SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES EXCHANGE ACT OF 1933
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STRATEGIC SOLUTIONS GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN THIS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
11-2964894
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------
JOHN J. CADIGAN, CEO
STRATEGIC SOLUTIONS GROUP, INC.
1598 WHITEHALL ROAD, SUITE E
ANNAPOLIS, MD 21401
(410) 757-2728
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------
COPIES TO:
ERNEST D. PALMARELLA, ESQUIRE
PALMARELLA & SWEENEY, P.C.
993 OLD EAGLE SCHOOL ROAD, SUITE 415
WAYNE, PA 19087
(610) 687-1100
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If any 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. / /
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. / /
<TABLE>
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CALCULATION OF REGISTRATION FEE
- ----------------------- --------------------- -------------------- --------------------- --------------------
Title of Each Class Amount To Be Proposed Maximum Proposed Maximum Registration Fee
of Securities To Be Registered Offering Price Per Aggregate Offering
Registered Share Price
- ----------------------- --------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C>
Common Stock(1) 1,250,000 0.20 250,000 $100.00
- ----------------------- --------------------- -------------------- --------------------- --------------------
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(1) Registered for resale by the selling stockholder. See "Selling
Stockholder."
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.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 18, 2000
PROSPECTUS
1,250,000 SHARES
STRATEGIC SOLUTIONS GROUP, INC.
COMMON STOCK
This Prospectus relates to 1,250,000 shares of Common Stock,
par value $0.0001 per share (the "Shares"), of Strategic Solutions Group, Inc.
(the "Company") issuable to the Selling Stockholder (as defined herein). The
Company will receive none of the proceeds from the sale of the Shares.
The Shares may be offered from time to time by the Selling
Stockholder, or by its pledgees, donees, transferees or other successors in
interest, in transactions (which may include block transactions) on the
over-the-counter market, in private sales or negotiated transactions, through
the writing of options on Shares, or a combination of such methods of sale, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, or at negotiated
prices. The Selling Stockholder may effect such transactions by selling Shares
to or through broker-dealers, and such broker-dealers may receive compensation
in the form of discounts, concessions, or commissions from the Selling
Stockholder and the purchasers of Shares for whom such broker-dealers 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 commissions). The Company
has agreed to indemnify the Selling Stockholder against certain liabilities,
including liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act").
The Common Stock is quoted on the OTC Bulletin Board: SSGI. On
April 17, 2000, the average of the high and low prices of the Common Stock on
the OTC Bulletin Board was $0.4219 per share.
See "Risk Factors" beginning on page 3 for certain information that
should be considered by prospective investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 18, 2000.
<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS IN CONNECTION WITH THE OFFERING CONTAINED HEREIN, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
TABLE OF CONTENTS
Risk Factors.............................................................. 2
Incorporation............................................................. 5
of Certain Documents by Reference......................................... 5
The Company............................................................... 5
Use of Proceeds........................................................... 7
Selling Stockholder....................................................... 7
Experts................................................................... 7
Legal Matters............................................................. 7
Available Information..................................................... 7
RISK FACTORS
THE COMMON STOCK OFFERED HEREBY IS HIGHLY SPECULATIVE IN
NATURE AND INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS AND SPECULATIVE FACTORS INHERENT IN AND
AFFECTING THE BUSINESS OF THE COMPANY AND THE COMMON STOCK PRIOR TO MAKING AN
INVESTMENT IN THE COMPANY. THE COMMON STOCK SHOULD NOT BE PURCHASED BY INVESTORS
WHO DO NOT HAVE SUFFICIENT FINANCIAL MEANS TO SUSTAIN THE LOSS OF THEIR ENTIRE
INVESTMENT.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICITS; UNCERTAINTY
REGARDING ACHIEVEMENT OF PROFITABILITY; GOING CONCERN OPINION. The Company has
incurred net losses in each of its reported fiscal years since inception. The
Company incurred a net operating loss of approximately $415,000, and net income
of approximately $216,000 for the year ended December 31, 1999. The Company
reported net losses of $2.9 million for year ended December 31, 1998 and $2.9
million for the year ended December 31, 1997. The Company's accumulated deficit
through December 31, 1999 was $16.2 million. There is no assurance the Company
will ever achieve profitable operations. The Company's independent accountants,
in their report regarding the Company's consolidated financial statements for
the year ended December 31, 1999, indicated that, since the Company has a
history of recurring losses from operations, an accumulated deficit and
insufficient cash resources to fund planned operations, substantial doubt exists
as to the Company's ability to continue as a going concern.
NEED FOR ADDITIONAL CAPITAL. The Company believes, based upon
current projections, that cash currently on hand should be sufficient to sustain
current operations and finance planned expansion through approximately 2001. The
Company in all likelihood will be required to obtain additional financing in
order to sustain operations beyond that date. There can be no assurance that
such additional financing will be available or, if available, that it will be on
terms acceptable to the Company.
