<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 4, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PUBLICARD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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PENNSYLVANIA 23-0991870
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
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620 FIFTH AVENUE
SEVENTH FLOOR
NEW YORK, NEW YORK 10020
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JAN-ERIK ROTTINGHUIS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PUBLICARD, INC.
620 FIFTH AVENUE
SEVENTH FLOOR
NEW YORK, NEW YORK 10020
(212) 651-3102
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
JOEL I. GREENBERG, ESQ.
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP
425 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 836-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
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Common stock, par value $0.10 per
share................................. 2,615,000 shares(2) 1.59 4,157,850 $1,040.00
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
(2) Includes 1,975,000 shares of common stock which are issuable upon conversion
of 790 shares of class A preferred stock, second series, issued pursuant to
the December 2000 private placement of such securities..
Pursuant to Rule 416, this Registration Statement also registers an
indeterminate number of shares of common stock as may be issued or become
issuable upon conversion of shares of class A preferred stock, second series in
accordance with the terms thereof to prevent dilution resulting from stock
splits, stock dividends and other similar transactions.
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
PROSPECTUS
2,615,000 SHARES
COMMON STOCK
PUBLICARD, INC.
The shareholders of our company that are identified in this prospectus are
offering for sale from time to time under this prospectus up to 2,615,000 shares
of our common stock of which up to 1,975,000 shares are issuable upon conversion
of shares of class A preferred stock, second series.
We are registering 2,500,000 shares of our common stock in connection with
a December 2000 private placement of shares of our common stock and preferred
stock. On December 6, 2000, our company completed the private placement of
shares of common stock and class A preferred stock, second series, a newly
designated series of convertible preferred stock. 525,000 shares of common stock
and 790 shares of preferred stock were sold to institutional investors and other
accredited investors in the U.S. and Europe. We used the proceeds from the
private placement to complete a $5.0 million investment in TECSEC, Incorporated,
a developer and marketer of smart card products.
Each share of class A preferred stock, second series may, upon 30 days'
prior written notice by the holder to us, be converted into 2,500 shares of our
common stock. In addition, the number of shares of our common stock issuable
upon conversion of the class A preferred stock, second series is subject to
adjustment upon the occurrence of certain dilutive events.
Our common stock is traded on the Nasdaq National Market under the symbol
"CARD." On January 3, 2001, the last reported sale price of our common stock on
the Nasdaq National Market was $1.6563 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 2 TO READ ABOUT CERTAIN RISKS THAT YOU
SHOULD CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY REGULATORY BODY HAS
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2001
<PAGE> 3
TABLE OF CONTENTS
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Risk Factors................................................ 2
Use of Proceeds............................................. 10
Selling Shareholders........................................ 11
Plan of Distribution........................................ 13
Where You Can Find More Information......................... 13
Legal Matters............................................... 14
Experts..................................................... 14
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In this prospectus, unless we indicate otherwise, "we," "us," "our" and
"PubliCARD" refer to PubliCARD, Inc. and our subsidiaries.
PubliCARD was incorporated in the Commonwealth of Pennsylvania in 1913. Our
principal executive offices are located at 620 Fifth Avenue, Seventh Floor, New
York, New York 10020. Our telephone number is (212) 651-3102.
<PAGE> 4
RISK FACTORS
You should carefully consider each of the following risks and all of the
other information set forth in this prospectus before deciding to invest in our
common stock. Some of the following risks relate principally to our business and
the industries in which we operate or in which we plan to operate in the future.
Other risks relate principally to the securities markets and ownership of our
common stock.
If any of the following risks and uncertainties develop into actual events,
our business, financial condition and results of operations could be materially
adversely affected, the trading price of our common stock could decline and you
may lose all or part of your investment.
Sections of this prospectus contain forward-looking statements, including,
without limitation, statements concerning possible or assumed future results of
operations of PubliCARD preceded by, followed by or that include the words
"believes," "expects," "anticipates," "estimates," "intends," "plans" or similar
expressions. For those statements, we claim the protection of the safe harbor
for forward-looking statements contained in the U.S. Private Securities
Litigation Reform Act of 1995.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. You should understand that such
statements made under "Risk Factors" and elsewhere in this document could affect
our future results and could cause those results to differ materially from those
expressed in such forward-looking statements.
RISKS RELATED TO THE BUSINESS OF PUBLICARD
WE HAVE A HISTORY OF OPERATING LOSSES AND NEGATIVE CASH FLOW, AND WE HAVE
ONGOING FUNDING OBLIGATIONS. We have incurred losses and experienced negative
cash flow from operating activities in the past, and we expect to incur losses
and experience negative cash flow from operating activities in the foreseeable
future. We incurred losses from continuing operations in 1997, 1998, 1999 and
for the nine months ended September 30, 2000 of approximately $15.4 million,
$8.4 million, $16.7 million and $15.4 million, respectively. In addition, we
experienced negative cash flow from continuing operating activities of $5.0
million, $5.6 million, $8.5 million and $15.4 million in 1997, 1998, 1999 and
the nine months ended September 30, 2000, respectively.
We expect that our business will require on-going funding to support the
expansion of sales and marketing efforts, new product development, working
capital growth and capital expenditures. Also, we will need to fund our new
initiatives in the broadband market before we can reasonably expect to derive
any significant revenues from this market.
We also have continuing obligations to fund payments due under a consent
decree with the United States Environmental Protection Agency and an underfunded
pension plan. As of September 30, 2000, we were required to make future
aggregate payments of $1.7 million through April 2002 in connection with that
consent decree. Consistent with the general practices of environmental
enforcement agencies, the consent decree does not eliminate our potential
liability for remediation of contamination that had not been known at the time
of the settlement. We sponsor a defined benefit pension plan, which was frozen
in 1993. As of December 31, 1999, the present value of the accrued benefit
liabilities of our pension plan exceeded the plan's assets by approximately $5.5
million. In addition to the $1.0 million we expect to contribute to the plan in
2000, we are obligated to make continued contributions to the plan in accordance
with the rules and regulations prescribed by the Employee Retirement Income
Security Act of 1974. Future contribution levels depend in large measure on the
mortality rate of plan participants and the investment return on the plan
assets.
OUR FUTURE PROFITABILITY DEPENDS LARGELY UPON PRODUCTS AND FUTURE PRODUCTS
THAT HAVE NOT YET PRODUCED ANY REVENUES OR ARE NOT YET COMMERCIALLY VIABLE. We
believe that certain of our products are viable, but have not yet generated any
material sales. Our future revenues and earnings depend in large part on the
success of these products. Our business is also based on products not yet
developed. There are no assurances that these products will be developed into
working products or that a market will develop for these products in the future.
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WE HAVE LIMITED EXPERIENCE IN THE BROADBAND MARKET. We have only recently
begun to provide smart card infrastructure products and solutions to the
broadband market. We are therefore subject to the risks inherent in establishing
a new business enterprise.
