Registration No. 333 -
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT
ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
MARK SOLUTIONS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 11-2864481
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(State of Incorporation) (IRS Employer Identification Number)
1515 Broad Street Parkway Technical Center
Bloomfield, New Jersey 07003
(973) 893-0500
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(Address, including Zip Code and Telephone Number
of Registrant's Principal Executive Offices)
Carl Coppola, President
Mark Solutions, Inc.
1515 Broad Street
Bloomfield, New Jersey 07003
(973) 893-0500
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(Name, Address, including Zip Code, and Telephone Number of Agent for Service)
A copy to:
Timothy J. McCartney, Esq.
9 Elsa Way
Richboro, Pennsylvania 18954
(215) 396-7156
Calculation of Registration Fee
- --------------------------------------------------------------------------------
Title of Each Amount to be Proposed Proposed Amount of
Class of Registered (1) Maximum Maximum Registration
Securities to be Offering Price Aggregate Fee (1)
Registered
- --------------------------------------------------------------------------------
Common Stock,
$.01 par value 1,062,500 $3.21875 $3,419,922 $1,128.58
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(1) Also registered hereby pursuant to Rule 416 are such additional
indeterminate shares of Common Stock or other securities as may become issuable
by reason of stock splits or other adjustments pursuant to antidilution
provisions.
(2) Estimated solely for purposes of calculating the registration
fee pursuant to Rule 457(c) based on the last sales price as reported on Nasdaq
within the prior five days.
[COVER PAGE 1 OF 2 PAGES]
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Approximate date of proposed sale to the public:
As soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [XX]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act Registration Statement number of the earlier effective
registration statement for the same offering. [ ]________________ .
If this Form is a post effective amendment filed pursuant to Rule 462(c) under
the Securities Act, please check the following box and list the Securities Act
registration Statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ].
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
[COVER PAGE 2 OF 2 PAGES]
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Prospectus
MARK SOLUTIONS, INC.
1,062,500 Shares of Common Stock
Mark Solutions, Inc. sells modular steel cells for correctional institution
construction and develops software applications under the name "IntraScan II"
for medical diagnostic, picture archiving and communication computer systems
(PACS).
This Prospectus relates to the sale of
o Up to 350,000 shares of Mark Common Stock, $.01 par value,
which may be issued upon the conversion of Series D Preferred
Stock, $10.00 par value issued in October 1999 (See "Series D
Preferred Stock") and the payment of dividends on the Series D
Preferred Stock;
o 562,500 shares of Common Stock issuable in connection with the
previous conversion of debentures; and
o 150,000 shares issued in connection with the settlement of
litigation.
This Prospectus is part of a registration statement filed with the
Securities and Exchange Commission. Mark is obligated to keep the Registration
Statement effective until November 1, 2001.
All of the Shares may be sold by the person(s) listed in the Section
"Selling Shareholders" or by their transferees from time to time in the open
market or in privately negotiated transactions at prices acceptable to the
seller. See "Plan of Distribution". Mark will receive no proceeds from the sale
of the Shares. Mark is bearing all costs (except for commissions) related to the
Registration Statement.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. You should carefully
consider the "Risk Factors" beginning on page 5 when determining whether to
purchase any of the Shares.
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"MSOL". On December 16, 1999, the closing sales price of the Common Stock was
$3.21875 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISSAPPROVED OF THESE SECURITIES OR PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is December **, 1999.
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You should only rely on the information contained or incorporated by reference
in this Prospectus. No one has been authorized to provide you with additional or
different information.
The Shares are not being offered in any jurisdiction where an offer is not
permitted.
You should assume the information in this Prospectus or any supplement is
accurate as of any date other than the date of the document.
TABLE OF CONTENTS
Page
----
Forward Looking Statements . . . . . . . . . . . . . . . 2
Summary . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . 4
Summary Selected Financial Data . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . 5
Series D Preferred Stock . . . . . . . . . . . . . . . . 10
Selling Shareholders . . . . . . . . . . . . . . . . . . 13
Plan of Distribution . . . . . . . . . . . . . . . . . . 14
Legal Matters . . . . . . . . . . . . . . . . . . . . . . 15
Experts . . . . . . . . . . . . . . . . . . . . . . . . . 15
Where You Can Find More Information . . . . . . . . . . . 16
FORWARD LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference in the
Prospectus contain forward-looking statements within the of the Private
Securities Litigation Reform Act of 1995. These statements are made on current
plans and expectation of Mark and involve risks and uncertainties that could
cause actual future activities and results of operations to be materially
different from those set forth in the forward-looking statements. Important
factors that could cause actual results to differ include whether modular steel
cell projects and PACS projects are awarded to Mark and the timing of project
completion, meeting current an future financial requirements, competition and
changes in PACS technology. You are cautioned not place undue reliance on these
forward-looking statements, which speak only as of the date on which they were
made.
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SUMMARY
This Summary does not contain all the information provided by this
Prospectus, some of which may be important to you. You should carefully read the
entire Prospectus and incorporated documents before you decide to buy any
Shares.
THE COMPANY
Mark designs, manufactures and installs modular steel cells for
correctional institution construction and develops software application under
the name "IntraScan II" for medical diagnostic, picture, archiving and
communication computer systems (PACS).
Mark markets its modular steel products through public bids and by pursuing
joint ventures and affiliations with other companies to solicit design, build
and/or operate correctional facilities projects both domestically and
internationally. Management believes that nationwide emphasis on easing
overcrowded conditions in correctional institutions presents a significant
growth opportunity; however, there can be no assurance of sustained business.
Mark's modular cells can be manufactured and installed more efficiently
than traditional housing alternatives by virtue of lower labor and construction
costs and shorter installation time.