RISK RELATING TO PENNY STOCKS. The Company's Common Stock had been
listed on the Nasdaq Small Cap Market under the symbol "SSGI" and on the Boston
Stock Exchange under the symbol "STG". In February 1998, the Company was
notified by Nasdaq that it was not in compliance with Nasdaq's new net tangible
assets requirement and that the Company's securities were scheduled for
delisting. On September 1, 1998, the stock was formally delisted. In addition,
in July 1998, the Company's stock was delisted from the Boston Stock Exchange
due to its failure to report stockholder's equity of at least $500,000. As a
result of being delisted, trading in the Common Stock is subject to the
requirements of certain rules promulgated under the Exchange Act that require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a penny stock (generally, any non-Nasdaq equity security that
has a market price of less
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than $5.00 per share, subject to certain exceptions). Such rules require the
delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith, and impose
various sales practice requirements on broker-dealers who sell penny stocks to
persons other than established customers and accredited investors (generally
institutions). For these types of transactions, the broker-dealer must make a
special suitability determination for the purchase and have received the
purchaser's written consent to the transaction prior to sale. The additional
burdens imposed upon broker-dealers by such requirements may discourage
broker-dealers from effecting transactions in the Common Stock, which could
severely limit the market liquidity of the Common Stock and the ability of
holders to sell the Common Stock in the secondary market.
UNCERTAINTY OF MARKET ACCEPTANCE FOR CUSTOM SOFTWARE; LENGTH AND
UNCERTAINTY OF SOFTWARE MARKETING EFFORTS. The Company's custom software
products are designed to replace more traditional forms of written and
audiovisual materials used for training in the workplace. Although there is a
substantial market for workplace training materials and products, there is no
assurance that computer-based training materials such as those developed by the
Company will replace the more traditional forms on a large scale. In order to
operate on a profitable basis, the Company will be required to increase
substantially the number and size of new custom software development contracts.
Because the Company's custom software products usually replace existing
methods of doing business, marketing of its products is normally a costly,
time-consuming process. The Company frequently experiences a significant delay
(in some cases up to one year) between the time of initial sales contact and the
signing of a contract and, in many instances, the Company fails to obtain a
contract notwithstanding its marketing efforts. The substantial time and expense
required to procure contracts and the failure to obtain contracts from potential
customers that have been solicited may adversely affect the Company's cash flow
and create other operational problems. Procurement and retention of contracts is
also subject to the risk that customers may decide to develop their own custom
software internally or may cancel their contracts with the Company.
COMPETITION. The information technology consulting, software
development, and business solution markets include a large number of
participants, are subject to rapid change, and are highly competitive. The
Company competes with and faces potential competition for clients and
experienced personnel from a number of companies that have substantially greater
financial, technical, sales, marketing, and other resources, and generate
greater revenues, as well as have greater name recognition than the Company.
These markets are highly fragmented and served by numerous firms, many of which
serve only their respective local markets. In addition, clients may elect to use
their internal information systems resources to satisfy their needs for software
and application development and consulting services, rather than using those
offered by the Company.
The Company's custom multimedia software business competes with
companies that produce interactive training software (custom and off-the-shelf)
and other third-party suppliers of training and marketing materials, as well as
internal training and information systems resources of potential customers.
The Company's clients primarily consist of large organizations,
including agencies of the federal government, and there are an increasing number
of professional services firms seeking information technology consulting and
software development engagements from that client base. The Company believes
that the principal competitive factors in the information technology consulting
and software development industry include responsiveness to client needs,
project completion time, quality of service, price, project management
capability, and technical expertise. The Company believes that it presently
competes favorably with respect to each of these factors. However, the Company's
markets are still evolving and there can be no assurance that the Company will
be able to compete successfully against current and future competitors and the
failure to do so successfully will have a material adverse effect upon the
Company's business, operating results, and financial condition. The Company
believes that its ability to compete also depends in part on a number of
competitive factors outside its control, including, the ability of its
competitors to hire, retain and motivate personnel; the development by others of
software that is competitive with the Company's services; the price at which
others offer comparable services; and the extent of its competitor's
responsiveness to customer needs.
DEPENDENCE ON LIMITED NUMBER OF CUSTOMERS. During fiscal 1999 and 1998,
there were two customers, an automotive manufacturer and a government division,
which accounted for at least 10% of the Company's consolidated revenue. The loss
of any of the Company's major customers, or the inability to collect accounts
receivable from one or more of them, could adversely effect the Company's
business, operating results, and financial condition.
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LIMITED INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS. Most of the
Company's contracts state that its software is proprietary and that title to and
ownership of its software generally reside with the Company. The Company grants
nonexclusive licenses to customers for software developed by the Company for
such customers. Like many software firms, the Company has no patents. The
Company attempts to protect its rights with a combination of copyright, trade
secret laws, and employee and third-party nondisclosure agreements. Despite
these precautions, it may be possible for unauthorized third parties to copy
certain portions of the Company's products or obtain and use information that
the Company regards as proprietary, such as source codes or programming
techniques.
As the number of software products increases and their functionality
further overlaps, the Company acknowledges that software programs could
increasingly become the subject of infringement claims. Although the Company's
products have never been the subject of an infringement claim, there can be no
assurance that third parties will not assert infringement claims against the
Company in the future or that any such assertion may not require the Company to
enter into royalty arrangements or result in costly litigation.
PRODUCT LIABILITY INSURANCE. The Company does not currently carry
product liability insurance and there can be no assurance that such coverage, if
obtainable, would be adequate in terms and scope to protect the Company against
material adverse effects in the event of a successful product liability claim.