Our business model is new and unproven and may not generate sufficient
revenue for us to be successful. The volume of products and services distributed
using our technology may be too small to support our business or permit growth.
THE MARKET'S ACCEPTANCE OF OUR PRODUCTS IS UNCERTAIN. Demand for, and
market acceptance of, our smart card reader, application specific integrated
circuit, also known as ASIC, and electronic commerce solutions are subject to a
high level of uncertainty due to rapidly changing technology, new product
introductions and changes in customer requirements and preferences. The success
of our products or any future products also depends upon our ability to enhance
our existing products and to develop and introduce new products and technologies
to meet customer requirements. We face the risk that our current and future
products will not achieve market acceptance.
Smart card reader and ASIC solutions are designed to provide secure
electronic commerce, access control and security for various digital platforms.
The market for smart card security applications is still emerging and if the
benefits are not perceived sufficient or if alternative technologies are more
widely accepted, the demand for our solutions may not grow.
Electronic commerce for the broadband marketplace is a new and emerging
business, and we cannot guarantee that it will attract widespread demand or
market acceptance. Our success in this area depends upon, among other things,
broad acceptance of the concept of interactive television by industry
participants, including broadcast and pay-television networks and system
operators and manufacturers of televisions and set-top boxes, including their
ability to successfully market interactive television-to-television viewers and
advertisers. There have been several well-financed, high-profile attempts in the
U.S. to develop and deploy systems in the broad category of interactive
television. None of these attempts has resulted in large scale deployment, and
many key industry participants have avoided participating in interactive
television for a variety of reasons, including:
- inconsistent quality of service;
- need for new and expensive hardware in homes;
- inadequate transmission facilities and broadcast centers;
- complicated and expensive processes for creating interactive content; and
- inability to align the conflicting interests of various participants.
Accordingly, such participants may perceive interactive television
negatively and be reluctant to participate.
In addition, other participants in the television industry must accept and
support interactive television for it to be successful. For instance,
broadcasters will need to add interactive features to their programming and
commercial vendors will need to embrace e-commerce over interactive television.
We cannot assure you that these parties will provide such support.
If the market for the products described above or any other products of
ours fails to develop or develops more slowly than expected, or if any of the
technologies developed by us do not achieve market acceptance, our business and
operating results would be materially and adversely affected.
WE DEPEND ON A RELATIVELY SMALL NUMBER OF CUSTOMERS FOR A MAJORITY OF OUR
REVENUES. We rely on a limited number of customers in our business. The ASICs
we provide to Motorola's General Instruments for inclusion in their set-top
boxes accounted for 56% of our total revenue in 1999. We expect to continue to
depend upon a relatively small number of customers for a majority of the
revenues in our business.
We generally do not enter into long-term supply commitments with our
customers. Instead, we bid on a project basis and have supply contracts in place
for each project. Significant reductions in sales to any of our largest
customers would have a material adverse effect on our business. In addition, we
generate significant accounts receivable and inventory balances in connection
with providing products to our
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customers. A customer's inability to pay for our products could have a material
adverse effect on our results of operations.
WE DEPEND ON THIRD PARTY MANUFACTURERS WHO ARE OUTSIDE OF OUR CONTROL. We
outsource manufacturing needs of a significant portion of our products to third
party contract manufacturers. Outsourcing of manufacturing involves risks with
respect to quality assurance, cost and the absence of engineering support. In
addition, financial, operational or supply problems encountered by the third
party manufacturers we use or may use in the future, their subcontractors or
their suppliers could result in our inability to obtain timely delivery, if at
all, of finished products. Any such difficulties would adversely affect our
financial results.
WE HAVE A LIMITED NUMBER OF SUPPLIERS OF KEY COMPONENTS. We rely on a
limited number of suppliers for key components for our products. For example, we
purchase embedded chips for ASICs exclusively from the Atmel Corporation. Our
reliance on one supplier could impose several risks, including an inadequate
supply of chips, price increases, long lead times, late deliveries and poor
quality. Disruption or termination of the supply of these chips could delay the
delivery of our products, which could have a material adverse effect on business
and operating results. These delays could damage our relationship with current
and prospective customers.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO KEEP PACE WITH TECHNOLOGICAL
CHANGES AND INTRODUCE NEW PRODUCTS IN A TIMELY MANNER. The rate of
technological change currently affecting the broadband market is particularly
rapid compared to other industries. The migration of television from analog to
digital transmission, the convergence of television, the Internet,
communications and other media and other emerging trends are creating a dynamic
and unpredictable environment in which to operate. Our ability to anticipate
these trends and adapt to new technologies is critical to our success. Because
new product development commitments must be made well in advance of actual
sales, new product decisions must anticipate future demand as well as the speed
and direction of technological change. Our ability to remain competitive will
depend upon our ability to develop in a timely and cost effective manner new and
enhanced products at competitive prices. New product introductions or
enhancements by our competitors could cause a decline in sales or loss of market
acceptance of our existing products and lower profit margins.
Our success in developing, introducing and selling new and enhanced
products depends upon a variety of factors, including:
- product selections;
- timely and efficient completion of product design and development;
- timely and efficient implementation of manufacturing processes;
- effective sales, service and marketing;
- price; and
- product performance in the field.
Our ability to develop new products also depends upon the success of our
research and development efforts. Our research and development expenditures for
the nine months ended September 30, 2000 were $3.5 million and we plan to
increase this in the near term. We cannot assure you that these expenditures
will lead to the development of viable products. We may need to devote
substantially more resources to our research and development efforts in the
future.
THE HIGHLY COMPETITIVE MARKETS IN WHICH WE OPERATE COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS AND OPERATING RESULTS. The markets in which we
operate are intensely competitive and characterized by rapidly changing
technology. We compete against numerous companies, many of which have greater
resources than we do, and we believe that competition is likely to intensify.
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We believe that the principal competitive factors affecting the broadband
market are:
- the extent to which products support industry standards and are capable
of being operated or integrated with other products;
- technical features and level of security;
- strength of distribution channels;
- price;
- product reputation, reliability, quality, performance and customer
support;
- product features such as adaptability, functionality and ease of use; and
- competitor reputation, positioning and resources.
We cannot assure you that competitive pressures will not have a material
adverse effect on our business and operating results. Many of our current and
potential competitors have longer operating histories in the broadband industry
and significantly greater financial, technical, sales, customer support,
marketing and other resources, as well as greater name recognition and a larger
installed base of their products and technologies than our company.
Additionally, there can be no assurance that new competitors will not enter the
broadband market. Increased competition would likely result in price reductions,
reduced margins and loss of market share, any of which would have a material
adverse effect on our business and operating results.
