<PAGE>
RULE 424(b)(3)
FILE NO. 333-66149
PROSPECTUS
4,167,833 SHARES
THE TITAN CORPORATION
COMMON STOCK
________________
The stockholders of The Titan Corporation listed below are offering and
selling 4,167,833 shares of Titan Common Stock under this prospectus.
All of the selling stockholders acquired their shares of Titan Common Stock
on August 24, 1998, by virtue of a merger of Merger Acquisition Sub, a wholly
owned subsidiary of Titan, with and into VisiCom Laboratories, Inc.
The selling stockholders may offer their Titan stock through public or
private transactions, on or off the New York Stock Exchange, at prevailing
market prices or at privately negotiated prices.
Titan stock is listed on the New York Stock Exchange and trades on the
exchange with the ticker symbol "TTN." On October 21, 1998, the closing price
of one share of Titan Common Stock on the New York Stock Exchange was $5.125.
________________
THE TITAN SHARES OFFERED OR SOLD UNDER THIS PROSPECTUS
INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
________________
THE TITAN SHARES OFFERED OR SOLD UNDER THIS PROSPECTUS HAVE NOT BEEN APPROVED BY
THE SEC OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS DECEMBER 9, 1998
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THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE SEC. THE
REGISTRATION STATEMENT INCLUDES EXHIBITS AND ADDITIONAL INFORMATION NOT INCLUDED
IN THE PROSPECTUS.
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE YOU ANY SUPPLEMENTAL INFORMATION OR
MAKE ANY REPRESENTATIONS FOR US. YOU SHOULD NOT RELY UPON ANY INFORMATION ABOUT
TITAN THAT IS NOT CONTAINED IN THIS PROSPECTUS OR IN ONE OF TITAN'S PUBLIC
REPORTS FILED WITH THE SEC AND INCORPORATED INTO THIS PROSPECTUS. INFORMATION
CONTAINED IN THIS PROSPECTUS OR IN TITAN'S PUBLIC REPORTS MAY BECOME STALE. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE OR
COMPLETE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS. WE
ARE NOT MAKING AN OFFER OF SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED.
THE COMPANY
GENERAL INFORMATION
The Titan Corporation is a state-of-the-art information technology products
and services company serving commercial and government customers. We have
organized our business into four core groups and a fifth emerging technologies
group. Our Communications group (through Linkabit Wireless) offers advanced
satellite ground terminals, satellite voice/data modems, networking systems and
other products used to provide bandwidth-efficient communications. Our Software
Systems subsidiary is a systems integrator that provides a broad range of
information technology services and solutions for commercial and non-defense
government customers
In our Information Technology group, we use our expertise in large data
management, communications and knowledge-based systems to provide services and
solutions to the defense and intelligence communities. Since January 1, 1998,
we have purchased five defense information technology companies and we continue
to look for new acquisition opportunities. We believe that these acquisitions
will enhance our ability to compete in a consolidating part of the defense
market.
We endeavor to commercialize technologies developed in our defense
business. One example is our Medical Sterilization and Food Pasteurization
business. This business sells turnkey sterilization systems and provides
sterilization services on an outsourcing basis for medical device manufacturers.
Our executive offices are located at 3033 Science Park Road, San Diego,
California 92121, and our telephone number is (619) 552-9500. We were
incorporated in 1969.
