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Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-50732
PROSPECTUS
1,176,458 SHARES
OPINION RESEARCH CORPORATION
COMMON STOCK
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The selling stockholders listed under the caption "Selling Stockholders"
may sell from time to time all of the 1,176,458 shares offered by this
prospectus.
The selling stockholders may sell or distribute the shares through
underwriters, dealers, brokers or other agents, or directly to one or more
purchasers. The price may be the market price prevailing at the time or a price
privately negotiated.
Opinion Research Corporation will not receive any of the proceeds from the
sale of the shares. However, it will pay substantially all expenses incident to
the registration of the shares.
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The common stock of Opinion Research Corporation is listed with the
American Stock Exchange under the symbol "OPI." On December 20, 2000, the
last reported sale price of the common stock was $5.25 per share.
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Investing in the common stock involves certain risks. See "Risk Factors"
beginning on page 3 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is December 21, 2000.
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Table of Contents
<S> <C>
Risk Factors.............................................................. 3
Where You Can Find More Information....................................... 5
Forward-Looking Statements................................................ 6
Incorporation of Certain Documents by Reference........................... 7
The Company............................................................... 8
Description of Capital Stock.............................................. 8
Use of Proceeds........................................................... 21
Selling Stockholders...................................................... 21
Plan of Distribution...................................................... 22
Indemnification for Securities Act Liabilities............................ 24
Legal Matters............................................................. 24
Experts................................................................... 24
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You should rely only on information or representations contained or
incorporated by reference in this prospectus. No one has been authorized to
provide you with any different information.
Our business and affairs may change following the date of this prospectus.
We do not have an obligation to update the information in this prospectus after
the date on the cover page.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. Additional risks and uncertainties not presently known to
us or that we currently deem immaterial may also impair our business operations.
In the discussion of risk factors which follows and elsewhere in this
prospectus, the terms "we," "our" and "us" refer to Opinion Research Corporation
and its subsidiaries as a combined entity, except where it is clear that the
reference is only to Opinion Research Corporation. When we use the term "ORC,"
it refers only to Opinion Research Corporation.
Our success depends on our ability to retain our existing clients and
obtain new clients.
Our clients generally may terminate the services we provide to them at any
time. The loss of one or more of our large clients or a significant reduction in
the amount of services we provide to one or more of them could have a material
adverse effect on us. The existence of larger projects and long-term client
relationships may increase our reliance on particular clients and projects.
During the first nine months of our current fiscal year, approximately 42% of
our revenue was generated by providing services to various U.S. governmental
departments and agencies.
Our business may suffer if demand for our services declines.
A number of factors that are beyond our control can adversely affect the
demand of our existing clients for our services and impair our ability to
attract new clients. These include marketing budgets, general economic
conditions, consolidations and other industry-specific trends. Changes in
management or ownership of an existing client are factors that can affect the
client's demand for our services. As a result, we may provide different amounts
of services to our clients from year to year, and these differences can
contribute to fluctuations in our operating results.
Our business may suffer if we are unable to retain our key personnel.
We depend upon the efforts and skills of certain of our key senior
executives. If we lose the services of one or more of these individuals it may
have a material adverse effect on us. We do not currently maintain key man life
insurance policies on any of our executives other than
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John F. Short, our chief executive officer, and we have employment agreements
only with certain executive officers. Competition for senior management is
intense, and we may not be successful in retaining our key personnel or in
attracting and retaining other personnel that we may require in the future.
Anti-takeover provisions and our right to issue preferred stock could make
a third-party acquisition of us difficult.
ORC's certificate of incorporation provides that the board of directors may
issue preferred stock without stockholder approval. In addition, ORC's by-laws
provide for a classified board, with each board member serving a three-year
term. The board of directors has also adopted a stockholder rights plan,
commonly referred to as a "poison pill." The issuance of preferred stock, the
existence of a classified board and the stockholder rights plan could make it
more difficult for a third party to acquire us without the approval of our
board. They could also limit the price that certain investors might be willing
to pay in the future for our common stock.
Our attempts to expand our operations into markets where we do not
currently operate may not be successful and our efforts to expand our
international operations will be subject to added risks which are inherent
in doing business abroad.