The market for smart card products and solutions is new, intensely
competitive and rapidly evolving. We expect competition to continue to increase
with both our existing competitors and new market entrants. Our primary
competition currently comes from or is anticipated to come from:
- companies offering payment solutions, including Trintech and VeriFone;
- companies offering smart card technology solutions, including Gemplus,
Philips and SCM Microsystems;
- companies offering closed environment solutions, including small value
electronic cash systems and database management solutions, such as
Girovend, MARS, Diebold, CyberMark and Schlumberger.
Many of our current and potential competitors have broader customer
relationships that could be leveraged, including relationships with many of our
customers. These companies also have more established customer support and
professional services organizations than we do. In addition, a number of
companies with significantly greater resources than we have could attempt to
increase their presence in the broadband market by acquiring or forming
strategic alliances with our competitors, resulting in increased competition.
OUR LONG PRODUCT SALES CYCLES SUBJECT US TO RISK. Our products fall into
two categories, those that are standardized and ready to install and use and
those that require significant development efforts to implement within the
purchasers' own systems. Those products requiring significant development
efforts tend to be newly developed technologies and software applications that
can represent major investments for customers. We rely on potential customers'
internal review processes and systems requirements. The implementation of some
of our products involves deliveries of small quantities for pilot programs and
significant testing by the customers before firm orders are received for
production volumes, or lengthy beta testing of software solutions. For these
more complex products, the sales process may take one year or longer, during
which time we may expend significant financial, technical and management
resources, without any certainty of a sale.
WE MAY BE LIMITED IN OUR USE OF OUR FEDERAL NET OPERATING LOSS
CARRYFORWARDS. As of December 31, 1999, we had federal net operating loss
carryforwards, subject to review by the Internal Revenue Service, totaling
approximately $88.0 million for federal income tax purposes, approximately $12.0
million of which will expire at the end of 2000, $9.0 million of which will
expire at the end of 2001 and $25.0 million of
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which will expire at the end of 2002. We do not expect to earn any significant
taxable income prior to 2002, and may not do so until later. A federal net
operating loss can generally be carried back two or three years and then forward
fifteen or twenty years (depending on the year in which the loss was incurred),
and used to offset taxable income earned by a company (and thus reduce its
income tax liability).
Section 382 of the Internal Revenue Code provides that when a company
undergoes an "ownership change," the corporation's use of its net operating
losses is limited in each subsequent year. An "ownership change" occurs when, as
of any testing date, the sum of the increases in ownership of each shareholder
that owns five percent or more of the value of a company's stock as compared to
that shareholder's lowest percentage ownership during the preceding three-year
period exceeds fifty percentage points. For purposes of this rule, certain
shareholders who own less than five percent of a company's stock are aggregated
and treated as a single five-percent shareholder. We intend to issue a
substantial number of shares of our common stock in connection with public and
private offerings in the future. In addition, the exercise of outstanding
warrants and options to purchase shares of our common stock may require us to
issue additional shares of our common stock. The issuance of a significant
number of shares of common stock could result in an "ownership change." If we
were to experience such an "ownership change," we estimate that we would not be
able to use a substantial amount of our available federal net operating loss
carryforwards to reduce our taxable income.
The extent of the actual future use of our federal net operating loss
carryforwards is subject to inherent uncertainty because it depends on the
amount of otherwise taxable income we may earn. We cannot give any assurance
that we will have sufficient taxable income in future years to use any of our
federal net operating loss carryforwards before they would otherwise expire.
OUR PROPRIETARY TECHNOLOGY IS DIFFICULT TO PROTECT AND MAY INFRINGE ON THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. Our success depends
significantly upon our proprietary technology. We rely on a combination of
patent, copyright and trademark laws, trade secrets, confidentiality agreements
and contractual provisions to protect our proprietary rights. We seek to protect
our software, documentation and other written materials under trade secret and
copyright laws, which afford only limited protection. We currently have a number
of patent applications pending. We cannot assure you that any of our
applications will be approved, that any new patents will be issued, that we will
develop proprietary products or technologies that are patentable, that any
issued patent will provide us with any competitive advantages or will not be
challenged by third parties. Furthermore, we cannot assure you that the patents
of others will not have a material adverse effect on our business and operating
results.
If our technology or products is determined to infringe upon the rights of
others, and we were unable to obtain licenses to use the technology, we could be
required to cease using the technology and stop selling the products. We may not
be able to obtain a license in a timely manner on acceptable terms or at all.
Any of these events would have a material adverse effect on our financial
condition and results of operations.
Patent disputes are common in technology related industries. We cannot
assure you that we will have the financial resources to enforce or defend a
patent infringement or proprietary rights action. As the number of products and
competitors in the broadband market grows, the likelihood of infringement claims
also increases. Any claim or litigation may be time consuming and costly, cause
product shipment delays or require us to redesign our products or require us to
enter into royalty or licensing agreements. Any of these events would have a
material adverse effect on our business and operating results. Despite our
efforts to protect our proprietary rights, unauthorized parties may attempt to
copy aspects of our products or to use our proprietary information and software.
In addition, the laws of some foreign countries do not protect proprietary and
intellectual property rights to as great an extent as do the laws of the United
States. Our means of protecting our proprietary and intellectual property rights
may not be adequate. There is a risk that our competitors will independently
develop similar technology, duplicate our products or design around patents or
other intellectual property rights.
IF THIRD PARTIES DO NOT DEPLOY OUR TECHNOLOGY AND CREATE A MARKET FOR
DIGITAL COMMERCE, OUR BUSINESS WILL BE HARMED. Relationships with leading
content, technology and commerce service providers are
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critical to our success. Our business and operating results would be harmed to
the extent our strategic partnerships fail, in whole or in part, to:
- deploy our technology;
- develop an infrastructure for the sale and delivery of digital goods and
services;
- generate transaction fees from the sale of digital content and services;
and
- develop and deploy new applications.
THE NATURE OF OUR PRODUCTS SUBJECTS US TO PRODUCT LIABILITY RISKS. Our
customers may rely on certain of our current products and products in
development to prevent unauthorized access to digital context, computer
networks, digital video broadcasting and real property. A malfunction of or
design defect in certain of our products could result in tort or warranty
claims. Although we attempt to reduce the risk of exposure from such claims
through warranty disclaimers and liability limitation clauses in our sales
agreements and by maintaining product liability insurance, we cannot assure you
that these measures will be effective in limiting our liability for any damages.
Any liability for damages resulting from security breaches could be substantial
and could have a material adverse effect on our business and operating results.
In addition, a well-publicized actual or perceived security breach involving our
conditional access or security products could adversely affect the market's
perception of our products in general, regardless of whether any breach is
attributable to our products. This could result in a decline in demand for our
products, which would have a material adverse effect on our business and
operating results.
WE MAY HAVE DIFFICULTY RETAINING OR RECRUITING PROFESSIONALS FOR OUR
BUSINESS. Our future success and performance is dependent on the continued
services and performance of our senior management and other key personnel. There
is a shortage of qualified marketing, technical and financial personnel in our
industry, and the competition for such personnel is intense. Accordingly, the
loss of the services of any of our executive officers or other key employees
could materially adversely affect our business.