Mark markets its IntraScan PACS software to radiology departments, large
healthcare facilities, hospitals and outpatient imaging group practices,
primarily through a marketing agreement with Data General Corporation.
Management believes that it can capitalize on the development of the domestic
and international PACS market; however, there can be no assurance that
significant business will develop.
The IntraScan PACS software interfaces with medical imaging devices to
store and recall images digitally from modalities including x-ray, CAT Scan,
MRI, ultrasound, computed radiography and nuclear medicine. The IntraScan PACS
software is "platform independent" allowing the software to operate with most
computer hardware and operating systems.
Mark is a Delaware corporation formed in 1986 under the name "Showcase
Cosmetics, Inc.". Mark's principal executive offices are located at 1515 Broad
Street, Bloomfield, New Jersey 07003 and its phone number is (973) 893-0500.
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RISK FACTORS
The securities of Mark involve a high degree of risk. Mark has historically
had operating losses and related working capital deficiencies. To date, sales of
its modular steel cells has been sporadic and sales of its IntraScan PACS system
have been immaterial. See "Risk Factors" beginning on Page 5.
SUMMARY SELECTED FINANCIAL DATA
The following summary selected financial data is based upon financial
information appearing elsewhere herein and such summary information should be
read in conjunction with such financial statements and notes thereto.
Income Statement Data:
(in thousands, except share and per share data)
Three Months Ended
September 30 Fiscal Years Ended June 30
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1999 1998 1999 1998 1997
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Revenues $3,997 $ 689 $10,226 $ 12,922 $ 6,450
Cost and Expenses 3,835 1,153 12,695 14,913 10,192
Operating Income (Loss) 163 (464) (2,469) (1,991) (3,742)
Net Other(Expenses) (30) (38) (241) (397) (1,697)
Income Tax Benefit --- --- 1,000 --- ---
Net Income (Loss) 133 (502) (1,710) (2,388) (5,439)
Earnings (Loss)Per Share $.02 ($.10) ($.36) ($.58) ($1.53)
Fully Diluted Income
(Loss) Per Share $.02 ($.10) ($.36) ($.58) ($1.53)
Weighted Average Shares
Outstanding 5,535,999 4,820,419 4,945,257 4,145,101 3,555,402
Weighted Average Fully
Diluted Shares
Outstanding 6,498,742 4,820,419 4,945,257 4,145,101 3,555,402
Balance Sheet Data:
(in thousands, except share and per share data)
Three Months
Ended
September 30 Fiscal Years Ended June 30
------------------- --------------------------------
1999 1999 1998 1997
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Working Capital $ 1,464 $ 1,032 $ 3,077 $ 923
Total Assets 8,444 9,070 5,174 5,432
Current Liabilities 4,663 5,832 999 3,245
Other Liabilities 561 505 1,060 2,340
Temporary Stockholders Equity --- --- 1,220 ---
Stockholders' Equity
(Deficiency) 3,220 2,733 1,895 (153)
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RISK FACTORS
Before you make a decision to purchase any of the Shares, you should
carefully read and consider the following risks.
1. Poor Financial Condition. Mark has significant operating losses and
working capital and liquidity deficiencies over the past several years. Mark had
net losses of $1,710,000 and $2,388,099 for the fiscal years ended June 30, 1999
and 1998. In addition, Mark had an accumulated deficit of $31,917,000 at June
30, 1999. Mark has and will continue to experience financial difficulties unless
there is a significant increase in the sale of modular cells and/or IntraScan
PACS systems. Based on past operating results there can be no assurance that
Mark will be able to operate profitably. Mark's poor financial condition could
adversely affect its ability to raise additional working capital pursuant to
private sales of its securities.
2. Working Capital Requirements. Mark's ultimate success may depend upon
its ability to raise additional working capital by selling equity securities or
obtaining debt financing until its operating results improve. Mark has primarily
met its working capital requirements through private placements of its
securities. Management believes that its available working capital from existing
contracts and from anticipated contracts will be utilized by June 30, 2000. If
Mark needs additional working capital from sources other than its operations, it
will most likely attempt to privately sell additional equity or debt securities.
While Mark has been successful in raising working capital in the past, no
assurance can be given that such sources will be available, or, if available, on
terms satisfactory to Mark.
3. Limited Market and Contract Procedure for Modular Cells. The substantial
majority of Mark's revenues have been from the sale of its modular steel cells
to correctional institutions. Management believes that the steel cells will
continue to represent the majority of Mark's operating revenues for the next two
fiscal years. The correctional institution market presents substantial sales
obstacles. Unless the project is very small, correctional institutions, as a
government agency, must submit proposed projects to public bidding by
prospective suppliers. The purchasing agency is obligated to select from among
the bidders based on objective criteria as compared to private sector purchases
which generally do not require bidding. This public bidding process does not
give Mark the opportunity to convince the purchaser to deal with Mark to the
exclusion of competitors.
Mark currently has contracts for it modular cells aggregating approximately
$11,000,000 in revenue for the period beginning July 1, 1999 to June 30, 2000.
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4. Limited Sales of IntraScan PACS Software. For the three fiscal years
ended June 30, 1999, Mark's IntraScan PACS software revenues totaled $2,103,000.
While Mark believes the domestic and international market for PACS systems is
significant and growing, there can be no assurance that Mark will establish a
material market share and operate its IntraScan business profitably.
5. Bonding Qualifications. Many government construction projects require
vendors like Mark to provide performance and completion bonds as a condition to
participation in a correctional facility bid. Due to Mark's financial condition,
it has generally been unable to obtain bonds without the assistance and
guarantee of its president. Mark has not limited its bidding activity nor lost
any projects due to its limited bonding capacity. However, as Mark is awarded
multiple projects, the inability to obtain bonds may limit the number of
additional projects Mark can pursue and have a material adverse effect on the
operations of Mark.