Part of our business strategy is to expand both domestically and
internationally, and to expand into related businesses through strategic
acquisitions. There can be no assurance that we will be able to so expand or to
identify targets for acquisitions on terms that are attractive to us. Further,
we do not know whether our services will be sufficiently accepted to sustain our
efforts to expand in selected international markets. International expansion
will subject us to risks inherent in doing business abroad, including adverse
fluctuations in currency exchange rates, limitations on asset transfers, changes
in foreign regulations and political turmoil. Furthermore, there can be no
assurance that we will be able to integrate successfully the operations of any
subsequently acquired business with our current operations.
We face competition in our industry.
We face competition in connection with most of the individual services and
products we provide. Our management believes that no single competitor offers a
comparable combination of market research and information services. However,
there can be no assurance that other companies, including some with greater
financial resources than we have, will not attempt to offer a range of services
similar to those offered by us, or otherwise compete more effectively in the
business-to-business customer and market research and information industry. We
regularly experience significant competition for customers seeking consumer
market research services from a large number of competitors. These include
consumer market research companies, advertising agencies and business consulting
firms. We compete for public sector research services with a large number of
firms that vary in size as well as with not-for-profit organizations. We
compete for outbound telemarketing services with a large number of telemarketing
companies.
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We do not currently pay dividends on our common stock and we do not
expect to do so for the foreseeable future.
We expect to retain our future earnings, if any, for the operation and
expansion of our business, and to pay no cash dividends for the foreseeable
future. The terms of our current financing agreements prohibit our payment of
dividends, and other agreements we enter into may contain terms that limit the
amount of dividends we may pay or prohibit any payment of dividends.
Trading volume in our common stock has historically been limited and the
sale of the shares offered by this prospectus could depress the price of
our shares.
The selling stockholders may sell the 1,176,458 shares offered by this
prospectus in the public market from time to time. There is a limited market
for our common stock, and the resale of the shares covered by this prospectus,
which represent approximately 21.5% of our outstanding common stock, may depress
the price of our stock. There can be no assurance that a broader market for our
common stock will develop subsequent to this offering. Selling our shares may
be difficult because smaller quantities of shares are bought and sold and
security analysts' and the news media's coverage about us is limited. These
factors could result in lower prices and larger spreads in the bid and ask
prices for our shares.
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WHERE YOU CAN FIND MORE INFORMATION
Opinion Research Corporation files annual, quarterly and current reports,
proxy and information statements and other information with the Securities and
Exchange Commission (the "Commission"). You can inspect and copy these reports,
proxy and information statements and other information concerning ORC at the
Commission's public reference facilities located at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and its regional offices located
at Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material may be obtained by mail from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the Commission's public reference room in Washington, D.C. by calling the
Commission at 1-800-SEC-0330. The Commission also maintains a Web site at
http://www.sec.gov that contains reports, proxy and information statements, and
other information about ORC.
This prospectus is part of the registration statement on Form S-3 that ORC
filed with the Commission to register shares of its common stock. This
prospectus does not contain all of the information contained in the registration
statement. Parts of documents are incorporated by reference into this
prospectus. You should read these documents in their entirety rather than
relying just on the parts incorporated by reference. Some of these documents
are exhibits to the
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registration statement. The registration statement together with its exhibits
can be inspected and copied at the public reference facilities and regional
offices of the Commission referred to above.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus include forward-looking statements. We have based these forward-
looking statements on our current expectations about future events. These
forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, intentions, financial
condition, results of operations, future performance and business, including:
. statements relating to our business strategy;
. our current and future plans; and
. statements that include the words "may," "could," "should," "would,"
"believe," "expect," "anticipate," "estimate," "intend," "plan" or
similar expressions.
These forward-looking statements are subject to risks, uncertainties, and
assumptions about us and our operations that are subject to change based on
various important factors, some of which are beyond our control. The following
factors, among others, could cause our financial performance to differ
materially from the goals, plans, objectives, intentions and expectations
expressed in our forward-looking statements:
. fluctuations in demand for our services;
. competition;
. our dependence on key personnel;
. leverage and debt service (including sensitivity to fluctuations in
interest rates);
. domestic and global economic, credit and capital market conditions;
. changes in federal or state tax laws or the administration of these
laws;
. regulatory or judicial proceedings; and
. certain other risks described under the heading "Risk Factors."