Although the Company has not been subject to any product liability claims, such
claims could arise in the future. There can be no assurance that the Company
would have sufficient resources to satisfy any liability resulting from these
claims or would be able to have its customers indemnify the Company against such
claims.
DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL. The
Company has employment agreements with John Cadigan, its chief executive
officer, and Ernest Wagner, its president. The loss of their services or those
of other key personnel could have a material adverse effect on the Company. The
Company also will be required to attract and retain additional managerial, sales
and marketing, financial, and technical personnel in order to expand its
business. There is no assurance the Company can attract and retain qualified
employees.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's quarterly
operating results are subject to significant fluctuations, since sales of custom
commercial software products are to a limited number of customers for individual
projects and because of the unpredictability of contract awards and timing of
payment thereunder. Such fluctuations may increase in the future as the Company
attempts to secure larger contracts.
OUTSTANDING OPTIONS AND WARRANTS--POTENTIAL FURTHER DILUTION TO
STOCKHOLDERS. As of the date of this Prospectus, there are outstanding options
and warrants to purchase an aggregate of 1,586,520 shares of Common Stock with
exercise prices ranging from $0.0469 to $7.875 per share, not including the
Warrants. The terms upon which the Company may be able to obtain additional
equity capital may be adversely affected by such options and warrants, because
the holders thereof can be expected to exercise them at a time when the Company
would, in all likelihood, be able to obtain any needed capital on terms more
favorable to the Company than those provided by the terms of such warrants or
options.
ANTI-TAKEOVER PROVISIONS. The Certificate of Incorporation and By-Laws
of the Company contain provisions which provide for up to three-year terms for
the directors of the Company and the election of such directors on a staggered
basis. In addition, in certain circumstances, Delaware law requires the approval
of two-thirds of all shares eligible to vote for certain business combinations
involving a stockholder owning 15% or more of the Company's voting securities,
excluding the voting power held by such stockholder. Furthermore, Mr. Cadigan's
employment contract provides for a lump sum payment of 299% of his base salary
in the event of a change in control of the Company and his subsequent
termination without cause. In addition to the potential impact on future
takeover attempts and the possible perpetuation of management, the existence of
each of the above provisions and employment agreement could have an adverse
effect on the market price of the Common Stock.
NO DIVIDENDS AND NONE ANTICIPATED. The payment by the Company of
dividends, if any, in the future rests within the discretion of its Board of
Directors and will depend, among other things, upon the Company's earnings, its
capital requirements and its financial condition, as well as other relevant
factors. The Company has not paid or declared any dividends upon its Common
Stock since its inception and does not contemplate or anticipate making any
distributions with respect to its Common Stock in the foreseeable future.
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POSSIBLE VOLATILITY OF STOCK PRICES. The Common Stock has generally
been traded on a limited basis and in small volumes. The trading price for the
Common Stock may be significantly affected by such factors as the operating
results of the Company, the United States and global economic conditions, and
various other factors generally affecting the computer software industry.
Furthermore, the stock market has from time to time experienced extreme price
and volume fluctuations that have particularly affected the market prices of the
stocks of small and emerging growth companies traded on the OTC Bulletin Board.
These extreme fluctuations, which often have been unrelated to the operating
performance of any particular company or to any group of companies, may
adversely affect the market price of the Common Stock.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the
Company are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999.
2. The description of the Company's Common Stock contained in the
Prospectus included in the Company's Registration Statement on Form SB-2 under
the Securities Act (File No. 33-97776), incorporated by reference into the
Company's Registration Statement on Form 8-A under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Shares shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom this Prospectus is delivered, on the written or oral request of any such
person, a copy of any and all of the documents described above, other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference therein. Requests should be directed to: Strategic Solutions Group,
Inc., 1598 Whitehall Road, Suite E, Annapolis, Maryland 21401, telephone (410)
757-2728.
THE COMPANY
During 1999, Strategic Solutions Group, Inc. ("the Company") provided
custom interactive multimedia software. The Company designs, develops, and
markets custom multimedia software used to deliver computer-based and web-based
training, electronic performance support systems, multimedia manuals, sales and
marketing presentations, and corporate communications.
Custom Multimedia Software
The Company provides technical consulting services that include
analysis, design, and development of technology-based solutions and specializes
in providing training solutions. Technology-based training encompasses a wide
range of emerging technologies in the area of employee training, and can come in
the form of computer-based training, web-based training, electronic performance
support systems, and multimedia manuals. In addition, the Company also designs
and develops software for sales and marketing applications and corporate
communications.
Depending on a customer's needs, the Company can produce multimedia
software that includes interactive computer animation, full motion video, audio,
high-end color graphics, text and hypertext providing vivid and effective
instruction and information. The software developed by the Company can be
distributed over multiple platforms including MSWindows and DOS and can be
delivered on diskette, CD-ROM, or the Internet. The Company has adapted its
services using new and emerging technologies, such as internal corporate
intranets or the Internet using the World Wide Web ("Web"). In addition, the
incorporation of Web-Based training ("WBT") allows users to have access from
anywhere in the world. The Company believes that the Internet and intranets will
become increasingly important delivery methods in the future.