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RECENT ACQUISITIONS
Since January 1, 1998, Titan or one of its wholly owned subsidiaries has
acquired the stock of the following information technology companies on the
terms described in the following chart:
<TABLE>
<CAPTION>
DATE
COMPANY GENERAL NATURE OF ACCOUNTING ACQUISITION
ACQUIRED BUSINESS PURCHASE PRICE TREATMENT COMPLETED
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DBA Systems defense imaging systems 6,110,765 shares of Titan common Pooling 2/27/98
and electro-optical stock; plus options for 395,698
systems shares of Titan common stock
- -----------------------------------------------------------------------------------------------------------
Validity defense consultant $12 million cash, $3 million in notes Purchase 3/31/98
Corporation at prime rate and assumption of
transaction expenses
- -----------------------------------------------------------------------------------------------------------
Horizons software development, 3,173,214 shares of Titan common Pooling 6/30/98
Technology systems integration and stock; plus options for 10,285
consulting shares of Titan common stock
- -----------------------------------------------------------------------------------------------------------
VisiCom communication services, 4,167,833 shares of Titan common Pooling 8/24/98
Laboratories image enhancement stock; plus options for 593,171
software, ground-based shares of Titan common stock
commercial satellite
equipment
- -----------------------------------------------------------------------------------------------------------
Delfin software, computer approximately 3,686,667 shares of Pooling 10/23/98
Systems systems and network Titan common stock; plus options
integration, consulting for approximately 835,894 shares
and signals intelligence of Titan common stock
electronics hardware
- -----------------------------------------------------------------------------------------------------------
</TABLE>
3.
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RISK FACTORS
INVESTMENT IN TITAN SHARES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER THE FOLLOWING DISCUSSION OF RISKS AS WELL AS OTHER INFORMATION IN THIS
PROSPECTUS BEFORE PURCHASING ANY TITAN SHARES.
EXCEPT FOR HISTORICAL INFORMATION, THE INFORMATION CONTAINED IN THIS
PROSPECTUS AND IN OUR SEC REPORTS ARE "FORWARD LOOKING" STATEMENTS ABOUT ARE
EXPECTED FUTURE BUSINESS AND PERFORMANCE. OUR ACTUAL OPERATING RESULTS AND
FINANCIAL PERFORMANCE MAY PROVE TO BE VERY DIFFERENT FROM WHAT WE MIGHT HAVE
PREDICTED AS OF THE DATE OF THIS PROSPECTUS. THE RISKS DESCRIBED BELOW ADDRESS
SOME OF THE FACTORS THAT MAY AFFECT OUR FUTURE OPERATING RESULTS AND FINANCIAL
PERFORMANCE.
ABILITY TO IMPLEMENT SPIN-OUT STRATEGY. Our defense business generates
technologies that we believe we can exploit through commercial businesses.
Since the startup and expansion costs for commercial businesses are high, we
adopted a strategy for funding our commercial businesses through capital
markets. We have reorganized our businesses into focused subsidiaries and we
intend, when market and other conditions permit, to fund these operations by
selling minority equity interests to public investors. We refer to these
transactions as "spin-outs" of our subsidiaries. Although other companies have
successfully used this strategy, we have not yet proven that we can spin-off
minority interests in our subsidiaries and we may fail to for a variety of
reasons. We stopped the IPO process for our first candidate, Linkabit Wireless,
primarily because of adverse changes in its Asian product markets. Other
reasons may include market conditions for IPOs generally and technically
companies in particular or our inability to develop commercial businesses that
are attractive to public investors. Even if we complete one or more spin-offs
and raise capital to expand our commercial businesses, this strategy may not
improve our financial performance or result in higher Titan stock prices.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY. Since January 1, 1998, we have
acquired five defense information technology companies as part of our
consolidation strategy for our defense business. All but one of these
transactions was structured as a stock for stock pooling of interest
transaction. The acquisition and integration of new companies involves risk.
While we believe that each of our recent acquisitions will improve our earnings
per share and enable us to compete more effectively for defense contracts, the
integration of these businesses may cost us in the short run. We may need to
divert more management resources to integration than we planned. This diversion
may adversely affect our ability to pursue other more profitable activities. In
addition, we may not eliminate as many redundant costs as we anticipated in
selecting our acquisition candidates. One or more of our acquisition candidates
also may have liabilities or adverse operating issues that we failed to discover
through our diligence prior to the acquisition. Consequently, our recent
acquisitions may not improve our financial performance in the short or long term
as we expect them to do.