6. Significant Contracts. For the fiscal year ended June 30, 1999,
$7,127,500 (69.7%) of Mark's revenue was attributable to three modular steel
cell projects. In addition, one of these projects is expected to represent
$2,600,000 in revenue for fiscal 2000.
7. Competition. Mark competes in two industries which are highly
competitive; government construction and computer software.
Due to the use of concrete and other traditional construction methods in
the substantial majority (approximately 90%) of correctional facilities
construction, Mark competes for market share with a number of major national and
regional construction companies in its efforts to convince the purchasing agency
to utilize steel cell construction rather than traditional methods. With respect
to those projects which incorporate modular steel cells in its design criteria,
Mark competes against other regional metal fabricators, some of which have
greater financial resources than Mark. In addition, other sheet metal
manufacturers which have greater financial and marketing resources than Mark
could enter the modular cell business. Accordingly, there can be no assurance
that Mark will be able to successfully compete in the market for modular cells.
With regard to the IntraScan PACS software, other companies, including
several established film and medical equipment manufacturers, which are larger
and better financed than Mark, offer PACS systems and the related software. As
the PACS market develops, other large medical equipment, computer hardware or
software companies could enter the PACS business. Accordingly, there can be no
assurance that Mark will be able to successfully compete in the PACS market.
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8. Rapid Technological Change in the Software Industry; Need for Continued
Product Development. The application software industry is subject to rapid
technological and industry standard changes that can quickly make existing
products less desirable or obsolete. Consequently, Mark is required to
continually develop, update and enhance its IntraScan II software applications
to keep pace with industry changes and to respond to the changing needs of
customers. These efforts require substantial capital investments. While Mark
intends to allocate the necessary resources to the extent available, there can
be no assurance that Mark will not experience difficulties in product
development or that other companies will not develop software applications which
will achieve greater acceptance in the PACS market.
9. Dependence on Key Person. Mark is dependent upon the continued services
of Carl Coppola, its Chairman of the Board, President and Chief Executive
Officer. The loss of Mr. Coppola could have a material adverse effect on Mark.
Mark is the beneficiary of a term life insurance policy of $1,000,000 on the
life of Mr. Coppola.
10. Nasdaq Listing Maintenance Requirements; Recent Trading Prices;
Potential Application of Exchange Act "Penny Stock" Rules. Mark's Common Stock
trades on the Nasdaq SmallCap Market. To be eligible for continued listing of
its Common Stock, Mark is required to maintain, among other things:
o a minimum bid price of $1.00 per share.
o minimum net tangible assets of $2,000,000 or a market
capitalization of $35 million.
If Mark does not maintain its Nasdaq SmallCap Market listing, the liquidity
of the Common Stock would be adversely affected. In addition, Mark's ability to
raise additional working capital through sales of its equity securities would
also be adversely affected. In response to the low trading price of its Common
Stock, Mark effected a 1 for 4 reverse stock split in June 1999 to meet Nasdaq's
minimum bid requirement.
If Mark does not maintain its Nasdaq SmallCap Market listing, Mark's Common
Stock would most likely be a "penny stock" as that term is defined in the
Exchange Act. Brokers effecting transactions in a penny stock are subject to
additional customer disclosure and record keeping obligations, including:
o standardized risk disclosure document about the penny
stock market prior to the transaction.
o current bid and offer quotations for the penny stock.
o the compensation of the broker and its salesperson for
transactions in penny stocks.
o monthly account statements showing the market value of
each penny stock owned by the customer.
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In addition, brokers effecting transactions in a penny stock are also
subject to addition sales practice requirements under Rule 15g-9 of the Exchange
Act including:
o making an individualized written suitability
determination of penny stock investments for each
customer.
o obtaining a prior written agreement for the specific
penny stock purchase.
Because of these additional obligations, certain brokers will not effect
transactions in penny stocks, which could have an adverse effect on the
liquidity of the security and make selling it more difficult.
11. Impact of Conversion Price of Preferred Stock and Debentures on the
Trading Price of Common Stock. Mark currently has outstanding 20,000 shares of
Series D Preferred Stock which are convertible into shares of Common Stock at
the discounted rate of 70% of the market price. These discounted conversion
rights may prevent rises in the trading price of the Common Stock due to the
potential sale of the underlying Common Stock which would be acquired at below
the then current trading price. In June 1998 a holder converted debentures in
the principal amount of $750,000 provided Mark agree to issue additional shares
of Common Stock to the extent the trading price falls below $1.25 on January 31,
2000. This adjustment provision may similarly affect the trading price of the
Common Stock. Because of the discount to the current market price of the Common
Stock, sales of the shares of Common Stock underlying the Preferred Stock may
cause a downward trend in the trading price of the Common Stock until such
shares are sold if the interest to buy the Common Stock by investors is weak.
Based on the closing bid price of Mark's Common Stock on December 16, 1999 of
$3.219, 651,266 shares of Common Stock are issuable on conversion of the
outstanding Preferred Stock and as a result of the debenture adjustment. Because
the conversion of the Preferred Stock is dependent on the price of the Common
Stock at future dates, the actual number of shares of Common Stock which will be
issued in undeterminable, and may exceed the assumed number given above.
12. Subcontractor Credit Risk. Mark's modular steel cells are only one
component of correctional institution projects. Therefore, Mark may not be the
prime contractor on a project, but a subcontractor. Under these circumstances,
Mark usually will not have the direct financial obligation of the government
agency or other purchaser, but will be primarily relying on the prime contractor
regarding payment for its products. This presents a greater credit risk to Mark.
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13. Related Party Transactions; Potential Conflicts of Interests. Mark has
been a party to business transactions with certain officers, Directors or their
affiliates. Mark intends to purchase goods and services in the ordinary course
of business from related parties and may determine based upon circumstances at
that time to engage in additional transactions with officers, Directors,
principal shareholders or affiliates. While Mark believes these transactions
have been on terms no less favorable than could be obtained from unaffiliated
parties, such situations present potential conflicts of interest.