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According to a market research firm, International Data Corp. ("IDC"),
companies spent approximately $18 billion worldwide in training for their
workers in 1996 and by the year 2001 that annual bill is expected to grow to
approximately $27.9 billion. In addition, according to IDC, offering employee
training via the Internet and corporate intranets is a business that could grow
at annual rates greater than 100% over the next few years.
Computer-Based Training ("CBT"). The Company designs and develops
custom computer-based training software, which provides an interactive learning
experience to instruct employees how to use complex equipment or to understand
complicated industrial processes by simulating operation and production
procedures. The Company's software typically replaces or supplements technical
manuals and operating documentation and provides interactive self-paced
training. It also often incorporates cut-away views of equipment that would be
difficult or impossible to display in a real-world setting and enables users to
learn complex processes by viewing them in real or lapsed time or in slow
motion. Based on studies conducted and published by the American Society for
Training and Development, management believes that CBT enables users to master
skills and retains information more effectively than traditional instructor-led
training.
Web-Based Training. Recent technological developments and advances in
computer network technology enable the Company to deliver computer-based
training over corporate intranets or the Internet via the Web. Web-based
materials can be text-based (such as, lecture notes, case studies, and
assignments) or they may be much like sophisticated CBT courseware. As a result
of rapidly advancing Web browsers, high-speed communications, and innovative
instructional design, it is possible that real-time animation, video, audio, and
conferencing could be features included in a WBT solution. In addition, the
incorporation of WBT allows users to have access from anywhere in the world. The
Company believes that the Internet and intranets will become increasingly
important delivery methods in the future.
Electronic Performance Support Systems ("EPSS"). The goal of an EPSS is
to provide whatever information is necessary to accelerate performance and
learning at the moment of need - commonly referred to as Help Systems. The
Company designs and develops custom EPSS software to enable users to perform
better at their jobs. This software provides computer-based support that is
integrated into a workstation or work environment, and acts as a combination
coach/trainer/job aid/reference. The Company believes that EPSS increases
employee productivity by providing needed information and training when and
where it is needed - and in an amount and format that is the most useful to the
user.
Multimedia Manuals. The Company provides turn-key multimedia manual
services, using internally developed and off-the-shelf software tools. These
tools enable the division to convert customer manuals, reference guides, or
other technical materials into interactive multimedia software, including
full-motion video, audio, animation and interaction. The Company believes that
these services enable customers to obtain a technology-based solution in less
time and at a relatively low cost as compared to traditional custom software
services.
Sales and Marketing. The Company designs and develops custom sales and
marketing software which enables manufacturers and distributors to demonstrate
their products to potential customers at trade shows or in kiosks. This software
can enhance sales and marketing presentations by encouraging customer
participation through the use of interactive product demonstrations.
Corporate Communications. The Company designs and develops custom
multimedia software for internal and external corporate communications. Examples
include software used to disseminate corporate policies and procedures and
information about a company's products and services. The Company believes that
its custom multimedia development services can be used to create a
technology-based solution, including web-based, that is comprehensive and
cost-effective and delivers lively and compelling messages to large groups of
employees in disparate locations.
Development and Services. The Company's custom multimedia services for
the above technology-based solutions include needs analysis, design
specification and product development. Needs analysis typically takes from three
to four weeks and the charges for such services can range from $10,000 to
$20,000. The design phase lasts from four to six weeks and the charges for such
services can range from $20,000 to $40,000. Depending upon a project's scope and
features, the time required to complete software development can typically range
anywhere from one month to two years and the charges for such services have
ranged from $10,000 to $650,000.
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At the outset of each project, the Company provides the customer with a
statement of work that details the services that the Company will provide, sets
forth the amount that the Company will charge, and provides a work and payment
schedule. Any changes to the project that will result in additional charges are
submitted to the customer for approval prior to providing the services. The
payment schedule varies from customer to customer, but usually includes some
form of up-front payment and progress payments based upon the completion of
phases of the project. To date, the Company has not experienced any significant
difficulties in delivering its custom software products to customers in
accordance with its schedules. Post-development support services are available
and are negotiated under a separate contract and typically billed on an hourly
basis.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares by
the Selling Stockholder.
SELLING STOCKHOLDER
The following table shows the name of the Selling Stockholder, the
number of shares of Common Stock owned by the Selling Stockholder as of the date
of this Prospectus (consisting of shares that were acquired upon redemption of
the Debentures and assuming the exercise of the Warrants), the number of shares
to be sold by such Selling Stockholder, and the number of shares to be owned by
the Selling Stockholder after the Offering (assuming the sale of all of the
Shares offered hereby).