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If one or more of the assumptions underlying our forward-looking statements
proves incorrect, then our actual results, performance or achievements in future
periods could differ materially from those expressed in, or implied by, the
forward-looking statements contained or incorporated by reference in this
prospectus. Therefore, we caution you not to place undue reliance on our
forward-looking statements.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether written or oral, whether as a result of new information,
changed assumptions, the occurrence of unanticipated events, changes in future
operating results over time or otherwise. All forward-looking statements
attributable to us are expressly qualified by these cautionary statements.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with the Commission, which means that we can disclose important information
to you by referring to those documents. The information incorporated by
reference is an important part of this prospectus. Any statement contained in
the documents filed with the Commission prior to the date of this prospectus
will be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained in this prospectus modifies or supersedes
the statement. Information that we file later with the Commission will
automatically update the information incorporated by reference and the
information in this prospectus.
We incorporate by reference the following documents ORC has filed with the
Commission:
1. the Annual Report on Form 10-K for the year ended December 31, 1999;
2. the Quarterly Reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and September 30, 2000;
3. the Current Report on Form 8-K dated September 15, 2000, amended on
October 30, 2000;
4. the description of ORC's common stock contained in its Form 8-A
Registration Statement filed with the Commission on October 4, 1993,
and any amendments or reports filed for the purpose of updating this
description;
5. the description of ORC's preferred stock purchase rights contained in
its Form 8-A Registration Statement filed with the Commission on
September 27, 1996, and any amendments or reports filed for the
purpose of updating this description; and
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6. all documents filed by ORC with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and before termination of the offering.
You may request a free copy of any of the documents incorporated by
reference in this prospectus, other than exhibits, unless they are specifically
incorporated by reference, by writing or telephoning us at the following
address:
Opinion Research Corporation
Investor Relations
23 Orchard Road
Skillman, New Jersey 08558
(908) 281-5100
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone
else to provide you with different information. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the respective dates on the front of these documents.
THE COMPANY
ORC was established in 1938 to apply the principles of general public
opinion polling to marketing issues facing America's largest companies. We have
evolved to provide primary market research, social research, information
services, marketing services, and model-based telemarketing. ORC offers a
variety of services and products to assist clients with their strategic and
tactical decisions as well as their plans for marketing and selling their
products to other businesses and consumers. We assist clients in evaluating,
monitoring and optimizing the effectiveness of their marketing and sales with a
focus on businesses selling primarily to other businesses. Our services and
products address issues such as customer loyalty and retention, market demand
and forecasting, corporate image, competitive positioning, public sector primary
research, and model-based telemarketing.
The executive offices of Opinion Research Corporation are located at 23
Orchard Road, Skillman, NJ 08558. The telephone number at the executive offices
is (908) 281-5100.
DESCRIPTION OF CAPITAL STOCK
The following is a summary description of ORC's capital stock. The summary
does not purport to be complete and is qualified in its entirety by reference to
ORC's Amended and Restated Certificate of Incorporation, including the
Certificates of Designation describing the designations, preferences,
qualifications, and limitations of each class of ORC's preferred stock, and
ORC's By-laws, which are exhibits to the registration statement of which this
prospectus is a part.
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The authorized capital stock of ORC consists of 10,000,000 shares of common
stock, $.01 par value per share, and 1,000,000 shares of preferred stock, $.01
par value per share.
Common Stock
Holders of the common stock are entitled to one vote per share on all
matters submitted to a vote of stockholders. Subject to any preferences that
have been or may be granted to holders of the preferred stock, holders of the
common stock are entitled to receive ratably any dividends that may be declared
by ORC's board of directors out of funds legally available therefor. In the
event of a liquidation, dissolution or winding up of ORC, holders of the common
stock are entitled to share ratably in all assets remaining after payment of
liabilities and the liquidation preference, if any, that may be granted to the
holders of any series of preferred stock. Holders of the common stock have no
cumulative voting, conversion, preemptive or other rights to subscribe for
additional shares of common stock or other securities of ORC, and there are no
redemption provisions with respect to the common stock. All of the shares of
common stock outstanding are fully paid and nonassessable.