14. No Dividends. Mark has never paid a cash dividend on its Common Stock.
Mark does not intend to pay in the foreseeable future, cash dividends on the
Common Stock but intends to retain any earnings to finance growth.
15. Antitakeover Effects of Authorized and Unissued Preferred Stock. Mark's
Board of Directors have the authority to issue up to 4,705,000 shares of
preferred stock and to determine the price, rights, preferences, privileges and
restrictions including voting rights, of those shares without any further vote
or action by Mark's shareholders. The rights of the holders of Common Stock will
be subject to, and may be adversely affected by the rights of the holders of any
preferred stock that may be issued. The issuance of preferred stock, while
providing flexibility for possible acquisitions and other corporate purposes,
could have the effect of making it more difficult for a third party to acquire a
majority of the outstanding voting stock of Mark. Mark has no present plans to
issue additional shares of Preferred Stock.
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SERIES D PREFERRED STOCK
A portion of the Common Stock being offered under this Prospectus are
issuable upon the conversion of 20,000 shares of Series D Preferred Stock
purchased for $200,000 in a private placement. As of December 17, 1999, all of
the Series D Preferred Stock remained issued and outstanding.
The principal terms of the Series D Preferred Stock are:
Conversion Rights. Each share of D Preferred Stock is convertible, at the
option of the holder, into shares of Common Stock equal to $10.00 per share
divided by 70% of the average per share closing bid price of the Common Stock
for the five trading days immediately preceding the conversion date(s).
Voting Rights. Except as otherwise required by law, the holders of D
Preferred Stock have no voting rights.
Dividends. Each share of Preferred Stock receives a quarterly dividend with
an annual rate of $1.00 per share. The dividends of the Preferred Stock are
payable in cash or Common Stock, at the option of Mark.
Redemption Rights. Mark is not obligated to redeem the D Preferred Stock.
In the event the D Preferred Stock is not converted into Common Stock, Mark may,
at its option, redeem all or a portion of the D Preferred Stock at any time
after September 30, 2000 at $10.00 per share plus accrued dividends.
Liquidation Rights. In the event of any liquidation, the holders of the
Preferred Stock will share equally in any balance of Mark's assets available for
distribution to them up to $10.00 per share plus unpaid dividends, after
satisfaction of creditors and the holders of Mark's senior securities, if any.
Anti-dilution Provisions. The D Preferred Stock contains anti-dilution
provisions in the event of stock dividends, stock splits, reverse stock splits
and similar transactions.
Restriction on Acquiring in Excess of Five (5%) of the Outstanding Common
Stock. Each holder of the D Preferred Stock is prohibited from acquiring the
beneficial ownership of over five (5%) percent of Mark's Common Stock through
the conversion of the D Preferred Stock or otherwise.
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Impact of Conversion Price of the Preferred Stock. The conversion price of the
Preferred Stock is variable based on the current price of Mark's Common Stock at
the time of conversion. Because of the discount to the current market price of
the Common Stock, sales of the shares of Common Stock underlying the Preferred
Stock may cause a downward trend in the trading price of the Common Stock until
such shares are sold if the interest to buy the Common Stock by investors is
weak. The Selling Shareholders are not prohibited from taking or maintaining a
short position in the Common Stock.
SELLING SHAREHOLDERS
The up to 1,062,500 shares of Common Stock offered hereby are being offered
for the account of the following person(s). The information regarding such
person(s) and beneficial ownership of Common Stock has been provided by the
Selling Shareholders.
Shares of Shares of Shares Shares of
Common Stock Common Stock of Common Common Stock
Underlying D Beneficially Stock Beneficially Owned
Name Preferred Stock Owned Offered After Offering
- --------------- ---------------------------------------------------------------
Frank Brosens 88,766 (1) 624,045(2) 651,266 61,545
Demien Construction
Company 150,000 150,000 150,000 0
(1) Assumes dividends paid in cash. Based on a conversion rate of 70% of the
closing sale price of $3.21875 on December 16, 1999.
(2) Includes 562,500 shares of Common Stock issuable subject to owner being
prohibited from beneficially owning in excess of five (5%) of Mark's
Common Stock.
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PLAN OF DISTRIBUTION
The sale of shares of Common Stock by the Selling Shareholders may be
effected from time to time in transactions on one or more exchanges or in the
over-the-counter market, or otherwise in negotiated transactions, through the
timing of options on the shares or through a combination of such methods of
sale, at fixed prices, which may be charged at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Shareholders may effect such transactions by
selling the shares of Common Stock in an exchange distribution in accordance
with the rules of such exchange to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the shares of
Common Stock for which such broker-dealer may act as agent or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer may
be in excess of customary compensation). The Selling Shareholders and any
broker-dealers who act in connection with the sale of the shares of Common Stock
hereunder may be deemed to be "underwriters" within the meaning of Section 2(11)
of the Securities Act, and any commissions received by them and profit on any
sale of the shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
In addition any securities covered by the Prospectus which qualify may be
sold under Rule 144 rather than pursuant to the Prospectus, as supplemented.
From time to time the Selling Shareholders may engage in short sales, short
sales against the box, puts and calls and other transactions in securities of
Mark or derivatives thereof, and may sell and deliver the shares in connection
therewith.
From time to time Selling Shareholders may pledge their shares pursuant to
the margin provisions of their respective customer agreements with their
respective brokers. Upon a default by a Selling Shareholder, the broker may
offer and sell the pledged shares of the Common Stock from time to time.
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LEGAL MATTERS
Timothy J. McCartney, Esq. has acted as counsel for Mark and has rendered
an opinion on the validity of the shares of Common Stock to be sold pursuant to
this Prospectus.