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<CAPTION>
- ------------------------------ --------------------------- --------------------------- ---------------------------
NAME SHARES OWNED SHARES TO BE SOLD SHARES TO BE OWNED AFTER
OFFERING
- ------------------------------ --------------------------- --------------------------- ---------------------------
<S> <C> <C> <C>
Mike Damas 1,250,000 1,250,000 0
- ------------------------------ --------------------------- --------------------------- ---------------------------
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EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-KSB for the year ended December 31,
1999, have been so incorporated in reliance on the report, (which contains an
explanatory paragraph relating to the Company's ability to continue as a going
concern as described in Note 1 to the consolidated financial statements) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed
upon for the Company by Palmarella & Sweeney, P.C., 993 Old Eagle School Road,
Suite 415, Wayne, PA 19087.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports and other information
with the Securities and Exchange Commission (the "Commission"). Reports and
other information filed by the Company with the Commission can be inspected and
copied at the Commission's public reference facilities, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, as well as at the Commission's regional
offices located at 7 World Trade Center, New York, New York 10007 and Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may be obtained from the Public Reference Section of the
Commission at prescribed rates. The Commission maintains an Internet web site
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission that is located
at: http://www.sec.gov.
The Company has filed with the Commission a Registration Statement
under the Securities Act, with respect to the shares of Common Stock offered
hereby. As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information set forth in the Registration Statement.
The omitted information may be inspected without charge at the offices of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of such
information may be obtained upon payment of the fees
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prescribed by the Commission. For further information pertaining to the shares
of Common Stock offered hereby, reference is made to the Registration Statement,
including the exhibits and schedules filed as a part thereof.
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable in connection with
the registration of the Common Stock that is the subject of this Registration
Statement, all of which shall be borne by the Company. All the amounts shown are
estimates, except for the Securities and Exchange Commission filing fee.
To Be Paid By
Registrant
Securities and Exchange Commission Registration Fee $ 100.00
Printing and engraving expenses 500.00
Legal fees and expenses 3,353.00
Accounting fees 2,500.00
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Total $ 6,453.00
============
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL")
permits a corporation to indemnify its directors, officers, employees and other
agents under certain circumstances and subject to certain limitations. The
Company's Bylaws provide that the Company shall indemnify its directors and
officers under the circumstances specified in the DGCL and gives authority to
the Company to purchase insurance with respect to such indemnification.
The Company has entered into indemnification agreements (the
"Indemnification Agreements") with certain officers and directors. Each
Indemnification Agreement provides, among other things, for: (i) indemnification
by the Company of such individual to the fullest extent permitted by the law as
of the date of the Indemnification Agreement against any and all expenses,
judgments, fines, and amounts paid in settlement of any claim against an
indemnified party (the "Indemnitee") unless it is determined, as provided in the
Indemnification Agreement, that the indemnification is not permitted under the
law; and (ii) the prompt advancement of expenses to any Indemnitee in connection
with his or her defense against any threatened or pending claim. Similar
indemnification agreements may from time to time be entered into with additional
officers of the Company or certain other employees or agents of the Company.
Item 16. Exhibits.
(a) The following is a list of exhibits furnished:
4.1* Registration Rights Agreement dated as of March 10, 2000 between the
Company and the Selling Stockholder.
5.1* Opinion of counsel as to legality of securities being registered.
23.1* Consent of counsel (contained in opinion of counsel filed as
Exhibit 5.1).
23.2* Consent of PricewaterhouseCoopers LLP
24.1* Power of Attorney (contained in signature page).
* Filed with this S-3 Registration Statement.
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Item 17. Undertakings.
(a) 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;
(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, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
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.
(b) 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.
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.
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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 Annapolis, Maryland on April 18, 2000.
STRATEGIC SOLUTIONS GROUP, INC.
By: /s/ John J. Cadigan
--------------------------------
John J. Cadigan
Chief Executive Officer
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.
<TABLE>
<CAPTION>
Signature
Title Date
<S> <C> <C>
/s/ John J. Cadigan Chairman of the Board and 5/10/00
- ------------------------------------ Chief Executive Officer ----------------
John J. Cadigan
/s/ Dr. A. David Rossin Director 5/10/00
- ------------------------------------ ---------------
Dr. A. David Rossin
/s/ Dr. Nagesh S. Mhatre Director 5/10/00
- ------------------------------------ ---------------
Dr. Nagesh S. Mhatre
/s/ John Morgenstern Director 5/10/00
- ------------------------------------ ---------------
John Morgenstern
/s/ Ernest A. Wagner President, Chief Operating 5/10/00
- ------------------------------------ Officer, Director ---------------
Ernest A. Wagner
</TABLE>
EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 10, 2000
(this "Agreement"), is made by and between STRATEGIC SOLUTIONS GROUP, INC., a
Delaware corporation (the "Company"), and the entity named on the signature page
hereto (the "Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of March 10, 2000, between the Investor
and the Company (the "Securities Purchase Agreement"), the Company has agreed to
issue to the Investor 1,250,000 shares of Common Stock ("Shares");
WHEREAS, to induce the Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Shares; and
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investor hereby agrees as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall
have the following meanings:
(i) "Investor" means the Investor and any permitted transferee
or assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
(ii) "Potential Material Event" means any of the following:
(a) the possession by the Company of material information not ripe for
disclosure in a registration statement, which shall be evidenced by
determinations in good faith by the Board of Directors of the Company that
disclosure of such information in the registration statement would be
detrimental to the business and affairs of the Company; or (b) any material
engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading absent
the inclusion of such information.
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(iii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iv) "Registrable Securities" means the Shares.
(v) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(b) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. REGISTRATION.