Preferred Stock
ORC's board of directors by resolution may issue up to 1,000,000 shares of
the preferred stock in one or more series and fix the number of shares
constituting any series, the voting power (which may be multiple or fractional
votes per share), designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof, including the dividend rates, terms of redemption (including sinking
fund provisions), redemption price or prices, voting rights, conversion rights
and liquidation preferences of the shares constituting any series, without any
further vote or action by ORC's stockholders. The issuance of preferred stock
by ORC's board of directors could adversely affect the rights of holders of the
common stock to the extent that the preferred stock has preferences over the
common stock with respect to dividends and in liquidation. The following series
of preferred stock have been authorized:
Series A Preferred Stock
On September 13, 1996, ORC's board of directors adopted a Stockholder
Rights Plan (the "Plan"), which provides for the distribution of one purchase
right (a "Right") for each share of ORC's common stock outstanding as of October
3, 1996 (the "Record Date"). Each additional share of common stock issued prior
to the Distribution Date has a Right attached. Each Right entitles the
registered holder, upon the occurrence of certain events described below, to
purchase from ORC a unit consisting of one one-thousandth of a newly issued
share (a "Unit") of ORC's Series A Junior Participating Preferred Stock, par
value $0.01 per share (the "Series A Preferred Stock"), at a purchase price of
$25 per Unit (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between ORC and StockTrans, Inc. (the "Rights Agent").
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The Rights currently attach to all common stock certificates representing
outstanding shares of common stock, and no separate Rights Certificates are
distributed. The Rights will separate from the common stock and a "Distribution
Date" will occur upon the earlier of:
. 10 days following a public announcement that a person or group of
affiliated or associated persons, other than an Exempted Person (as
defined below) (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 20% or more of the
outstanding shares of ORC's common stock (the "Stock Acquisition
Date"); or
. 10 business days following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially
owning 20% or more of the outstanding shares of ORC's Common stock.
Until the Distribution Date,
. the Rights will be evidenced by the common stock certificates and will
be transferred with and only with the common stock certificates;
. new common stock certificates will contain a notation incorporating
the Rights Agreement by reference; and
. the surrender for transfer of any certificates for common stock
outstanding will also constitute the transfer of the Rights associated
with the common stock represented by the certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 3, 2006 if they are not earlier redeemed by
ORC, as described below. At no time will the Rights have any voting power.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to the holders of record of the common stock as of the close of
business on the Distribution Date. Thereafter, the separate Rights Certificates
alone will represent the Rights. Except as otherwise determined by ORC's board
of directors, only shares of common stock issued prior to the Distribution Date
will be issued with Rights.
In the event that an Acquiring Person, other than an Exempted Person (as
defined below), becomes the beneficial owner of 20% or more of the then
outstanding shares of common stock (unless the acquisition is made by a tender
or exchange offer for all of the outstanding shares of ORC, at a price
determined by a majority of the independent directors of ORC who are not
representatives, nominees, affiliates or associates of an Acquiring Person to be
fair and otherwise in the best interest of ORC and its stockholders after
receiving advice from one or more investment banking firms (a "Qualified
Offer")), each holder of a Right will thereafter have the right to receive, upon
exercise, common stock (or, in certain circumstances, cash, property or other
securities of ORC), having a value equal to four times the Exercise Price of the
Right. The
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Exercise Price is the Purchase Price times the number of shares of common stock
associated with each Right (initially, one). Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph (which we refer to as the "Flip-In Events"), all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of any of the Flip-In Events
set forth above until such time as the Rights are no longer redeemable by ORC as
set forth below.
Any person who, together with all of that person's affiliates and
associates, is the beneficial owner of common stock, options and/or warrants
exercisable for shares of common stock representing 20% or more of the shares of
common stock outstanding on September 13, 1996 (the "Rights Dividend Declaration
Date") will be an "Exempted Person." In addition, each of LLR Equity Partners,
L.P., a Pennsylvania limited partnership, and LLR Equity Partners Parallel,
L.P., a Pennsylvania limited partnership, is an "Exempted Person." Furthermore,
any person who, together with all of that person's affiliates and associates
becomes the beneficial owner of common stock, options and/or warrants
exercisable for shares of common stock representing 20% or more of the shares
of common stock then outstanding as a result of a purchase by ORC or any of its
subsidiaries of shares of common stock will also be an "Exempted Person."
However, any person, as a result of purchases by ORC or its subsidiaries, will
no longer be deemed to be an Exempted Person and will be deemed to be an
Acquiring Person if that person, together with all of that person's affiliates
and associates, becomes the beneficial owner, at any time after the Rights
Dividend Declaration Date, of additional securities representing 1,000 or more
shares of common stock, except if the additional shares are acquired
. by the exercise of options or warrants to purchase common stock
outstanding and beneficially owned by the person as of the date the
person became the beneficial owner of 20% or more of the then
outstanding shares of common stock or as a result of an adjustment to
the number of shares of common stock for which the options or warrants
are exercisable pursuant to their terms, or
. as a result of a stock split, stock dividend or similar event.