EXPERTS
Mark's consolidated balance sheet as of June 30, 1998 and 1999 and the
consolidated statements of operations, stockholders' equity (deficiency) and
cash flows for the years ended June 30, 1998 and 1999 incorporated into this
Prospectus, have been included in reliance on the report of Holtz Rubenstein &
Co., LLP, independent certified public accountants, given on the authority of
that firm as experts in accounting and auditing.
Mark's consolidated statement of operations, stockholders' equity and cash
flows for the year ended June 30, 1997 incorporated into this Prospectus, have
been included in reliance on the report of Sax Macy Fromm & Co., P.C.,
independent certified public accountants, given on the authority of that firm as
experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
Registration Statement and SEC Filing. This Prospectus is part of a
Registration Statement filed with the SEC and omits certain information
contained in that Registration Statement. Mark also files annual, quarterly,
special reports and other information with the SEC. You may read and copy any
document that Mark files at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
information on the operations of its Public Reference Rooms. In addition, the
SEC maintains an Internet site (http:// www.sec.gov) where Mark's SEC filings
are available free of charge.
Mark's Web Site. Mark maintains its own Internet site
(www.mark-solutions.com), which contains other information About Mark.
Information Incorporated by Reference. Mark is permitted to incorporate by
reference into this Prospectus information and reports that are filed with the
SEC. The following documents filed by Mark (Commission File No. 0-17118) are
incorporated and made a part of this Prospectus by reference:
(1) Mark's Annual Report on Form 10-K for the year ended June 30,
1999.
(2) Mark's definitive proxy statement for its Annual Shareholders
Meeting to be held on December 17, 1999. Mark's Annual Report
on Form 10-K for the year ended June 30, 1999.
(3) Mark's Quarterly Report on Form 10-Q for the period ended
September 30, 1999. Mark's Quarterly Report on Form 10-Q for
the period ended September 30, 1999.
(4) Mark's Current Report on Form 8-K for the event date of
December 16, 1999.
(5) The description of the Common Stock contained in the
Registration Statement on Form S-1 (File No. 333-62513)
declared effective on December 31, 1999.
In addition, all documents subsequently filed by Mark under Section 13(a),
13(c), 14 or 15(d)of the Securities Exchange Act of 1934 and prior to the
termination of the offering of Shares are deemed to be incorporated by reference
into and made a part of this Prospectus from the date of filing. Information
contained in these subsequent filings automatically modifies or supersedes
previously filed information, including information contained in this
Prospectus.
You may obtain free copies of these filings. Requests for copies should be
directed to Ms. Cheryl Gomes, Mark Solutions, Inc. 1515 Broad Street,
Bloomfield, New Jersey 07003, Telephone Number (973) 893-0500.
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PART II
INFORMATION NOT REQUIRED IN FORM S-3 PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the issuance and distribution of the securities
being registered hereby, other than underwriting discounts and commissions.
Item Amount
- ---- ------
Registration Fee . .. . . . . . . . . . . . . . . $ 1,128.58
Accountants' Fees and Expenses . . . . . . . . . 5,000.00
Blue Sky Filing Fees and Expenses . . . . . . . 3,000.00
Legal Fees and Expenses . . . . . . . . . . . . 15,000.00
Miscellaneous . . . . . . . . . . . . . . . . . 4,000.00
----------
Total . . . . . . . . . . . . . . . . . . . . . . $28,128.58
==========
Item 15. Indemnification of Directors and Officers.
Reference is made to Article Seven of the Certificate of Incorporation
of the Registrant and Section 145 of the Delaware General Corporation Law.
Article Seventh of the Certificate of Incorporation of the Registrant
provides for indemnification to the full extent permitted by Delaware law of all
persons whom it shall have the power to indemnify thereunder. Section 145 of the
General Corporation Law of the State of Delaware ("GCL") contains provisions
entitling directors and officers of the Registrant to indemnification from
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorney's fees, as the result of being or having been a director or officer of
the Registrant provided said officers or directors acted in good faith. GCL
Section 145 provides broad powers of indemnification of directors and officers
by their corporation. For example, the board of directors, the shareholders, or
independent legal counsel in some circumstances may authorize the corporation to
indemnify any officer or director again expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonable
incurred by him in connection with any "threatened, pending or completed action,
suit or proceeding other than an action by or in the right of the corporation,
whether civil, criminal, administrative or investigative- by reason of the fact
that he is or was
II-1
<PAGE>
a director or officer of the corporation, if such director or officer acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. With
respect to any threatened, pending or completed action or suit by or in the
right of a Delaware corporation, the corporation may in like manner indemnify
any officer or director against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such personal shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation, but
only if and to the extent that the Court of Chancery or the court in which the
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
Should a director or officer defend litigation arising out of his office
and be successful on the merits or otherwise in defense of the action, GCL
Section 145 provides that such officer or director shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Finally, a corporation organized under the GCL shall have power to purchase
and maintain insurance on behalf of any director or officer against any
liability asserted against him and incurred by him in such capacity or arising
out of his status as an officer or a director, whether or not the corporation
would have the power to indemnify him against such liability under the before
described provisions of Section 145 of the GCL.
Item 16. Exhibits.