(A) MANDATORY REGISTRATION. The Company shall prepare and file
with the SEC, no later than sixty (60) days following the initial Closing Date
under the Securities Purchase Agreement, a Registration Statement registering
for resale by the Investor all but not less than all, of the Shares. The Company
shall use its best efforts to cause the Registration Statement to be declared
effective no later than one hundred twenty (120) days after the Closing Date.
(B) PAYMENTS BY THE COMPANY.
(i) If the Registration Statement covering the
Registrable Securities is not filed in proper form with the SEC within sixty
(60) days after the Closing Date (the "Required Filing Date"), the Company will
make payment to the Investor in such amounts and at such times as shall be
determined pursuant to this Section 2(b).
(ii) If the Registration Statement covering
the Registrable Securities is not declared or ordered effective within the
earlier of (a) five (5) days after notice by the SEC that it may be declared
effective or (b) one hundred twenty (120) days following the Closing Date (the
"Required Effective Date"), then the Company will make payments to the Investor
in such amounts and at such times as shall be determined pursuant to this
Section 2(b).
(iii) The amount (the "Periodic Amount") to be
paid by the Company to the Investor shall be determined as of each Computation
Date (as defined below) and such amount shall be equal to (A) one percent (1%)
of the purchase price paid by the Investor (the "Purchase Price") for the Shares
purchased and outstanding pursuant to the Securities Purchase Agreement for the
period from the date following the Required Filing Date or the Required
Effective Date, as the case may be, to the first relevant Computation Date, and
(B) three percent (3%) to each Computation Date thereafter. BY WAY OF
ILLUSTRATION AND NOT IN LIMITATION OF THE FOREGOING, IF
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THE REGISTRATION STATEMENT IS TIMELY FILED BUT IS NOT DECLARED EFFECTIVE UNTIL
ONE HUNDRED SEVENTY (170) DAYS AFTER THE CLOSING DATE, THE PERIODIC AMOUNT WILL
AGGREGATE FOUR PERCENT (4%) OF THE PURCHASE PRICE OF THE SHARES (1% FOR DAYS
121-150, PLUS 3% FOR DAYS 151-170). ON THE OTHER HAND, IF THE REGISTRATION
STATEMENT IS NOT FILED UNTIL SEVENTY-FIVE (75) DAYS AFTER THE CLOSING DATE, AND
IS NOT DECLARED EFFECTIVE UNTIL ONE HUNDRED SEVENTY (170) DAYS AFTER THE CLOSING
DATE, THE PERIODIC AMOUNT WILL AGGREGATE SEVEN PERCENT (7%) OF THE PURCHASE
PRICE OF THE SHARES (1% FOR DAYS 61-75, PLUS 3% FOR DAYS 121-150, PLUS 3% FOR
DAYS 151-170.
(iv) Each Periodic Amount will be payable by the
Company in cash or other immediately available funds to the Investor upon demand
of the Investor.
(v) The parties acknowledge that the damages which
may be incurred by the Investor if the Registration Statement has not been
declared effective by the Required Registration Date may be difficult to
ascertain. Therefore, the parties agree that the Periodic Amount represents a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of such damages and that the payment by Company of the
Periodic Amount shall be deemed in complete and total satisfaction of all claims
of Investor against Company for failure of Company to comply with subsections
(b)(i) and (ii) above.
(vi) Notwithstanding the foregoing, the amounts
payable by the Company pursuant to this provision shall not be payable to the
extent any delay in the filing or effectiveness of the Registration Statement
occurs because of an act of, or a failure to act or to act timely by the
Investor or its counsel, or in the event all of the Registrable Securities may
be sold pursuant to Rule 144 or another available exemption under the Act.
(vii) "Computation Date" means (i) the date which
is the earlier of (A) thirty (30) days after the Required Filing Date or the
Required Effective Date, as the case may be, or (B) the date after the Required
Filing Date on which the Registration Statement is filed (with respect to
payments due as contemplated by Section 2(b)(i) hereof) or the date after the
Required Effective Date on which the Registration Statement is declared
effective (with respect to payments due as contemplated by Section 2(b)(ii)
hereof), as the case may be, and (ii) each date which is the earlier of (A)
thirty (30) days after the previous Computation Date or (B) the date after the
previous Computation Date on which the Registration Statement is filed (with
respect to payments due as contemplated by Section 2(b)(i) hereof)or declared
effective (with respect to payments due as contemplated by Section 2(b)(ii)
hereof), as the case may be.
(viii) Anything in the preceding provisions of
this Section 2(b) to the contrary notwithstanding, if, but only if, the
Registration Statement is declared effective within one hundred twenty (120)
days following the Closing Date, the provisions of Section 2(b)(ii) shall not
apply and the Company will not have any obligation to pay any Periodic Amount to
the Investor under the provisions of said Section 2(b)(ii).
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall do each of the
following.