A purchaser, assignee or transferee of the shares of common stock (or options or
warrants exercisable for common stock) of an Exempted Person will not thereby
become an Exempted Person by the purchase, assignment or transfer.
In the event that following the Stock Acquisition Date:
. ORC engages in a merger or business combination transaction in which
ORC is not the surviving corporation (other than a merger that follows
a tender offer determined to be fair to the stockholders of ORC, as
described above);
. ORC engages in a merger or business combination transaction in which
ORC is the surviving corporation and the common stock is changed or
exchanged; or
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. 50% or more of ORC's assets or earning power is sold or transferred;
each holder of a Right (except Rights that have previously been voided as we
have described above) will thereafter have the right to receive, upon exercise
of the Right, common stock of the acquiring company having a value equal to four
times the Exercise Price of the Right.
The Purchase Price and the number of Units of Series A Preferred Stock or
other securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution
. in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series A Preferred Stock;
. if holders of the Series A Preferred Stock are granted certain rights
or warrants to subscribe for Series A Preferred Stock or convertible
securities at less than the current market price of the Series A
Preferred Stock; or
. upon the distribution to holders of the Series A Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those
referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued. Instead, an adjustment in cash will
be made based on the market price of the Series A Preferred Stock on the last
trading date prior to the date of exercise.
ORC may redeem the Rights in whole, but not in part, at any time until 20
days following the Stock Acquisition Date, at a price of $0.001 per Right. Under
certain circumstances, the decision to redeem will require the concurrence of
75% of the members of the board. Immediately upon any action of ORC's board of
directors ordering redemption of the Rights, the Rights will terminate. In that
event, the Rights will only entitle the holders to receive the $0.001 redemption
price.
Until a Right is exercised, the holder of the Right, as such, will not be
entitled to vote or to receive dividends or have any other right as a
stockholder of ORC. ORC stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable for
common stock (or other consideration).
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by ORC's
board of directors prior to the Distribution Date. After the Distribution Date,
the provisions of the Rights Agreement may be amended by the board (in certain
circumstances, with the concurrence of 75% of the members of the board) in order
to cure any ambiguity, to make changes that do not adversely affect the
interests of holders of the Rights (excluding the interest of any Acquiring
Person), or to shorten
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or lengthen any time period under the Rights Agreement, but no amendment to
adjust the time period governing redemption may be made at a time when the
Rights are not redeemable.
The Rights have certain anti-takeover effects, and will cause substantial
dilution to a person or group that attempts to acquire ORC in certain
circumstances. Accordingly, the existence of the Rights may deter certain
acquirors from making takeover proposals or tender offers. The Rights, however,
are not intended to prevent a takeover, but rather are designed to enhance the
ability of the board of directors to negotiate with a potential acquiror on
behalf of all of ORC's stockholders.
Series B Preferred Stock
On September 1, 2000, ORC issued a total of ten shares of its Series B
Preferred Stock to the selling stockholders. The holders of the Series B
Preferred Stock are not entitled to receive any dividends other than any
dividends which may be received under the dividend right created with the
designation of the rights relating to ORC's Series C Preferred Stock, described
below. The holders of the Series B Preferred Stock are entitled, subject to the
pari passu rights of holders of ORC's Series C Preferred Stock (and any other
series of Preferred Stock with pari passu rights upon liquidation approved by
the holders of a majority of the Series B Preferred Stock), to be paid out of
the assets of ORC legally available for distribution to stockholders a
liquidation preference of $10.00 per share before any distribution of assets is
made to holders of the common stock or any other class or series of capital
stock of ORC that ranks junior to the Series B Preferred Stock as to liquidation
rights.
ORC is entitled to purchase all of the outstanding shares of Series B
Preferred Stock at any time after the selling stockholders and any of their
permitted transferees (as defined) collectively own less than 10% of the common
stock of ORC purchased by the selling stockholders under a purchase agreement
dated as of September 1, 2000 (the "Purchase Agreement") (including for this
purpose, on an as-converted basis, any shares of Series C Preferred Stock). The
per share purchase price payable upon exercise of the call option is the sum of
the liquidation preference amount plus any accrued but unpaid dividends.