Exhibit
Number Description
------ ------------------------------------------
2. a)-- Stock purchase Agreement between Mark and Ian Baverstock,
Jonathan Newth, David Payne and Joanna Tubbs dated April 5,
1996. (Incorporated by reference to Exhibit 1 to Mark's Form
8-K-Dated of Report May 28, 1996 referred to herein as "Mark's
May 1996 Form 8-K")
b)-- Stock Purchase Agreement between Mark and Christopher Cummins
and Moria Addington dated April 24, 1996. (Incorporated by
reference to Exhibit 2 to Mark's May 1996 Form 8-K)
3. a)-- Amended and Restated Certificate of Incorporation
(Incorporated by reference to Exhibit 3(i)1 to Mark's Form
10-Q for the period ended December 31, 1998 )
II-2
<PAGE>
Exhibit
Number Description
------ -----------------------------------------
b)-- Certificate of Designation of Series "D" Preferred Stock
c)-- By-laws (Incorporated by reference to Exhibit 3 b) to Mark's
Form 10-K for the fiscal year ended June 30, 1998)
4. a)-- Specimen Stock Certificate (Incorporated by reference
to Exhibit 4 a) to Mark's Form 10-K for the fiscal year
ended June 30, 1998)
5. Opinion of Timothy J. McCartney, Esq.
21. Subsidiaries of Mark (Incorporated by reference to Exhibit
21. to Mark's Form 10-K for the fiscal year ended
June 30, 1998)
23. a) -- Consents of Holtz Rubenstein & Co., LLP, Sax Macy Fromm & Co.,
P.C., Chantrey Vellacott and Baker Tilly
(included on pages II-7 to II-8)
23. b) -- Consent of Timothy J. McCartney, Esq. (included in Exhibit 5)
24. Power of Attorney (included on page II-5)
Item 17. Undertakings.
(A) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons, if any, of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action suit or proceeding) is asserted by any such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless, in the opinion of its counsel, the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
(B) With respect to the Common Stock, the undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee " Table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, the paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the
information required to be included in a post-effective amendment by such
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(C) The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each of the registrant's annual
reports pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and
where applicable, each filing of an employee benefit's plan annual report
pursuant to Section 15(d) of the exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
(D) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnish pursuant to and meeting the requirements
of Rule 14-a-3 or Rule 14c-3 under the Exchange Act; and, where interim
financial information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, to cause to be delivered to
each person to whom the prospectus is sent or given, the latest quarterly that
is specifically incorporated by reference in the prospectus to provide such
interim financial information.
POWER OF ATTORNEY
Mark Solutions, Inc., and each of the undersigned do hereby appoint Carl
Coppola, its or their true and lawful attorney to execute on behalf of Mark
Solutions, Inc. and the undersigned any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and that it has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Bloomfield, State of New Jersey, on December 17,
1999.
MARK SOLUTIONS, INC.
By: /s/ Carl Coppola
-------------------------------------
(Carl Coppola, Chief Executive Officer
and President)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
- ----------------------- --------------------------------- -------------
/s/ Carl Coppola Chief Executive Officer, President December 17, 1999
- ---------------------- and Director (Principal Executive
(Carl Coppola) Officer)
/s/ Michael Nafash Chief Financial Officer, Vice December 17, 1999
- ---------------------- President- Finance and Director
(Michael Nafash) (Principal Financial and
Accounting Officer)
/s/ Richard Branca Director December 17, 1999
- ----------------------
(Richard Branca)
/s/ Yitz Grossman Director December 17, 1999
- ----------------------
(Yitz Grossman)
/s/ Ronald E. Olszowy Director December 17, 1999
- ----------------------
(Ronald E. Olszowy)
/s/ William Westerhoff Director December 17, 1999
- ----------------------
(William Westerhoff)
II-6
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation into this Registration Statement on
Form S-3 of our report dated September 2, 1999 with respect to the consolidated
financial statements of Mark Solutions, Inc. as of June 30, 1998 and 1999 and
for the years ended included in its Annual Report on Form 10-K for the year
ended June 30, 1999. We also consent to the reference to us under the heading
"Experts" in the Prospectus which is part of the Registration Statement.
HOLTZ RUBENSTEIN & CO., LLP
Certified Public Accountants
Melville, New York
December 17, 1999
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the inclusion into this Registration Statement on Form S-3 of our
report dated August 22, 1997 (except for Note 1, as to which date is September
23, 1997), on our audits of the consolidated statements of operations,
shareholders equity (deficiency) and cash flows of Mark Solutions, Inc. ("Mark")
for the year ended June 30, 1997. We also consent to the reference to us under
the heading "Experts" in the Prospectus which is part of the Registration
Statement.
Sax Macy Fromm & Co., P.C.
Certified Public Accountants
Clifton, New Jersey
December 17, 1999
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
II-7
<PAGE>
We consent to the inclusion into this Registration Statement on Form S-3 of our
report dated October 11, 1999, on our audits of the financial statements of
MarkCare Medical Systems Limited as of June 30, 1998 and 1999 and for the years
ended June 30, 1998 and 1999.
Chantrey Vellacott
Chartered Accountants
Registered Auditors
London, England
December 17, 1999
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the inclusion into this Registration Statement on Form S-3 of our
report dated September 25, 1997, on our audits of the financial statements of
MarkCare Medical Systems Limited for the period ending 30 June 1997.
Baker Tilly
Chartered Accountants
London, England
December 17, 1999
II-8
<PAGE>
CERTIFICATE OF DESIGNATION, NUMBER, POWERS, PREFERENCES AND
OTHER RIGHTS AND QUALIFICATIONS, LIMITATIONS, RESTRICTIONS
AND OTHER CHARACTERISTICS OF SERIES "D" PREFERRED STOCK
OF
MARK SOLUTIONS, INC.
It is hereby certified that:
1. The name of the corporation is Mark Solutions, Inc. (hereinafter called
the "corporation").
2. The certificate of incorporation, as amended, of the corporation
authorizes the issuance of 5,000,000 shares of Preferred Stock, $1.00 par value,
and expressly vests in the Board of Directors of the corporation the authority
provided therein to issue any or all of said shares in one or more series and by
resolution or resolutions, the designation, number, full or limited voting
powers, or the denial of voting powers, preferences and relative, participating,
optional, and other special rights and the qualifications, limitations,
restrictions, and other distinguishing characteristics of each series to be
issued.
