in all respects by such reference and the exhibits and schedules
thereto.
15
<PAGE>
<TABLE>
<CAPTION>
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<S> <C>
We have not authorized any dealer, salesperson or other
person to give you written information other than this
prospectus or to make representation as to matters not
stated in this prospectus. You must not rely on ---------------------
unauthorized information. This prospectus is not an
offer to sell these securities or our solicitation of
your offer to buy the securities in any jurisdiction
where that would not be permitted or legal. Neither the
delivery of this prospectus nor any sales made hereun- 25,184,862
der after the date of this prospectus shall create an
implication that the information contained herein or
the affairs of JAWZ Inc. have not changed since the
date hereof.
TABLE OF CONTENTS JAWZ Inc.
Page
----
Prospectus Summary..................... 2 Prospectus
Risk Factors........................... 4
Use of Proceeds........................ 10
Selling Stockholders................... 10
Plan of Distribution................... 13
Legal Matters.......................... 14 January 10, 2001
Experts................................ 14
Where you can find Additional ---------------------
Information......................... 14
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</TABLE>