We intend to continue to look for complementary businesses or technologies to
acquire so that we can expand our core businesses. However, we may not find any
more attractive candidates or may find that the acquisition terms are not as
favorable as our prior acquisitions. Continuing instability in the U.S.
securities markets and volatility in our stock price may make acquisitions with
stock more expensive. We also may not adequately access the risks inherent in a
particular acquisition candidate or correctly access the candidate's potential
contribution to our financial performance. Accordingly, our acquisition
strategy may not result in higher earnings per share and could weaken our
overall financial performance.
DEPENDENCE ON GOVERNMENT CONTRACTS. We earn a substantial portion of our
revenues from government contracts. During our fiscal years 1997, 1996 and
1995, our revenues from U.S government business represented approximately 72%,
76% and 62% of our total revenues. With our five new acquisitions, we expect
this percentage to rise in our current fiscal year. Although we bid for and are
awarded long term government contracts and subcontracts, the government only
funds these contracts on an annual basis. The government may cancel these
contracts at any time without penalty or may change its requirements or its
contract budget. The U.S. Congress may decline to appropriate funds needed to
complete the contracts awarded to Titan or the prime contractor. On our
subcontracts, we generally do not control the prime contractor's allocation of
resources. We also depend upon the prime contractor to perform its obligations
on the primary government contract. Any cancellations or modifications
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of our significant contracts or subcontracts could hurt our financial
performance in the short or long term. Continuing declines in U.S. defense and
other federal agency budgets also may hurt our ongoing prospects.
Our government contracts are subject to cost audits by the government. These
audits may occur several years after completion of the audited work. Audits may
result in a recalculation of contract revenues or result in the government
refusing to reimburse some of our contract costs and fees. Generally, we
resolve audit issues by negotiation without material adjustments. However, in
the future, we could have a material adjustment to revenue as a result of an
audit, including an audit of one of the companies we have recently acquired.
Some of the recently acquired companies did not impose as rigorous internal
controls as we imposed on the government contracts we performed.
Finally, many of our contracts are fixed price contracts. Under these
contracts, we bear the risk of any cost overruns and our profits are adversely
affected if our costs exceed the assumptions we used in bidding for the
contract.
FLUCTUATIONS IN RESULTS OF OPERATIONS. Our quarterly and annual financial
performance has historically fluctuated and may continue to fluctuate
significantly in the future. Our revenues are affected by factors such as the
unpredictability of sales and contract awards due to long procurement process
for most of our products and services, defense and intelligence budgets,
competition and general economic conditions. Our product mix and unit volume,
our ability to keep expenses within budgets, our distribution channels and our
pricing affect our gross margins. These factors and other risks discussed in
this section may adversely affect our financial performance within a period.
Consequently, we do not believe that comparison of our financial performance
from period to period is necessarily meaningful or predicative of our likely
future performance.
ABILITY TO COMMERCIALIZE NEW TECHNOLOGIES. In 1991, we adopted a strategy of
seeking to develop commercial businesses using technology developed in our
defense businesses. Our commercial businesses, including our medical
sterilization business, are in an early stage of development. These technology-
based businesses are subject to risks inherent in early stage startup companies.
One of our challenges is ensuring that these businesses have adequate capital to
fund their growth. At the inception of this strategy, we used cash generated
through our defense business to fund the substantial startup and expansion
costs. This practice cost us short term profitability in prior years. We have
since modified our financing strategy and are seeking funding from external
sources through minority spin-offs described above or through sales of majority
interests in earlier stage technologies that require substantial business
development. However, external funding may not be available and we may be
unable or chose not to fund these businesses through our operations. Lack of
adequate capital could cause one or more of these businesses to fail or cause us
to sell a business.
These businesses are also subject to a high degree of competition and a risk
of technical obsolescence if we fail to respond to rapid technological changes.
Each of these businesses face market and operating risks that are unique to the
particular business. We have a limited history of commercializing new
technologies and ultimately may not succeed in creating new commercial
businesses that positively contribute to our profitability.