3. The Board of Directors of the corporation, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
creating a Series "D" issue of Preferred Stock:
RESOLVED, that the Board of Directors hereby fixes and determines the
designation of the number of shares and the rights, preferences, privileges and
restrictions relating to the Series "D" Preferred Stock:
(a) Designation. The series of Preferred Stock created hereby shall be
designated the Series "D" Preferred Stock (the "Series D Preferred Stock").
(b) Authorized Shares. The number of shares of Series D Preferred Stock shall
be 20,000 shares.
(c) Liquidation Rights. In the event of any liquidation, dissolution or winding
up of the corporation, either voluntary or involuntary, after setting apart or
paying in full the preferential amounts due to holders of senior capital stock,
if any, the holders of Series D Preferred Stock and parity capital stock, if
any, shall be entitled to receive, prior and in preference to any distribution
1
<PAGE>
of any of the assets or surplus funds of the corporation to the holders of
junior capital stock, including Common Stock, an amount equal to $10.00 per
share, plus accrued and unpaid dividends (the "Liquidation Preference"). If upon
such liquidation, dissolution or winding up of the corporation, the assets of
the corporation available for distribution to the holders of the Series D
Preferred Stock and parity capital stock, if any, shall be insufficient to
permit in full the payment of the Liquidation Preference, then all such assets
of the corporation shall be distributed ratably among the holders of the Series
D Preferred Stock and parity capital stock, if any. Neither the consolidation or
merger of the corporation nor the sale, lease or transfer by the corporation of
all or a part of its assets shall be deemed a liquidation, dissolution or
winding up of the corporation for purposes of this Section (c). For purposes of
this Section (c), the corporation's Series A and Series B Preferred Stock are
deemed "senior capital stock".
(d) Dividends. The holders of the then outstanding Series D Preferred Stock
shall be entitled to receive a dividend, payable quarterly on the first day of
each calendar quarter commencing January 1, 2000, which accrues from the date of
issuance at an annual rate of $1.00 per share. The dividends shall be payable,
at the option of the corporation, either in cash or in shares of Common Stock,
which on the date of the dividend payment have a value equal to the dividend,
provided that dividends may be paid in Common Stock only if such shares shall
have been registered or are otherwise eligible for resale in compliance with the
Securities Act of 1933. The value of each share of Common Stock for purposes of
any dividend payment shall be equal to the average of the Closing Price [as
defined in paragraph (e)(i)] on the last five Trading Days [as defined in
paragraph (e)(i)] prior to the dividend payment date. "Common Stock" means
shares now or hereafter authorized of the class of Common Stock, $.01 par value,
of the corporation and stock of any other class into which such shares may
hereafter have been reclassified or changed.
(e) Conversion Rights. Each share of Series D Preferred Stock shall be
convertible, at the option of the holder, into fully paid and nonassessable
shares of the corporation's Common Stock equal to $10.00 per share divided by
the Conversion Price (as defined in paragraph (e)(i)].
(i) Conversion Price. The Conversion Price means 70% of the average per
share closing bid price of the Common Stock during the five Trading Days prior
to such conversion. The "Closing Price" on any Trading Day shall mean the last
reported bid price of the Common Stock as reported on The Nasdaq National Market
or the Nasdaq SmallCap Market, as applicable, on such date or, if the Common
Stock is neither so listed nor so reported, the last reported bid price of the
Common Stock as quoted by a registered broker-dealer for which such quotes are
2
<PAGE>
available on such date. A "Trading Day" means (a) a day on which the Common
Stock is traded on The Nasdaq Stock Market or (b) if the Common Stock is not
listed on The Nasdaq Stock Market or any stock exchange, a day on which the
Common Stock is traded in the over-the-counter market, as reported by Nasdaq, or
(c) if the Common Stock is not quoted on the Nasdaq Stock Market, a day on which
the Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices).
(ii) Conversion Procedure. The holder shall effect conversions by
surrendering the certificate(s) representing the Series D Preferred Stock to be
converted to the corporation, together a form of conversion notice satisfactory
to the corporation, which shall be irrevocable. If the holder is converting less
than all of the shares of Series D Preferred Stock represented by the
certificate tendered, the corporation shall promptly deliver to the holder a new
certificate representing the Series D Preferred Stock not converted. Not later
than four (4) trading days after the conversion date, the corporation will
deliver to the holder (i) a certificate or certificates, which shall be subject
to restrictive legends and trading restrictions required by law, representing
the number of shares of Common Stock being acquired upon the conversion;
provided, however, that the corporation shall not be obligated to issue such
certificates until the Series D Preferred Stock is delivered to the corporation.
If the corporation does not deliver such certificate(s) by the date required
under this paragraph (e)(ii), the holder shall be entitled by written notice to
the corporation at any time on or before receipt of such certificate(s), to
rescind such conversion.