Our business requires experienced software programmers, creative designers
and application developers, and our success depends on identifying, hiring,
training and retaining such experienced, knowledgeable professionals. If a
significant number of our current employees or any of our senior technical
personnel resign, or for other reasons are no longer employed by us, we may be
unable to complete or retain existing projects or bid for new projects of
similar scope and revenues. In addition, former employees may compete with us in
the future.
Even if we retain our current employees, our management must continually
recruit talented professionals in order for our business to grow. There is
currently a shortage of qualified senior technical personnel in the software
development field, and this shortage is likely to continue. Furthermore, there
is significant competition for employees with the skills required to perform the
services we offer. We cannot assure you that we will be able to attract a
sufficient number of qualified employees in the future to sustain and grow our
business, or that we will be successful in motivating and retaining the
employees we are able to attract. If we cannot attract, motivate and retain
qualified professionals, our business, financial condition and results of
operations will suffer.
OUR INTERNATIONAL OPERATIONS SUBJECT US TO RISK ASSOCIATED WITH OPERATING
IN FOREIGN MARKETS, INCLUDING FLUCTUATIONS IN CURRENCY EXCHANGE RATES, WHICH
COULD ADVERSELY AFFECT OUR OPERATIONS AND FINANCIAL CONDITION. International
sales represent approximately 83% of total sales for the nine months ended
September 30, 2000. Because we derive a substantial portion of our business
outside the United States, we are subject to certain risks associated with
operating in foreign markets including the following:
- tariffs and other trade barriers;
- difficulties in staffing and managing foreign operations;
- currency exchange risks;
- export controls related to encryption technology;
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- unexpected changes in regulatory requirements;
- changes in economic and political conditions;
- potentially adverse tax consequences; and
- burdens of complying with a variety of foreign laws.
Any of the foregoing could adversely impact the success of our
international operations. We cannot assure you that such factors will not have a
material adverse effect on our future international sales and, consequently, on
our business, operating results and financial condition. In addition,
fluctuations in exchange rates could have a material adverse effect on our
business, operating results and financial condition. To date, we have not
engaged in currency hedging.
OUR ARTICLES OF INCORPORATION AND BY-LAWS, CERTAIN CHANGE OF CONTROL
AGREEMENTS, OUR RIGHTS PLAN AND PROVISIONS OF PENNSYLVANIA LAW COULD DETER
TAKEOVER ATTEMPTS.
Blank check preferred stock. Our board of directors has the authority to
issue up to 700,000 shares of preferred stock and to fix the rights,
preferences, privileges and restrictions, including voting rights, of these
shares without any further vote or action by the holders of our common stock.
The rights of the holders of any preferred stock that may be issued in the
future may adversely affect the rights of the holders of our common stock. The
issuance of preferred stock could make it more difficult for a third party to
acquire a majority of our outstanding voting stock, thereby delaying, deferring
or preventing a change of control. Such preferred stock may have other rights,
including economic rights, senior to our common stock, and as a result, the
issuance of the preferred stock could limit the price that investors might be
willing to pay in the future for shares of our common stock and could have a
material adverse effect on the market value of our common stock.
Rights plan. Our rights plan entitles the registered holders of rights to
purchase shares of our class A preferred stock upon the occurrence of certain
events, and may have the effect of delaying, deferring or preventing a change of
control.
Change of control agreements. We are a party to change of control
agreements which provide for payments to certain of our directors and executive
officers under certain circumstances following a change of control. Since the
change of control agreements require large cash payments to be made by any
person effecting a change of control, these agreements may discourage takeover
attempts.
The change of control agreements provide that, if the services of any
person party to a change of control agreement are terminated within three years
following a change of control, that individual will be entitled to receive, in a
lump sum within 10 days of the termination date, a payment equal to 2.99 times
that individual's average annual compensation for the shorter of the five years
preceding the change of control and the period the individual received
compensation from us for personal services. Assuming a change of control were to
occur at the present time, payments in the following amounts would be required:
Mr. Harry I. Freund -- $972,000; and Mr. Jay S. Goldsmith -- $972,000. If any
such payment, either alone or together with others made in connection with the
individual's termination, is considered to be an excess parachute payment under
the Internal Revenue Code, the individual will be entitled to receive an
additional payment in an amount which, when added to the initial payment, would
result in a net benefit to the individual, after giving effect to excise taxes
imposed by Section 4999 of the Internal Revenue Code and income taxes on such
additional payment, equal to the initial payment before such additional payment.
We would not be able to deduct these payments for income tax purposes.
Pennsylvania law. We are a Pennsylvania corporation. Anti-takeover
provisions of Pennsylvania law could make it difficult for a third party to
acquire control of us, even if such change of control would be beneficial to our
shareholders.
WE ARE SUBJECT TO GOVERNMENT REGULATION. The telecommunications, media,
broadcast and cable television industries are subject to extensive regulation by
governmental agencies. These governmental agencies continue to oversee and adopt
legislation and regulation over these industries, which may affect
8
<PAGE> 11
our business, market participants with which we have relationships or the
acceptance of interactive television in general. In addition, future legislation
or regulatory requirements regarding privacy issues could be enacted to require
notification to users that captured data may be used by marketing entities to
target product promotion and advertising to that user. Any of these developments
may materially adversely affect our business.
Federal, state and local regulations impose various environmental controls
on the discharge of chemicals and gases, which may be used in our present or
future assembly processes. Moreover, changes in such environmental rules and
regulations may require us to invest in capital equipment and implement
compliance programs in the future. Any failure by our company to comply with
environmental rules and regulations, including the discharge of hazardous
substances, would subject us to liabilities and would materially adversely
affect our operations.
RISKS RELATED TO COMMON STOCK
OUR STOCK PRICE IS EXTREMELY VOLATILE. The stock market has recently
experienced significant price and volume fluctuations unrelated to the operating
performance of particular companies. The market price of our common stock has
been highly volatile and is likely to continue to be volatile. The future
trading price for our common stock will depend on a number of factors,
including:
- variations in our annual or quarterly financial results or those of our
competitors;
- general economic conditions, in particular, the technology service
sector;
- the volume of activity for our common stock is minimal and therefore a
large number of shares placed for sale or purchase could increase its
volatility;
- our ability to effectively manage our business;
- expected or announced relationships with other companies;
- announcements of technological advances, innovations or new products by
us or our competitors;
- patents or other proprietary rights or patent litigation; and
- product liability or warranty litigation.
We cannot be certain that the market price of our common stock will not
experience significant fluctuations in the future, including fluctuations that
are adverse and unrelated to our performance.
THE MARKET PRICE OF OUR COMMON STOCK MAY DECREASE IF A LARGE NUMBER OF
SHARES IS SOLD IN THE FUTURE. Future sales of our common stock in the public
market, or the issuance of shares of common stock upon the exercise of stock
options and warrants or otherwise, could adversely affect the market price of
our common stock and impair our ability to raise capital through the sale of
equity or equity-related securities.