MARKET ACCEPTANCE OF FOOD PASTEURIZATION. Our Medical Sterilization and Food
Pasteurization group is attempting to develop food pasteurization as a new
market for its E-Beam sterilization process. Because food pasteurization or
irradiation has yet to gain consumer acceptance, we do not know whether a viable
new market will develop or grow. Unless meat producers and large-scale sellers
such as chain restaurants decide to pasteurize or purchase pasteurized meat,
this market is unlikely to develop. If the market does develop, our technology
will compete against other technologies now used to sterilize medical
instruments and our business may not win a substantial share of this market.
RISK OF INTERNATIONAL OPERATIONS. Our subsidiary, Linkabit Wireless, sells
its communications products primarily in foreign countries with large rural
areas, particularly in Indonesia. Although Linkabit Wireless generally sells its
products in U.S. dollars, the recent currency devaluations and adverse market
conditions in Indonesia and other Asian countries has negatively affected demand
for Linkabit's products and our revenues for this segment. Our communications
products generally require substantial capital investments, and our potential
customers have
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not had the capital resources to make these investments. We have assisted
our established marketing partner in Indonesia by extending some trade credit
that has subsequently been extended with installments due over an additional
two years. Because of market conditions in Indonesia and other factors,
there is a risk that our customer may not be able to pay this debt in
accordance with the extended terms. Further, we do not have the capital
resources and risk tolerance to finance the purchase of our communications
products. As a result, revenues in this group may decline until economic
conditions in the Pacific Rim region begin to improve.
Selling products or services in international markets also entails other
market, economic, cultural, legal and political risks, conditions and expenses.
These risks include trade barriers, export and import restrictions and other
applicable laws, political and economic instability, difficulties in collecting
amounts owed to Titan and difficulties in managing overseas employees and
contractors. Any one of these factors or other international business risks
could adversely affect our financial performance.
COMPETITION. Our defense and our commercial businesses are highly
competitive. We believe we must continue to expand our defense information
technology business so that we can remain price competitive and compete for
larger contracts. For that reason, we are continuing to look for other
acquisition candidates. Our commercial businesses compete against other
technologies as well as against companies with similar products. In order to
remain competitive, we must invest to keep our products technically advanced and
compete on price and on valued added to our customers. Our ability to compete
may be adversely affected by limits on our capital resources and our ability to
invest in maintaining and growing our market share. Any adverse financial
developments could make us a less effective competitor. Many of our competitors
are larger, better financed and better known companies who may compete more
effectively than we are able to compete.
RELIANCE ON STRATEGIC RELATIONSHIPS. Since the primary markets for Linkabit
Wireless products are in more rural developing countries, we have formed
strategic arrangements with local partners to develop and expand this business.
Linkabit Wireless has a strategic arrangement with its customer PT. Pasifik
Satelit Nusantra for sales of products in Asian countries where PSN has
installed satellites. Similarly, Linkabit Wireless is part of a consortium led
by Alcetel Telespace, pursuant to which the companies pursue symbiotic successes
in new markets. We cannot guarantee that we can maintain these strategic
alliances or develop new strategic alliances to expand our marketing networks
for Linkabit's products. Without these alliances and improved economic
conditions in our target markets, our development of robust commercial markets
for our communication products may be delayed or fail.
CUSTOMER CONCENTRATION WITHIN BUSINESS SEGMENTS. Some of our businesses rely
upon a small number of customers for a large portion of their revenues. For
example, the U.S. Navy purchases a large percentage of Linkabit Wireless's
Mini-DAMA product and the Federal Aviation Administration purchases a large
portion of our non-defense software services. Because of customer
concentrations, we are vulnerable to adverse changes in our revenues and overall
financial performance if any one of our significant customers delays or cancels
any planned or expected purchases.
GOVERNMENT REGULATIONS. Like most businesses, our defense and commercial
businesses must comply with or affected by various government regulations.