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<PAGE>
(a) Prepare promptly, and file with the SEC by sixty (60) days
after the initial Closing Date, a Registration Statement with respect to the
Shares, and thereafter use its best efforts to cause each Registration Statement
relating to Registrable Securities to become effective the earlier of (a) five
(5) days after notice by the SEC that it may be declared effective or (b) one
hundred twenty (120) days following the initial Closing Date, and keep the
Registration Statement effective at all times until the earliest (the
"Registration Period") of (i) the date that is two years after the Closing Date,
(ii) the date when the Investor may sell all Registrable Securities under Rule
144 or (iii) the date the Investor no longer owns any of the Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel
designated by the Investor to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time prior to their
filing with the SEC, and not file any document in a form to which such counsel
reasonably objects;
(d) Furnish to each Investor whose Registrable Securities are
included in the Registration Statement and its legal counsel identified to the
Company, (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one (1) copy of the Registration
Statement, each preliminary prospectus and prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(e) As promptly as practicable after becoming aware of such
event, notify Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or
4
<PAGE>
omission, and deliver a number of copies of such supplement or amendment to
Investor as Investor may reasonably request;
(f) As promptly as practicable after becoming aware of such
event, notify Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the SEC of a Notice of Effectiveness or any notice of effectiveness or any stop
order or other suspension of the effectiveness of the Registration Statement at
the earliest possible time;
(g) Notwithstanding the foregoing, if at any time or from time
to time after the date of effectiveness of the Registration Statement, the
Company notifies the Investor in writing of the existence of a Potential
Material Event, the Investor shall not offer or sell any Registrable Shares, or
engage in any other transaction involving or relating to the Registrable Shares,
from the time of the giving of notice with respect to a Potential Material Event
until Investor receives written notice from the Company that such Potential
Material Event either has been disclosed to the public or no longer constitutes
a Potential Material Event.
(h) Use its best efforts to secure designation of all the
Registrable Securities covered by the Registration Statement as a National
Association of Securities Dealers Automated Quotations System ("NASDAQ") "Small
Capitalization" within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
quotation of the Registrable Securities on The NASDAQ SmallCap Market; or if,
despite the Company's reasonable efforts to satisfy the preceding clause, the
Company is unsuccessful in doing so, to secure NASDAQ/OTC Bulletin Board
authorization and quotation for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register with the National Association of Securities Dealers, Inc.
("NASD") as such with respect to such Registrable Securities;
(i) Provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(j) Cooperate with the Investor to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to be
offered pursuant to the Registration Statement and enable such certificates for
the Registrable Securities to be in such denominations or amounts as the case
may be, as the Investor may reasonably request, and, within three (3) business
days after a Registration Statement which includes Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and shall cause legal
counsel selected by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the Investor) an appropriate instruction
and opinion of such counsel; and
(k) Take all other reasonable actions necessary to expedite
and facilitate disposition by the Investor of the Registrable Securities
pursuant to the Registration Statement.
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<PAGE>
(l) Use its best efforts to register and qualify Registrable
Securities covered by the Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably appropriate and where
Investor resides for the distribution of the Registrable Securities, the cost of
which shall be borne by Company.
4. OBLIGATIONS OF THE INVESTORS. In connection with
the registration of the Registrable Securities, the Investor shall have the
following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of Investor that Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of the Registrable Securities held by
it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least five (5) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify Investor of the information the Company requires from Investor (the
"Requested Information") if Investor elects to have Investor's Registrable
Securities included in the Registration Statement. If at least two (2) business
days prior to the filing date the Company has not received the Requested
Information from Investor (a "Non-Responsive Investor"), then the Company may
file the Registration Statement without including Registrable Securities of
Non-Responsive Investor;
(b) By Investor's acceptance of the Registrable Securities,
Investor agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless Investor has notified the Company in writing of
Investor's election to exclude all of Investor's Registrable Securities from the
Registration Statement; and
(c) Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e) or
3(f), above, Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(e) or 3(f) and, if so directed by the
Company, Investor shall deliver to the Company (at the expense of the Company)
or destroy (and deliver to the Company a certificate of destruction) all copies
in Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other
than underwriting discounts and commissions and selling expenses including stock
transfer taxes, incurred in connection with registrations, filings or
qualifications made or undertaken pursuant to Section 3, but including, without
limitation, all registration, listing, and qualifications fees, printers and
accounting fees, the fees and disbursements of counsel for the Company, shall be
borne by the Company.