As long as the selling stockholders and their permitted transferees
collectively own 75% or more of the common stock purchased pursuant to the
Purchase Agreement, the holders of the Series B Preferred will be entitled to
nominate and elect two directors to ORC's board of directors. However, the
number of directors that may be elected by the holders of the Series B Preferred
Stock is subject to adjustment as follows:
. if the selling stockholders and their permitted transferees
collectively own less than 75% (but not less than 50%) of the common
stock purchased pursuant to the Purchase Agreement (including on an
as-converted basis any shares of Series C Preferred Stock), the number
of directors which may be elected by the holders of Series B Preferred
Stock and Series C Preferred Stock is three (two of which are to be
elected by the holders of the Series B Preferred Stock and one by the
holders of the Series C Preferred Stock, unless the holders of the
Series B Preferred Stock and Series C Preferred Stock otherwise
agree);
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. if the selling stockholders and their permitted transferees
collectively own less than 50% (but not less than 25%) of the common
stock purchased pursuant to the Purchase Agreement (including on an
as-converted basis any shares of Series C Preferred Stock), the number
of directors which may be elected by the holders of Series B Preferred
Stock and Series C Preferred Stock is two (which shall be elected by
the holders of the Series B Preferred Stock, unless the holders of
Series B and Series C Preferred Stock otherwise agree);
. if the selling stockholders and their permitted transferees
collectively own less than 25% (but not less than 10%) of the common
stock purchased pursuant to the Purchase Agreement (including on an
as-converted basis any shares of Series C Preferred Stock), the number
of directors which may be elected by the holders of Series B Preferred
Stock and Series C Preferred Stock is one (which shall be elected by
the holders of the Series B Preferred Stock, unless the holders of
Series B and Series C Preferred Stock otherwise agree); and
. if the selling stockholders and their permitted transferees
collectively own less than 10% of the common stock purchased pursuant
to the Purchase Agreement, the right of the holders of Series B and
Series C Preferred Stock to elect directors will terminate.
In addition to any other vote required by law, the affirmative vote or
written consent of the holders of the Series B Preferred Stock owning a majority
of the outstanding shares of Series B Preferred Stock is necessary for ORC to
effect the following actions:
. any amendment, alteration, repeal, or waiver of any provision of the
certificate of incorporation of ORC, as in effect from time to time,
or the bylaws of ORC which adversely affects the rights, preferences
or privileges of the Series B Preferred Stock or Series C Preferred
Stock;
. any increase in the authorized number of members of ORC's Board of
Directors to more than 11 members;
. the creation of a new class or series of shares which have rights,
preferences or privileges that are senior to, or are equivalent (pari
passu) with, the rights, preferences or privileges of the Series B or
Series C Preferred Stock;
. any merger or consolidation with another company if it is proposed
that the Series B or Series C Preferred Stock will be exchanged for
preferred shares of the other company; and
. the redemption or repurchase of stock or options to purchase stock of
ORC by ORC (other than the exercise of ORC's call option relating to
the Series B Preferred Stock, the repurchase of stock or options from
former employees and consultants of ORC pursuant to repurchase
agreements which have been approved by ORC's board of directors and
the purchase of common stock in an amount not to exceed issuances
pursuant to ORC's employee stock purchase plan, provided
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that these purchases shall not exceed 1,000,000 shares of ORC's common
stock in the aggregate or 300,000 shares of ORC's common stock in any
12-month period ending September 1).
Series C Preferred Stock
On September 1, 2000, ORC authorized the issuance of up to 588,229 shares
of its Series C Preferred Stock. All or any of the authorized shares of Series
C Preferred Stock may be acquired by the selling stockholders at any time on or
after September 1, 2005 (or earlier, upon the occurrence of certain events
described below) by exchanging two shares of common stock for each share of
Series C Preferred Stock being acquired. The following is a description of the
Series C Preferred Stock.
Pursuant to the terms of the Purchase Agreement, the selling stockholders
may exchange two shares of the common stock owned by them into one share of the
Series C Preferred Stock upon the occurrence of the following events:
. upon a Liquidation (as defined below);
. 30 days after written notice from one of the selling stockholders of
an Event of Non-Compliance (as defined below); or
. any time on or after September 1, 2005.