These regulations affect how our customers and we can do business and, in some
instances, impose added costs to our businesses. For example, the FDA regulates
how we sterilize medical devices and regulates our customer's packaging of these
devices. Any changes in applicable laws could adversely affect the financial
performance of the business affected by the changed regulations. Any failure to
comply with applicable laws could result in material fines and penalties or
affect how we do business in the future.
DEPENDENCE UPON SUPPLIERS; SOLE AND LIMITED SOURCES OF SUPPLY. Our internal
manufacturing capacity is limited so we use contract manufacturers. While we
use care in selecting our manufacturers, this arrangement gives us less control
over the quality and price of products or components than if we manufactured
them ourselves. In some cases, we obtain products from a sole supplier or a
limited group of suppliers. Consequently, we risk disruptions in our supply of
key products and components if our suppliers fail or are unable to perform
because of strikes, natural disasters, financial condition or other factors.
Any material supply disruptions could adversely affect our revenues and our
ongoing product cost structure.
6.
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LIMITED INTELLECTUAL PROPERTY PROTECTION; DEPENDENCE ON PROPRIETARY
TECHNOLOGY. As a policy, we seek to protect our proprietary technology and
inventions through patents, copyrights, trade secret law and other legal
protections. While our patent portfolio is valuable, our financial success
ultimately depends upon our ability to deliver products and services that meet
customer needs, not on intellectual property laws. We may, however, incur
significant expense in both protecting our intellectual property and in
defending or assessing claims with respect to intellectual property owned by
others. Any patent or other infringement litigation by or against Titan could
have an adverse effect on our financial performance. We also could be forced to
modify or abandon one or more planned or current products based upon our
assessment of intellectual property risks or actual or threatened claims by
other companies.
RELIANCE ON KEY PERSONNEL. We are a technology-driven company and we need to
maintain a workforce of highly qualified technical and management personnel,
including engineers, computer programmers and management personnel with security
clearances required for the Titan's classified work. Our employees generally
have many other job opportunities. Consequently, we strive to maintain an
entrepreneurial work environment and provide financial incentives to attract and
retain our key personnel. The loss of any key personnel could negatively affect
our financial performance.
VOLATILITY OF STOCK PRICE. As of the date of this prospectus, we have a
market capitalization of approximately $165 million. Like other smaller
capitalization, technology companies, our stock price has fluctuated
significantly at times and is subject to a risk of ongoing volatility. The
price of Titan shares may be adversely affected by our financial performance or
the performance of our competitors, the market for technology company stocks,
the market for small cap company stocks, general economic trends or other
factors that we cannot predict or control.
IMPACT OF THE YEAR 2000 ISSUE. We have implemented a Year 2000 compliance
program to address our current hardware and software products and development
tools and all of our major computing information systems networks, desktop
systems and infrastructure. In addition, we are contacting business associates
such as our third party vendors, business partners, contractors and service
providers to assess their level of readiness.
Our Software Systems group provides Year 2000 services to other companies so
we are using internal expertise to develop and implement our program. We are
using the same common project methodologies that we use for our customers'
programs. We are in the process of assessing whether all of our business unit
product and services are Year 2000 compliant. Because we are an information
technology company, we have been sensitive to Year 2000 issues for a number of
years. We do not expect our current products or services to have material Year
2000 issues. In some cases, our government customers have contracted with us to
modify our older products to be Year 2000 compliant. Our products are not sold
under extended warranties so we do not expect that we will have to spend any
material amounts to make any of our prior products Year 2000 compliant.
However, we are in the process of assessing all of our products, including the
products of our recently acquired businesses and we cannot be certain that Year
2000 issues will not arise.