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<PAGE>
6. INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless Investor, the directors, if any, of Investor, the officers, if
any, of Investor, each person, if any, who controls Investor within the meaning
of the Securities Act or the Exchange Act (each, an "Indemnified Person" or
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state
securities law (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to clause (b) of this Section 6, the
Company shall reimburse Investor, promptly as such expenses are incurred and are
due and payable, for reasonable legal fees or other reasonable expenses incurred
by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of such
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, (II)
be available to the extent such Claim is based on a failure of the Investor to
deliver or cause to be delivered the prospectus made available by the Company;
or (III) apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. Investor will indemnify the Company and its
officers, directors and agents against any claims arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company, by or on behalf of such Investor, expressly
for use in connection with the preparation of the Registration Statement,
subject to such limitations and conditions as are applicable to the
Indemnification provided by the Company to this Section 6. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
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(b) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel, with the reasonable fees and
expenses to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such counsel
of the Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential differing or conflicting interests
between such Indemnified Person or Indemnified Party and any other person
represented by such counsel in such proceeding. In such event, the indemnifying
party shall pay for only one separate legal counsel for the Indemnified Party or
Indemnified Person; such legal counsel to be selected by the Indemnified Person
or Indemnified Party, (I) subject to the consent of the indemnifying party
(which consent shall not be unreasonably withheld or delayed), and (II) if the
Indemnified Parties or Indemnified Persons are Investors, by the Investors
holding a majority in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. Except as provided in the
immediately preceding sentences, in case any such action is brought against any
Indemnified Person or Indemnified Party, and it notifies the indemnifying party
of the commencement thereof, after notice from the indemnifying party to such
Indemnified Person or Indemnified Party of the indemnifying person's election so
to assume (alone or with other indemnifying persons) the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for reasonable legal or other out-of-pocket expenses
subsequently incurred by such Indemnified Person or Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not defend such action to its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and out-of-pocket expenses of such counsel shall
not be at the expense of the indemnifying party if the indemnifying party has
assumed the defense of the action with counsel reasonably satisfactory to the
Indemnified Person or Indemnified Party. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that (a) no contribution shall be made under
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circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) contribution by any seller of Registrable Securities,
other than the Company, its officers, directors, independent contractors and/or
agents, shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available
to the Investor the benefits of Rule 144 promulgated under the Securities Act or
any other similar rule or regulation of the SEC that may at any time permit the
Investor to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to Investor so long as Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company and
(iii) such other information as may be reasonably requested to permit the
Investor to sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have
the Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investor to any transferee of the Registrable
Securities only if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company or its
transfer agent or registrar is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, and (d) at or before the time the Company or its transfer
agent or registrar received the written notice contemplated by clause (b) of
this sentence the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions contained herein and the Securities Purchase
Agreement of even date herewith. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such delay, or the
payments set forth in Section 2(b) hereof.
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10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investor. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon Investor and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line facsimile transmission,
receipt confirmed, or other means) or sent by certified mail, return receipt
requested, properly addressed and with proper postage pre-paid (i) if to the
Company, STRATEGIC SOLUTIONS GROUP, INC., 1598 Whitehall Road Suite E.,
Annapolis, MD 21401, ATTN: John J. Cadigan, CEO, Telecopier No.: (410) 757-5094;
with a copy to PALMARELLA & SWEENEY, P.C., ATTN: Ernest D. Palmarella, Esquire,
Telecopier No.: ( 610 )687 - 8830; (ii) if to the Investor, at the address set
forth under its name in the Securities Purchase Agreement, with a copy to JONES
& KELLER, P.C., ATTN: Nathan Stone, Esquire, Telecopier No.: (303) 893-6506; and
(iii) if to any other Investor, at such address as such Investor shall have
provided in writing to the Company, or at such other address as each such party
furnishes by notice given in accordance with this Section 11(b), and shall be
effective, when personally delivered, upon receipt and, when so sent by
registered or certified mail, four (4) calendar days after deposit with the
United States Postal Service.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the City of
Wilmington or the state courts of the State of Delaware sitting in the City of
Wilmington in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on FORUM NON COVENIENS, to the bringing of any such
proceeding in such jurisdictions.
(e) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the
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remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(j) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.
(k) Neither party shall be liable for consequential damages.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
STRATEGIC SOLUTIONS GROUP, INC.
By: /s/ John J. Cadigan
----------------------------
Name: John J. Cadigan
Title: Chief Executive Officer
------------------------------------
By: /s/ Michael Damas
----------------------------
Name: Michael Damas
Title:
12
Exhibit 5.1
April 18, 2000
Strategic Solutions Group, Inc.
1598 Whitehall Road
Suite E
Annapolis, MD 21401
Ladies and Gentlemen:
We have acted as general counsel to Strategic Solutions Group, Inc. Corporation,
a Delaware Corporation (the "Company"). We are aware that the Company is
preparing and filing a Registration Statement on Form S-3 under the Securities
Act of 1933, as amended, relating to the registration of 1,250,000 shares of
Common Stock, par value $0.0001, of the Company (the "Shares") issuable to
Michael Damas. We have been asked by the Company to render an opinion regarding
certain matters relating to the Registration Statement and the issuance of the
Shares as set forth herein.
In rendering this opinion, we have examined such of the Company's documents,
records, certificates, papers and legal matters as we deem necessary to form the
basis of our opinion as expressed herein. Based upon the foregoing, we are of
the opinion that the Shares have been duly authorized and when issued will be
fully-paid and non-assessable under the laws of the State of Delaware.
The foregoing opinion is limited to the matters governed by the business
corporation law of the State of Delaware, in force on the date of this opinion.
This opinion is rendered as of the date hereof and is applicable only the
matters specifically referenced in this opinion. We have no responsibility to
update this opinion and disclaim any continuing responsibility for matters
occurring after the date of this opinion. This opinion is rendered solely for
your benefit in connection with the Registration Statement on the Form S-3
respecting the Shares and may not be relied upon, quoted or used by any other
person or entity for any other purpose without the prior consent of a principal
of this firm.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement on Form S-3 relating to the sale of the Shares.
Very truly yours,
PALMARELLA & SWEENEY, P.C.
Ernest D. Palmarella
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 17, 2000, relating to the
consolidated financial statements which appears in Strategic Solutions Group,
Inc.'s Annual Report on Form 10-KSB for the year ended December 31, 1999. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.
PricewaterhouseCoopers LLP
McLean, Virginia
May 10, 2000