We cannot predict the effect, if any, that market sales of shares of common
stock, or the availability of such shares of common stock for sale, will have on
the market price of the shares of common stock prevailing from time to time.
Nevertheless, sales of substantial amounts of shares of common stock in the
public market, or the perception that such sales could occur, could adversely
affect prevailing market prices for the shares of common stock and could impair
our ability to raise capital through an offering of our equity securities.
9
<PAGE> 12
USE OF PROCEEDS
The proceeds from the sale of shares of common stock under this prospectus
are solely for the account of the selling shareholders. Accordingly, we will not
receive any proceeds from the sale of the shares being sold by the selling
shareholders under this prospectus.
10
<PAGE> 13
SELLING SHAREHOLDERS
The following table sets forth certain information known to us with respect
to beneficial ownership of PubliCARD common stock as of December 11, 2000 by
each selling shareholder. The following table assumes that the selling
shareholders sell all of the shares registered under the registration statement
of which this prospectus forms a part and shown as beneficially owned by them.
PubliCARD is unable to determine the exact number of shares that actually will
be sold.
The number and percentage of shares beneficially owned is based on
24,237,400 shares issued and outstanding as of January 3, 2001, determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares as to which a
selling shareholder has sole or shared voting power or investment power and also
any shares which that selling shareholder has the right to acquire within the
date of this prospectus through the exercise of any stock option or other
rights.
<TABLE>
<CAPTION>
MAXIMUM NUMBER
COMMON STOCK OF SHARES OF
BENEFICIALLY OWNED COMMON STOCK TO COMMON STOCK
PRIOR BE SOLD IN THIS BENEFICIALLY OWNED
TO THIS OFFERING OFFERING AFTER THIS OFFERING(1)
------------------- --------------- -----------------------
SELLING SHAREHOLDER NUMBER PERCENT NUMBER PERCENT
------------------- --------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Publicker Industries Inc. Retirement
Income Plan......................... 170,315 * 115,000(2) 55,315 *
J. Rothschild Assurance Life
Fund(3)............................. 991,000 4.09% 91,000(4) 900,000 3.71%
J. Rothschild Assurance Pension
Fund(3)............................. 611,250 2.52% 56,250(4) 555,000 2.29%
J. Rothschild International Managed
Assurance Fund(3)................... 324,750 1.34% 29,750(4) 295,000 1.22%
J. Rothschild International Assurance
US Managed Fund(3).................. 30,250 * 2,750(4) 27,500 *
St. James's Place International(3).... 792,750 3.27% 72,750(4) 720,000 2.97%
TDG Funds Ltd.(3) .................... 116,750 * 10,750(4) 106,000 *
GAM Worldwide Fund(3)................. 78,750 * 7,250(4) 71,500 *
CTCL A/C The Partners Fund(3)......... 49,500 * 4,500(4) 45,000 *
N.C.L. Investments.................... 345,200 1.42% 250,000(4) 95,200 *
Baltic Trust.......................... 420,000 1.72% 250,000(5) 170,000 *
Peter Frederick Dicks................. 52,500 * 37,500(5) 15,000 *
Singer & Friedlander Limited.......... 250,000 1.02% 250,000(5) 0 *
A.N. Solomons......................... 125,000 * 125,000(5) 0 *
Jere Harris........................... 250,000 1.02% 250,000(5) 0 *
Michael G. Jesselson 12/18/80 Trust... 365,200 1.50% 125,000(5) 240,200 *
Jesselson Grandchildren 12/18/80
Trust............................... 125,000 * 125,000(5) 0 *
Steve Lampe........................... 354,700 1.45% 250,000(5) 104,700 *
Leonard M. Ross Revocable Trust u/t/d
12/20/85............................ 1,187,152 4.83% 350,000(5) 837,152 3.45%
Dr. Edward Steinberg.................. 270,000 1.11% 100,000(5) 170,000 *
Lewis P. Schneider.................... 225,000 * 25,000(5) 200,000 *
Arthur Cantor......................... 25,000 * 25,000(5) 0 *
S. Irving Zacheim..................... 84,800 * 37,500(5) 47,300 *
Bill Mattison......................... 385,000 1.59% 25,000(5) 360,000 1.49%
</TABLE>
---------------
(1) Assumes the maximum number of shares registered under the registration
statement of which this prospectus forms a part is sold.
11
<PAGE> 14
(2) Represents shares of common stock contributed to satisfy our continuing
obligations under this plan.
(3) Taube Hodson Stonex Partners Limited is a discretionary investment advisor
to J. Rothschild Assurance Life Fund, J. Rothschild Assurance Pension Fund,
J. Rothschild International Managed Assurance Fund, J. Rothschild
International Assurance US Managed Fund, St. James's Place International,
TDG Funds Ltd., GAM Worldwide Fund and CTCL A/C The Partners Fund. Taube
Hodson Stonex Partners has power to vote and direct the vote and power to
dispose and direct the disposition of shares held by these funds.
(4) Includes shares of common stock which were acquired pursuant to that certain
Common Stock Purchase Agreement, dated December 2000, between PubliCARD and
the listed selling shareholder.
(5) Includes shares of common stock which may be acquired upon conversion of
PubliCARD's class A preferred stock, second series, issued pursuant to the
December 2000 private placement of such securities.
* Less than 1%.
12
<PAGE> 15
PLAN OF DISTRIBUTION
A total of 2,615,000 shares of common stock may be offered and sold from
time to time by the selling shareholders under this prospectus. Each selling
shareholder will act independently from PubliCARD in making decisions with
respect to the timing, manner and size of each sale. Each selling shareholder
may sell all or a portion of the shares owned by him from time to time through
the Nasdaq National Market and may sell shares of common stock to or through one
or more broker-dealers at prices prevailing on the Nasdaq National Market at the
times of such sales. Each selling shareholder may also make private sales
directly or through one or more broker-dealers. Broker-dealers participating in
such transactions may receive compensation in the form of discounts, concessions
or commissions from the selling shareholders. The selling shareholders and any
broker-dealers who act in connection with sales of common stock may be deemed to
be "underwriters" as that term is defined in the Securities Act, and any
commissions received by them and profit on any resale of the shares of common
stock might be deemed to be underwriting discounts and commissions under the
Securities Act. In effecting sales, broker-dealers engaged by a selling
shareholder may arrange for other broker-dealers to participate.