As part of the program, we are reviewing all of the internally developed and
third party software that we use for accounting, manufacturing process and other
business functions. Because of our history of acquisitions, we have a number of
business units that use different systems; some of which we know are not Year
2000 compliant. Based upon our assessment, we may elect to move business units
to other Year 2000 complaint systems that we currently use as part of an overall
plan to consolidate the number of different systems being used. We estimate the
cost of moving business units to new systems will range from $3 million to $5
million of which only approximately 30%, is related to the replacement of
non-compliant systems. Some of our business units may use internal resources to
convert legacy application systems to be Year 2000 compliant. Finally, many of
our government contracts related business units use an accounting package that
is not currently Year 2000 compliant. We understand that our supplier will
release a Year 2000 compliant version during the fourth quarter of 1998. Under
our maintenance agreement, we will receive the upgrade at no cost. We expect to
incur any material Year 2000 related costs during fiscal year 1999. These costs
could have a material adverse effect on our financial position, results of
operations or cash flows. If we cannot timely correct all Year 2000 problems,
these problems also may cause material adverse effects on our financial
position, results of operations or cash flows.
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After we complete the assessment of our Year 2000 readiness, we plan on
developing contingency plans in the event that our internal systems or our third
party business associates' systems are not timely corrected.
Finally, we have formed a Year 2000 steering committee to monitor
implementation of our overall program and the plans of each of the business
units. Each of business units has formed steering committees to develop and
implement compliance plans.
ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS; RIGHTS PLAN. Our
corporate charter documents include safeguards against the removal and
replacement of our Board of Directors or a hostile takeover of our company. We
also have adopted a stockholder rights plan, commonly called a poison pill,
which is intended to discourage a hostile takeover attempt. These provisions
could depress any premium that could be paid to stockholders to acquire a
controlling interest in Titan.
ADDITIONAL SHARES TO BE ISSUED BY THE COMPANY; SHARES ELIGIBLE FOR FUTURE
SALE. As of October 23, 1998 we have 100 million authorized shares of common
stock, of which the following are outstanding or reserved for issuance under
outstanding options, warrants or convertible securities that were outstanding as
of September 30, 1998:
31,870,628 common shares
962,530 treasury shares
11,183,416 reserved for issuance
The foregoing outstanding shares do not include the 4,167,833 shares of
Common Stock to be issued to the former shareholders of VisiCom or the
approximately 3,686,667 shares to be issued to the former shareholders of
Delfin Systems. Most of the outstanding shares may be sold publicly through
the New York Stock Exchange. The volume of Titan shares traded during any
period may positively or negatively affect the stock price. Many of the
shares issued in connection with our recent acquisitions were issued to
founders and entrepreneurs of the acquired companies who may have a
substantial portion of their net worth in Titan shares and may be motivated
to sell shares to diversify their portfolio risk. An increase in the volume
of shares offered for sale could depress the price of our stock.
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USE OF PROCEEDS
All net proceeds from the sale of Titan shares will go to the
stockholders who offer and sell their shares. Accordingly, Titan will not
receive any proceeds from sales of the Titan shares.
SELLING STOCKHOLDERS
Titan agreed under its Agreement and Plan of Merger and Reorganization
dated August 7, 1998 among Titan, Merger Sub and VisiCom Laboratories, Inc. to
use best efforts to register the Titan Shares issued to the selling stockholders
and to keep the registration statement effective for 12 months, or, if earlier,
the completion of the offering. Our registration of the Titan Shares does not
necessarily mean that the selling stockholders will sell all or any of the
shares.