"Liquidation" means any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of ORC, other than any dissolution, liquidation or
winding up in connection with any reincorporation of ORC in another
jurisdiction, or any Corporate Transaction (as defined). "Corporate Transaction"
means
. any consolidation or merger of ORC with or into any other corporation
or other entity or person, or any other corporate reorganization, in
which the stockholders of ORC immediately prior to the consolidation,
merger or reorganization own less than 50% of ORC's voting power
immediately after the consolidation, merger or reorganization,
. any transaction or series of related transactions in which in excess
of 50% of ORC's voting power is transferred to one or more affiliated
persons, or
. a sale, lease, transfer other disposition of all or substantially all
of ORC's assets.
"Event of Non-Compliance" means
. ORC fails to pay any required dividend to holders of the Series C
Preferred Stock,
. ORC's breach or failure to perform or observe any material covenant or
agreement set forth in the Designation of Series C Preferred Stock,
. ORC's or any material subsidiary of ORC making of an assignment for
the benefit of creditors, commencing any proceeding under any
bankruptcy, insolvency or liquidation law of any jurisdiction, or
being the subject of any such bankruptcy or insolvency petition
commenced by a third party, or
. ORC's default in the payment of the principal of any indebtedness with
an aggregate principal amount of in excess of $5 million or in the
performance of any agreement or covenant contained in any agreement or
instrument with respect to any such indebtedness.
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Holders of the Series C Preferred Stock will be entitled to receive
dividends at an annual rate of $2.04 per share, as the dividend may be adjusted
to account for dilution. Dividends on the Series C Preferred Stock must be
declared and set apart or paid on a pari passu basis with the Series B Preferred
Stock and before dividends of any kind may be declared, and before distributions
of any other kind may be made, upon the common stock or any other capital stock
of ORC. The dividends will be cumulative.
In the event ORC declares a distribution payable in securities of other
persons, evidences of indebtedness issued by ORC or other persons, assets
(excluding cash dividends) or options or rights, then the holders of the Series
C Preferred Stock are entitled to a proportionate share of any such distribution
as though the holders of the Series C Preferred Stock were the holders of the
number of shares of common stock into which their shares of Series C Preferred
Stock are convertible as of the record date fixed for the determination of the
holders of common stock entitled to receive the distribution.
In the event of any Liquidation, subject to the pari passu rights of the
Series B Stock, each issued and outstanding share of Series C Preferred Stock
will entitle the holder of record of that share to payment at the rate per share
of $17.00 (the "Preference Amount") (which amount will be adjusted upon the
occurrence of an "Extraordinary Stock Event") plus an amount equal to all
accrued but unpaid dividends, without interest, on a pari passu basis with the
Series B Preferred Stock and before any payment or distribution of the net
assets of ORC shall be made to or set apart for the holders of record of the
issued and outstanding common stock or any other class ranking junior to the
Series C Preferred Stock. As used in this prospectus, the term "Extraordinary
Stock Event" means
. the issuance of additional shares of common stock as a dividend or
other distribution on outstanding common stock,
. a subdivision of outstanding shares of common stock into a greater
number of shares of common stock (i.e., a stock split), or
. a combination of outstanding shares of common stock into a smaller
number of shares of common stock (i.e., a reverse stock split).
If after the payment or provision for the payment of the debts and other
liabilities of ORC, the net assets of ORC are insufficient to pay in full the
preferential amounts to which the holders of record of all the outstanding
shares of the Series B Preferred Stock and the Series C Preferred Stock (and
other holders of pari passu stock) are entitled, the entire net assets of ORC
are to be distributed ratably to the holders of all the outstanding shares of
the Series B Preferred Stock and the Series C Preferred Stock (and other holders
of any other pari passu stock) in proportion to the full amounts to which they
are entitled, and the holders of the common stock and any other classes of
securities ranking junior to the Series C Preferred Stock are in no event to be
entitled to participate in the distribution of the net assets in respect of
their stock.
ORC has a call option to purchase all of the outstanding shares of Series
C Preferred Stock (the "Series C Call Option"). At any time and from time to
time ORC can exercise its Series C Call Option by sending written notice to the
holders of outstanding shares of Series C Preferred Stock. ORC must send any
call notice to the called holders at least 30 days prior to the date specified
in the call notice as the exercise date. ORC may purchase the outstanding
shares of Series C Preferred Stock at a per share amount equal to the greater of
(a) fair market value, or (b) the Preference Amount, as adjusted pursuant to the
terms set forth in the Designation of
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Series C Preferred Stock, multiplied by 25.0% per annum, compounded annually
from August 31, 2000, plus any accrued but unpaid dividends per share.