The selling shareholders will pay all discounts and selling commissions, if
any, fees and expenses of counsel and other advisors to the selling
shareholders, or any of them, and any other expenses incurred in connection with
the registration and sale of the PubliCARD common stock, other than the
registration fee payable to the SEC hereunder, fees and expenses relating to the
registration or qualification of the shares of common stock pursuant to any
applicable state securities or "blue sky" laws and the fees and expenses of
PubliCARD's counsel and independent accountants, which will be paid by
PubliCARD.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 relating to
the common stock being offered. This prospectus is filed as part of the
registration statement. Other parts of the registration statement are omitted
from this prospectus. Statements made in this prospectus concerning the contents
of any contract or other document are not necessarily complete. For a more
complete description of the matter involved, you should read the entire contract
or other document, as applicable.
We are required by the Securities Exchange Act of 1934 to file reports,
proxy statements and other information with the SEC. You may read and copy such
reports, proxy statements and other information at the SEC's public reference
facilities:
<TABLE>
<S> <C> <C>
WASHINGTON, D.C. NEW YORK CHICAGO
Judiciary Plaza Seven World Trade Center Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street
Room 1024 New York, New York 10048 Suite 1400
Washington, D.C. 20549 Chicago, Illinois 60661-2511
</TABLE>
You may call 1-800-SEC-0330 for further information about the public
reference facilities. For a fee, the SEC will send copies of any of our filings
to you. In addition, our filed reports, proxy statements and other information
are contained in the Internet website maintained by the SEC. The address is
http://www.sec.gov.
Our common stock is quoted on the Nasdaq National Market under the symbol
"CARD," and our SEC filings can also be read at the following address:
Nasdaq Operations
1735 K Street, N.W.
Washington, D.C. 20006
The SEC allows us to incorporate by reference the information we file with
it, which means we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be a
part of this prospectus, and later information that we file with the SEC
13
<PAGE> 16
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until all of the securities are sold:
- our Annual Report on Form 10-K for the year ended December 31, 1999, as
amended;
- our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000,
June 30, 2000 and September 30, 2000;
- our current report on Form 8-K dated July 10, 2000; and
- our current report on Form 8-K dated December 18, 2000.
We will provide without charge, upon written or oral request, a copy of any
or all of the documents which are incorporated by reference into this
prospectus. Requests should be directed to:
PubliCARD, Inc.
620 Fifth Avenue
Seventh Floor
New York, New York 10020
Attention: Antonio L. DeLise
(212) 651-3120
LEGAL MATTERS
The validity of the common stock being offered hereby is being passed upon
for PubliCARD by Schnader Harrison Segal & Lewis LLP, Philadelphia,
Pennsylvania. In addition, certain other matters in connection with this
offering will be passed upon for PubliCARD by Kaye, Scholer, Fierman, Hays &
Handler, LLP, New York, New York.
EXPERTS
The financial statements and schedules incorporated by reference from
PubliCARD's Annual Report on Form 10-K for the year ended December 31, 1999 as
amended, in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
14
<PAGE> 17
------------------------------------------------------
------------------------------------------------------
You should rely only on the information contained in this prospectus. No
dealer, sales person or other person is authorized to give information that is
not contained in this prospectus. This prospectus is not an offer to sell nor is
it seeking an offer to buy these securities in any jurisdiction where the offer
or sale is not permitted. The information contained in this prospectus is
correct only as of the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these securities.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
PUBLICARD, INC.
2,615,000 SHARES
COMMON STOCK
--------------------
PROSPECTUS
--------------------
, 2001
------------------------------------------------------
------------------------------------------------------
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated, except for the SEC
registration fee, fees and expenses, other than underwriting discounts and
commissions, in connection with the offering described in this registration
statement:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 1,040
Legal fees and expenses..................................... 12,500
Accounting fees and expenses................................ 3,000
Miscellaneous............................................... 1,460
-------
Total............................................. $18,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Pennsylvania Business Corporation Law (the "PBCL") permits a
corporation to indemnify its directors and officers against expenses, judgments,
fines and amounts paid in settlement incurred by them in connection with any
pending, threatened or completed action or proceeding, other than an action by
or in the right of the corporation (other than an action by or in the right of
the corporation, a "derivative action"), and permits such indemnification
against expenses incurred in connection with any pending, threatened or
completed derivative action, if the director or officer has acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation; and, with respect to any criminal proceeding
in a third-party action, had no reasonable cause to believe his or her conduct
was unlawful. The PBCL provides that expenses incurred in defending any action
or proceeding may be paid by the corporation in advance of the final disposition
upon receipt of an undertaking by or on behalf of the director or officer to
repay the amount if it is ultimately determined that the director or officer is
not entitled to be indemnified by the corporation under Pennsylvania law.
Under the PBCL, the statutory provisions for indemnification and
advancement of expenses are non-exclusive with respect to any other rights, such
as contractual rights, to which a person seeking indemnification or advancement
of expenses may be entitled under PubliCARD's By-laws or otherwise. Such
contractual or other rights may require indemnification against judgments, fines
and amounts paid in settlement incurred by the indemnified person both in
connection with derivative actions and third-party actions, except where the act
or failure to act giving rise to the claim for indemnification is determined by
a court to have constituted willful misconduct or recklessness.
The PBCL permits a corporation to purchase and maintain insurance on behalf
of any director or officer of the corporation against any liability asserted
against the director or officer and incurred in such capacity, whether or not
the corporation would have the power to indemnify the director or officer
against such liability.
Under Section 1713 of the PBCL, if a By-law adopted by the shareholders so
provides, a director shall not be personally liable, as such, for monetary
damages for any action taken or omitted unless the director both (a) breached or
failed to perform the duties of his or her office under Pennsylvania law and (b)
the breach or failure constituted self dealing, willful misconduct or
recklessness.
Article V of PubliCARD's By-laws provides for both the limitation of the
monetary liability of the directors of PubliCARD and for the mandatory
indemnification of directors and officers.
Under Article V of PubliCARD's By-laws, a director will not be held
personally liable to PubliCARD, its shareholders or third parties for monetary
damages as a consequence of any act or omission unless the director both (a)
breached or failed to perform the duties of his or her office under Pennsylvania
law and (b) the breach or failure constituted self dealing, willful misconduct
or recklessness.
II-1
<PAGE> 19
In addition, under Article V of PubliCARD's By-laws, a director, officer
or, at the board of directors' discretion, employee or other person who is or
was serving in any capacity at the request of or for the benefit of PubliCARD,
will be indemnified and held harmless by PubliCARD for all actions taken by him
or her and for all failure to take action to the fullest extent permitted by
Pennsylvania law against all expense, liability and loss, including, without
limitation, attorneys' fees, judgments, fines, taxes, penalties and amounts paid
or to be paid in settlement, actually and reasonably incurred by such director,
officer, employee or other person in connection with any threatened, pending or
completed action, suit or proceeding, including, without limitation, an action,
suit or proceeding by or in the right of PubliCARD, whether civil, criminal,
administrative or investigative. No indemnification is permitted where the act
or failure to act by the person seeking to be indemnified constitutes willful
misconduct or recklessness as determined by a court of competent jurisdiction.