The shares listed below represent all of the shares that each of the
selling stockholders were issued in the merger with VisiCom Laboratories or may
own upon the release of shares from an escrow. Under escrow agreements dated
August 24, 1998, 10% of the shares issued to the selling stockholders were
deposited into escrow. Titan may use the escrowed shares to satisfy our
indemnification claims if there is a breach of certain representations and
warranties made in the Agreement and Plan of Merger and Reorganization:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
PRIOR TO OFFERING AFTER OFFERING(2)
--------------------- SHARES -------------------
BEING
SELLING STOCKHOLDER NUMBER PERCENT(1) OFFERED NUMBER
- ----------------------------- -------- ---------- --------- -------------------
<S> <C> <C> <C> <C>
CLM2, Inc. (3) 1,582,380 4.85% 1,582,380 0
Clifton Cooke, Jr. (4) 684,980 2.10% 604,980 80,000
Scott R. Laidig (5) 581,541 1.78% 493,791 87,750
VisiCom Savings Plan & Trust 272,497 * 272,497 0
Charles C.Schooler (6) 249,969 * 249,969 0
Gene Kennon 117,331 * 17,202 100,129
Michael Mollin (9) 100,595 * 10,595 90,000
Gayle Piret 96,552 * 96,552 0
Robert Babbush (8) 87,096 * 21,996 65,100
Clifton Cooke, Sr. 78,640 * 53,640 25,000
Eli Warsawski (6) 72,316 * 72,316 0
Julius Perl 72,316 * 72,316 0
Nissim Shani 72,316 * 72,316 0
Antares Group, Inc. (7) 67,050 * 67,050 0
John Bicknas 61,897 * 9,065 52,832
Colin Hirayama 54,145 * 37,995 16,150
Rob Holmes 51,735 * 39,713 12,022
Cohen Insurance Employee 44,700 * 44,700 0
Retirement Fund
Joseph J. Cohen 44,700 * 44,700 0
Karl T. Gould 44,700 * 44,700 0
Carol M. Jaxon 35,760 * 35,760 0
Tim Elsmore 35,020 * 7,509 27,511
Paul Shatz Trust 27,673 * 27,673 0
William Dedman 25,662 * 16,326 9,336
9.
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Kathleen Bescher 25,080 * 25,080 0
John Bloomquist 23,909 * 23,284 625
Karl and Laura Kail 23,500 * 23,500 0
Ed Ries 19,892 * 19,892 0
Ted Mackay 19,698 * 19,968 0
Wendy Scott Reitherman 17,880 * 17,880 0
Mark Winkler 12,584 * 9,834 2,750
Bingham, Dana, Gould 10,920 * 10,920 0
Larry White 10,519 * 7,009 3,510
James and Janice Kerr 8,872 * 8,872 0
Glenn Jackson 8,194 * 6,527 1,667
Terrence Nelson 2,235 * 2,235 0
Jim Treadwell 2,221 * 1,596 625
</TABLE>
* Represents less than one percent.
(1) Applicable percentage of ownership is based on 31,870,628 shares of Common
Stock outstanding on September 30, 1998 (excluding the shares to be issued
to the selling shareholders and the former shareholders of Delfin Systems
as merger consideration).
(2) Assumes that each selling shareholder elects to sell all shares offered.
(3) The stockholder owes Titan's wholly owned subsidiary, VisiCom Laboratories,
$4.6 million, payable on February 7, 1999. 1,950,000 Titan shares owned by
the stockholder secure the note and are the sole recourse in the event of a
default. The stockholder had a representative on VisiCom's board prior to
the merger.
(4) The stockholder is now the Executive Vice President for Corporate
Development of Titan and continues to be the Chief Executive Officer and a
director of VisiCom, which he founded. Mr. Cooke is the son of Clifton
Cooke, Sr. who is also a selling stockholder.
(5) The stockholder is a Vice President of VisiCom.
(6) The stockholder was a director of VisiCom prior to the merger.
(7) The stockholder had a representative on VisiCom's board prior to the
merger. The stockholder licenses technology to VisiCom and receives
royalty and other payments.
(8) The stockholder is a Vice President and Secretary of VisiCom.
(9) The stockholder is the Chief Financial Officer and Treasurer of VisiCom.