(iii) Adjustments on Stock Splits, Dividends and Distributions. If the
corporation, at any time while any Series D Preferred Stock is outstanding, (a)
shall pay a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock payable in shares of its capital stock (whether
payable in shares of its Common Stock or of capital stock of any class), (b)
subdivide outstanding shares of Common Stock into a larger number of shares, (c)
combine outstanding shares of Common Stock into a smaller number of shares, or
(d) issue reclassification of shares of Common Stock any shares of capital stock
of the corporation, the Conversion Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock of the
corporation outstanding before such event and of which the denominator shall be
the number of shares of Common Stock outstanding after such event. Any
adjustment made pursuant to this paragraph (e)(iii) shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
3
<PAGE>
reclassification. Whenever the Conversion Price is adjusted pursuant to this
paragraph, the corporation shall promptly mail to the Holder a notice setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
(iv) Adjustments on Reclassifications, Consolidations and Mergers. In case
of reclassification of the Common Stock, any consolidation or merger of the
corporation with or into another person, the sale or transfer of all or
substantially all of the assets of the corporation or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property, then each holder of Series D Preferred Stock then outstanding
shall have the right thereafter to convert such Series D Preferred Stock only
into the shares of stock and other securities and property receivable upon or
deemed to be held by holders of Common Stock following such reclassification,
consolidation, merger, sale, transfer or share exchange, and the Holder shall be
entitled upon such event to receive such amount of securities or property as the
shares of the Common Stock into which such Series Preferred Stock could have
been converted immediately prior to such reclassification, consolidation,
merger, sale, transfer or share exchange would have been entitled. The terms of
any such consolidation, merger, sale, transfer or share exchange shall include
such terms so as to continue to give to the Holder the right to receive the
securities or property set forth in this paragraph (e)(iv) upon any conversion
following such consolidation, merger, sale, transfer or share exchange. This
provision shall similarly apply to successive reclassifications, consolidations,
mergers, sales, transfers or share exchanges.
(v) Fractional Shares; Issuance Expenses. Upon a conversion of Series D
Preferred Stock, the corporation shall not be required to issue stock
certificates representing fractions of shares of Common Stock, but shall issue
that number of shares of Common Stock rounded to the nearest whole number. The
issuance of certificates for shares of Common Stock on conversion of Series D
Preferred Stock shall be made without charge to the Holder for any documentary
stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificate, provided that the corporation shall not be required to pay
any tax that may be payable in respect of any transfer involved in the issuance
and delivery of any such certificate upon conversion in a name other than that
of the Holder, and the corporation shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the corporation the amount of such tax or shall have
established to the satisfaction of the corporation that such tax has been paid.
(vi) Limitation on Conversion. Notwithstanding anything herein to the
contrary, the holder shall not be entitled to convert the Series D Preferred
4
<PAGE>
Stock to the extent that such conversion would result in the holder becoming the
"beneficial owner" of five percent (5%) or more of the outstanding Common Stock
as that term is defined in Section 13(d) of the Securities Exchange Act of 1934.
The opinion of legal counsel to the holder, in form and substance satisfactory
to the corporation and its counsel, shall prevail in all matters relating to the
determination of holder's beneficial ownership.
(f) Voting Rights. Except as otherwise expressly provided herein or as required
by law, the holders of shares of Series D Preferred Stock shall not be entitled
to vote on any matters considered and voted upon by the corporation's Common
Stock. In the event the holders of the Series D Preferred Stock are entitled to
vote on a matter as required by law, the holders shall be entitled to one vote
per share of Series D Preferred Stock. Except as otherwise expressly provided
herein or as required by law, the holders of the Series D Preferred Stock and
the Common Stock shall vote together and not as separate classes.
(g) Reservation of Shares of Common Stock. The corporation covenants that it
will at all times reserve and keep available out of its authorized and unissued
Common Stock solely for the purpose of issuance upon conversion of Series D
Preferred Stock as herein provided, free from preemptive rights or any other
actual contingent purchase rights of persons other than the holders of Series D
Preferred Stock, such number of shares of Common Stock as shall be issuable upon
the conversion of the aggregate principal amount of all outstanding Series D
Preferred Stock. If at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all outstanding
Series D Preferred Stock, the corporation will take such corporate action
necessary to increase its authorized shares of Common Stock to such number as
shall be sufficient for such purpose. The corporation covenants that all shares
of Common Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued and fully paid and nonassessable.
(h) No Reissuance of Series D Preferred Stock. No shares of the Series D
Preferred Stock acquired by the corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
cancelled, retired and eliminated from the shares of capital stock which the
corporation shall be authorized to issue.
(i) Redemption. The corporation shall not be obligated to redeem the Series D
5
<PAGE>
Preferred Stock. In the event the Series D Preferred Stock is not converted into
shares of Common Stock, the corporation, at its option may redeem all or a
portion of the Series D Preferred Stock at any time after September 30, 2000 at
a redemption price equal to $10.00 per share plus accrued dividends.
and be it further
RESOLVED, that the statements contained in the foregoing resolutions creating
and designating the Series D Preferred Stock and fixing the number, voting
powers, preferences and relative, participating, optional, and other special
rights and the qualifications, limitations, restrictions, and other
distinguishing characteristics thereof, upon the effective date of such series,
be deemed to be included in and be a part of the certificate of incorporation of
the corporation pursuant to the provisions of Section 104 and 151 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on October 27,
1999.
/s/ Carl Coppola
- ------------------------------
Carl Coppola, President
6
<PAGE>
Exhibit 5
TIMOTHY J. McCARTNEY*
Attorney-at-Law
9 Elsa Way
Richboro, Pennsylvania 18954
------
Telephone (215) 396-7156
Facsimile (215) 396-7157
* Member of N.Y. Bar
December 17, 1999
Mark Solutions, Inc.
1515 Broad Street
Bloomfield, New Jersey 07003
Gentlemen:
I have acted as counsel to Mark Solutions, Inc. ("Mark") in connection with the
registration on Form S-3 (the "Registration Statement") by Mark under the
Securities Act of 1933, as amended (the Securities Act") of 1,062,500 shares of
Mark Common Stock, $.01 par value (the "Shares") and the related prospectus.
On the basis of such investigation as I have deemed necessary, I am of the
opinion that:
The Shares (i)underlying the Preferred Stock, (ii) issuable in connection
with previous debenture conversions and (iii) related to the litigation
settlement have been duly authorized, reserved or issued by Mark and, upon such
issuance will be duly authorized, validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the caption "Legal Matters" set
forth in the prospectus.
Very Truly Yours,
Timothy J. McCartney