PubliCARD currently maintains directors' and officers' liability insurance
providing for coverage of up to $15,000,000. PubliCARD's assets and equity,
however, may be called upon to provide indemnification to officers and directors
to the extent any indemnified amount exceeds PubliCARD's liability insurance
limit, or to the extent any matter required to be indemnified by PubliCARD's
By-laws falls outside the scope of the policy's coverage.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors and officers pursuant to the foregoing provisions,
PubliCARD has been informed that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<C> <S>
4.1 Amended and Restated Articles of Incorporation, amended and
restated through November 2, 1998, of PubliCARD.
Incorporated by reference to PubliCARD's Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 1998,
dated November 9, 1998.
4.2 By-laws of PubliCARD. Incorporated by reference to
PubliCARD's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, dated March 28, 1991.
4.3 Certificate of Designation, Preferences and Rights of Class
A Preferred Stock, First Series. Incorporated by reference
from PubliCARD's Registration Statement on Form 8-A, dated
September 26, 1988.
4.4 Form of option to purchase common stock of PubliCARD issued
in connection with the Stock Purchase Agreement, dated April
12, 1985, among PubliCARD, Belfour Securities Corporation
and the Purchasers. Incorporated by reference from
PubliCARD's Annual Report on Form 10-K for the year ended
December 31, 1994, dated March 31, 1995.
4.5 Form of Warrant Agreement, dated 1986, between PubliCARD and
J. Henry Schroder Bank & Trust Company, as Warrant Agent.
Incorporated by reference from PubliCARD's Registration
Statement on Form S-1, dated October 8, 1986.
4.6 Form of Amendment No. 1 to Warrant Agreement, dated August
13, 1997, between PubliCARD and Publicker Industries Inc.,
successor to J. Henry Schroder Bank & Trust Company, as
Warrant Agent. Incorporated by reference from PubliCARD's
Current Report on Form 8-K, filed on August 15, 1997.
4.7 Form of Warrant Agreement, dated 1986, between PubliCARD and
Drexel Burnham Lambert Incorporated. Incorporated by
reference from PubliCARD's Registration Statement on Form
S-1, dated October 8, 1986.
4.8 Form of Amendment No. 1 to Warrant Agreement, dated August
13, 1997, between PubliCARD and Harry I. Freund and Jay S.
Goldsmith. Incorporated by reference from PubliCARD's
Current Report on Form 8-K, filed on August 15, 1997.
</TABLE>
II-2
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<C> <S>
4.9 Amended and Restated Rights Agreement, dated as of August 7,
1998, between PubliCARD and Continental Stock Transfer &
Trust Company, as Rights Agent. Incorporated by reference
from PubliCARD's Current Report on Form 8-K, filed on
September 17, 1998.
4.10 Certificate of Designation, Preferences and Rights of Class
A Preferred Stock, Second Series as filed with the
Department of State of the Commonwealth of Pennsylvania on
November 29, 2000. Incorporated by reference to PubliCARD's
Current Report on Form 8-K filed on December 18, 2000.
4.11 Rights Plan, adopted November 1, 2000. Incorporated by
reference from PubliCARD's Current Report on Form 8-K filed
on December 18, 2000.
5.1 Opinion of Schnader, Harrison, Segal & Lewis with respect to
legality of securities being registered.
10.1 Agreements, dated as of August 1987, between PubliCARD and
each of Harry I. Freund and Jay S. Goldsmith concerning a
change of control of PubliCARD. Incorporated by reference
from PubliCARD's Form 8 Amendment to PubliCARD's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1987, filed on December 18, 1987.
10.2 PubliCARD 1991 Stock Option Plan. Incorporated by reference
from PubliCARD's Form 8 Amendment to PubliCARD's Annual
Report on Form 10-K for the year ended December 31, 1991
dated August 14, 1992.
10.3 PubliCARD 1993 Long Term Incentive Plan. Incorporated by
reference from PubliCARD's Annual Report on Form 10-K for
the year ended December 31, 1993, dated March 29, 1994.
10.4 PubliCARD Non-employee Director Stock Option Plan.
Incorporated by reference from PubliCARD's Annual Report on
Form 10-K for the year ended December 31, 1993, dated March
29, 1994.
10.5 Asset Purchase Agreement, dated August 16, 1996, among
Masterview Window Company, Inc., PubliCARD, Hanten
Acquisition Co. and Masterview Acquisition Corp.
Incorporated by reference from PubliCARD's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996, dated
November 14, 1996.
10.6 Agreement and Plan of Merger, dated as of October 30, 1998,
among PubliCARD, Publicker Smart Card Acquisition Co.,
Tritheim Technologies, Inc. and the Security Holders of
Tritheim Technologies, Inc. Incorporated by reference from
PubliCARD's Current Report on Form 8-K, filed on December 7,
1998.
10.7 Termination, Severance and Release Agreement, dated as of
December 3, 1999, between PubliCARD and James J. Weis.
Incorporated by reference from PubliCARD's Annual Report on
Form 10-K for the year ended December 31, 1999, dated March
30, 2000.
10.8 Employment Agreement, dated as of November 2, 1999, between
PubliCARD and Jan-Erik Rottinghuis. Incorporated by
reference from PubliCARD's Annual Report on Form 10-K for
the year ended December 31, 1999, dated March 30, 2000.
10.9 Asset Purchase Agreement, dated June 29, 2000, among
Greenwald Industries, Inc., Greenwald Intellicard, Inc., The
Eastern Company, and PubliCARD, Inc. Incorporated by
reference from PubliCARD's Current Report on Form 8-K, filed
on July 10, 2000.
10.10 PubliCARD's 1999 Stock Option Plan for Non-Employee
Directors. Incorporated by reference from PubliCARD's Annual
Report on Form 10-K for the year ended December 31, 1999
dated March 30, 2000.
10.11 PubliCARD's 1999 Long-Term Incentive Plan. Incorporated by
reference from PubliCARD's Annual Report on Form 10-K for
the year ended December 31, 1999, dated March 30, 2000.
</TABLE>
II-3
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<C> <S>
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Schnader Harrison Segal & Lewis (included in
Exhibit 5.1).
24.1 Power of Attorney (included on the signature page of this
registration statement).
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes to file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement 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.
(b) The undersigned registrant hereby undertakes 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.
(c) The undersigned registrant hereby undertakes 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.
(d) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(f) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-4
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on January 3, 2001.
PUBLICARD, INC.
By: /s/ JAN-ERIK ROTTINGHUIS
------------------------------------
Name: Jan-Erik Rottinghuis
Title: President and Chief Executive
Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Jan-Erik Rottinghuis and Antonio L. DeLise, and either of them, with full power
of substitution and resubstitution, as his true and lawful attorney-in-fact, to
sign and file with the Securities and Exchange Commission on his behalf,
individually and in all capacities, all amendments and post-effective amendments
to this Registration Statement, with exhibits thereto, and other documents in
connection therewith.