PLAN OF DISTRIBUTION
The selling stockholders may offer their Titan Shares at various times in one
or more of the following transactions:
- on the New York Stock Exchange or any other exchange where our common stock
is listed;
- in the over-the-counter market;
- in negotiated transactions not on an exchange or over-the-counter;
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- in connection with short sales of Titan shares;
- by pledge to secure debts or other obligations;
- in connection with the writing of call options, in hedge transactions and
in settlement of other transactions; or
- in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
The selling stockholders may use broker-dealers to sell their shares. If
broker-dealers are used, they will either receive discounts or commissions from
the selling stockholder, or they will receive commissions from the purchasers of
shares for whom they acted as agents.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on
public reference rooms. Our SEC filings are also available to the public from
the SEC's Website at http://www.sec.gov. We also have a Website at
http://www.titan.com with links to our SEC filings.
The SEC allows us to "incorporate by reference" this information we file with
them. This 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. 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 make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
1. Annual Report on Form 10-K/A for the fiscal year ended December 31, 1997;
2. Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31,
1998;
3. Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998;
4. Proxy Statements for the 1998 Annual Meeting of Stockholders held on May
14, 1998 and for a Special Meeting of Stockholders held on October 21, 1998;
5. Current Reports on Form 8-K dated February 26, 1998 and June 30, 1998, as
amended by Current Report on Form 8K/A; and
6. Registration Statement on Form S-4 (No. 333-60122) filed on September 24,
1998.
DESCRIPTION OF CAPITAL STOCK
As of the date of this prospectus, our Certificate of Incorporation
authorizes us to issue 100,000,000 shares of common stock and 2,500,000 shares
of preferred stock, including 694,872 shares of Cumulative Convertible
Preferred. As of September 30, 1998, 31,870,628 shares of common stock and
694,872 shares of Cumulative Convertible Preferred were outstanding. The Board
of Directors may issue shares of the preferred stock at any time, in one or more
series without stockholder approval. The Board of Directors determines the
designation, relative rights, preferences and limitations of each series of
preferred stock.
Each share of Cumulative Convertible Preferred has a liquidation preference
of $20 per share plus unpaid dividends and each share of Series B Preferred has
a liquidation preference of $6 per share plus unpaid dividends.
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Each share of Cumulative Convertible Preferred is entitled to dividends at
the rate of $1 per share per year with dividends paid quarterly. Subject to the
rights of our preferred stockholders, our common stockholders have the right to
receive dividends that our Board of Directors declares in the form of cash,
securities or property.
We may redeem the Cumulative Convertible Preferred at any time for $20 per
share. The holders may convert each share of Cumulative Convertible Preferred
into two-thirds of one share of common stock (subject to anti-dilution
adjustments).
Common stockholders have the right to vote one vote per share on all
matters that require their vote. This could change if we amend our charter
documents. Holders of Cumulative Convertible Preferred Stock are entitled to
one-third vote for each share of preferred and vote together with common stock
on all matters submitted to the common stockholders. Holders of Series B
Preferred are entitled to one vote for each share of preferred and vote together
with common stock on all matters submitted to the common stockholders.
On August 17, 1995, our Board of Directors adopted a Shareholder Rights
Plan or poison pill and distributed rights to purchase Series A Junior Preferred
Stock for each of our outstanding shares of common stock. The rights become
exercisable if a person or group acquires, in a transaction not approved by our
Board of Directors, 15% or more of our common stock or announces a tender offer
for 15% or more of our common stock.
Our transfer agent for the common stock is American Stock Transfer and
Trust Company.
LEGAL MATTERS
For purposes of this offering, Cooley Godward LLP, San Diego, California,
is giving it opinion on the validity of the shares.
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EXPERTS
The consolidated financial statements of The Titan Corporation as of
December 31, 1997 and 1996, and for each of the three years in the period
ended December 31, 1997 and the consolidated financial statements of Horizons
Technology, Inc. as of January 31, 1998 and 1997, and for each of the three
years in the period ended January 31, 1998, incorporated by reference in this
prospectus and registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated by reference herein in reliance upon
the authority of said firm as experts in giving said reports.
The consolidated financial statements of DBA Systems, Inc., as of June 30,
1997 and 1996, and for each of the three years in the period ended June 30, 1997
incorporated by reference in this prospectus and registration statement have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
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