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<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JAN-ERIK ROTTINGHUIS Director, Chief Executive Officer and January 4, 2001
------------------------------------ President (principal executive officer)
Jan-Erik Rottinghuis
/s/ HARRY I. FREUND Director and Chairman January 3, 2001
------------------------------------
Harry I. Freund
/s/ JAY S. GOLDSMITH Director and Vice Chairman January 3, 2001
------------------------------------
Jay S. Goldsmith
/s/ CLIFFORD B. COHN Director January 3, 2001
------------------------------------
Clifford B. Cohn
L.G. SCHAFRAN Director January , 2001
------------------------------------
L.G. Schafran
/s/ HATIM A. TYABJI Director January 3, 2001
------------------------------------
Hatim A. Tyabji
/s/ ANTONIO L. DELISE Vice President, Chief Financial Officer and January 3, 2001
------------------------------------ Secretary (principal financial and
Antonio L. DeLise accounting officer)
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II-5
<PAGE> 23
EXHIBIT INDEX
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<CAPTION>
EXHIBIT NO. EXHIBIT PAGE NO.
----------- ------- --------
<C> <S> <C>
4.1 Amended and Restated Articles of Incorporation, amended and
restated through November 2, 1998, of PubliCARD.
Incorporated by reference to PubliCARD's Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 1998,
dated November 9, 1998.
4.2 By-laws of PubliCARD. Incorporated by reference to
PubliCARD's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, dated March 28, 1991.
4.3 Certificate of Designation, Preferences and Rights of Class
A Preferred Stock, First Series. Incorporated by reference
from PubliCARD's Registration Statement on Form 8-A, dated
September 26, 1988.
4.4 Form of option to purchase common stock of PubliCARD issued
in connection with the Stock Purchase Agreement, dated April
12, 1985, among PubliCARD, Belfour Securities Corporation
and the Purchasers. Incorporated by reference from
PubliCARD's Annual Report on Form 10-K for the year ended
December 31, 1994, dated March 31, 1995.
4.5 Form of Warrant Agreement, dated 1986, between PubliCARD and
J. Henry Schroder Bank & Trust Company, as Warrant Agent.
Incorporated by reference from PubliCARD's Registration
Statement on Form S-1, dated October 8, 1986.
4.6 Form of Amendment No. 1 to Warrant Agreement, dated August
13, 1997, between PubliCARD and Publicker Industries Inc.,
successor to J. Henry Schroder Bank & Trust Company, as
Warrant Agent. Incorporated by reference from PubliCARD's
Current Report on Form 8-K, filed on August 15, 1997.
4.7 Form of Warrant Agreement, dated 1986, between PubliCARD and
Drexel Burnham Lambert Incorporated. Incorporated by
reference from PubliCARD's Registration Statement on Form
S-1, dated October 8, 1986.
4.8 Form of Amendment No. 1 to Warrant Agreement, dated August
13, 1997, between PubliCARD and Harry I. Freund and Jay S.
Goldsmith. Incorporated by reference from PubliCARD's
Current Report on Form 8-K, filed on August 15, 1997.
4.9 Amended and Restated Rights Agreement, dated as of August 7,
1998, between PubliCARD and Continental Stock Transfer &
Trust Company, as Rights Agent. Incorporated by reference
from PubliCARD's Current Report on Form 8-K, filed on
September 17, 1998.
4.10 Certificate of Designation, Preferences and Rights of Class
A Preferred Stock, Second Series as filed with the
Department of State of the Commonwealth of Pennsylvania on
November 29, 2000. Incorporated by reference to PubliCARD's
Current Report on Form 8-K filed on December 18, 2000.
4.11 Rights Plan, adopted November 1, 2000. Incorporated by
reference from PubliCARD's Current Report on Form 8-K filed
on December 18, 2000.
5.1 Opinion of Schnader, Harrison, Segal & Lewis with respect to
legality of securities being registered.
10.1 Agreements, dated as of August 1987, between PubliCARD and
each of Harry I. Freund and Jay S. Goldsmith concerning a
change of control of PubliCARD. Incorporated by reference
from PubliCARD's Form 8 Amendment to PubliCARD's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1987, filed on December 18, 1987.
10.2 PubliCARD 1991 Stock Option Plan. Incorporated by reference
from PubliCARD's Form 8 Amendment to PubliCARD's Annual
Report on Form 10-K for the year ended December 31, 1991
dated August 14, 1992.
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<PAGE> 24
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<CAPTION>
EXHIBIT NO. EXHIBIT PAGE NO.
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10.3 PubliCARD 1993 Long Term Incentive Plan. Incorporated by
reference from PubliCARD's Annual Report on Form 10-K for
the year ended December 31, 1993, dated March 29, 1994.
10.4 PubliCARD Non-employee Director Stock Option Plan.
Incorporated by reference from PubliCARD's Annual Report on
Form 10-K for the year ended December 31, 1993, dated March
29, 1994.
10.5 Asset Purchase Agreement, dated August 16, 1996, among
Masterview Window Company, Inc., PubliCARD, Hanten
Acquisition Co. and Masterview Acquisition Corp.
Incorporated by reference from PubliCARD's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996, dated
November 14, 1996.
10.6 Agreement and Plan of Merger, dated as of October 30, 1998,
among PubliCARD, Publicker Smart Card Acquisition Co.,
Tritheim Technologies, Inc. and the Security Holders of
Tritheim Technologies, Inc. Incorporated by reference from
PubliCARD's Current Report on Form 8-K, filed on December 7,
1998.
10.7 Termination, Severance and Release Agreement, dated as of
December 3, 1999, between PubliCARD and James J. Weis.
Incorporated by reference from PubliCARD's Annual Report on
Form 10-K for the year ended December 31, 1999, dated March
30, 2000.
10.8 Employment Agreement, dated as of November 2, 1999, between
PubliCARD and Jan-Erik Rottinghuis. Incorporated by
reference from PubliCARD's Annual Report on Form 10-K for
the year ended December 31, 1999, dated March 30, 2000.
10.9 Asset Purchase Agreement, dated June 29, 2000, among
Greenwald Industries, Inc., Greenwald Intellicard, Inc., The
Eastern Company, and PubliCARD, Inc. Incorporated by
reference from PubliCARD's Current Report on Form 8-K, filed
on July 10, 2000.
10.10 PubliCARD's 1999 Stock Option Plan for Non-Employee
Directors. Incorporated by reference from PubliCARD's Annual
Report on Form 10-K for the year ended December 31, 1999
dated March 30, 2000.
10.11 PubliCARD's 1999 Long-Term Incentive Plan. Incorporated by
reference from PubliCARD's Annual Report on Form 10-K for
the year ended December 31, 1999, dated March 30, 2000.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Schnader Harrison Segal & Lewis (included in
Exhibit 5.1).
24.1 Power of Attorney (included on the signature page of this
registration statement).
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