In the event ORC enters into an agreement to be sold, merged or
consolidated into or with any other company (a "Sale") or the closing of a Sale
occurs within one year from the Exercise Date, the called holders will be
entitled to receive from ORC, within 15 days of the closing of the Sale, in
addition to the call amount, an amount equal to the difference, if any, between
the call amount and the amount the called holders would have received in the
sale of ORC if the called holders were the holders of the number of shares of
common stock into which their shares of Series C Preferred Stock were
convertible immediately prior to the closing of the Sale.
Subject to certain conditions described in this prospectus, each share of
Series C Preferred Stock is convertible at any time and from time to time, at
the option of the holder of record of the shares into fully paid and
nonassessable shares of common stock upon surrender to ORC of the certificate or
certificates representing the Series C Preferred Stock to be converted. The
basis for each conversion shall be the "Series C Conversion Rate" in effect at
the time of conversion, which means the number of shares of common stock
issuable for each share of Series C Preferred Stock surrendered for conversion.
As of August 31, 2000, the Series C Conversion Price was $8.50. In lieu of any
fractional shares of common stock which otherwise are issuable upon conversion
of any shares of Series C Preferred Stock, ORC will pay an amount equal to the
Series C Conversion Price of the fractional share (computed to the nearest one
hundredth of a share) in effect at the close of business on the date of
conversion. As used in this prospectus, the term "Series C Conversion Rate"
means an amount computed by dividing the sum of $17.00 (the "Conversion Amount")
(which amount will be adjusted upon the occurrence of an Extraordinary Stock
Event) by the Series C Conversion Price to determine the number of shares of
common stock into which one share of the Series C Preferred Stock is convertible
at the Series C Conversion Price then in effect. Any shares of Series C
Preferred Stock which are converted will be canceled. The Series C Conversion
Price is subject to adjustment from time to time after August 31, 2000 if ORC
issues any securities by recapitalization or reclassification of the common
stock and upon the occurrence of an Extraordinary Stock Event, and in connection
with certain issuances by ORC of additional common stock.
In addition to any other rights, each holder of shares of Series C
Preferred Stock issued and outstanding will be entitled to notice of any
stockholders' meeting and to a number of votes at the meeting equal to the
number of shares of common stock into which the holder's shares of Series C
Preferred Stock could be converted as of the record date for the meeting. The
holders of the Series C Preferred Stock will vote together with the holders of
the common stock as one class. Other than voting with respect to a merger or
consolidation by ORC in which the Series C Preferred Stock will be exchanged for
preferred shares of another company, the holders of Series C Preferred Stock
will not be entitled to vote as a class with respect to a Corporate Transaction.
If the Series C Preferred Stock was issued today, the holders of Series C
Preferred Stock, as a class, would be entitled, by the affirmative vote of the
holders of a majority of the shares of Series C Preferred Stock, to nominate and
elect two directors to ORC's board of directors (the
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"Series C Preferred Directors"). The right of the holders of the Series C
Preferred Stock to elect directors, if the Series C Preferred Stock is issued,
will be subject to the following adjustments:
. at such time as the selling stockholders and their permitted transferees
collectively own less than 75% (but not less than 50%) of the common
stock purchased pursuant to the Purchase Agreement (including on an as-
converted basis any shares of Series C Preferred Stock), the aggregate
number of directors which may be elected by holders of the Series B
Preferred Stock and Series C Preferred Stock shall be no greater than
three (two of which shall be elected by the holders of the Series B
Preferred Stock and one by the holders of the Series C Preferred Stock,
unless the holders of Series B Preferred Stock and Series C Preferred
Stock otherwise agree);
. at such time as the selling stockholders and their permitted transferees
collectively own less than 50% (but not less than 25%) of the common
stock purchased pursuant to the Purchase Agreement (including on an as-
converted basis any shares of Series C Preferred Stock) the aggregate
number of directors which may be elected by the holders of Series B
Preferred Stock and Series C Preferred Stock shall be no greater than
two (which shall be elected by the Series B holders unless the holders
of Series B Preferred Stock and Series C Preferred Stock otherwise
agree);
. at such time as the selling stockholders and their permitted transferees
collectively own less than 25% (but not less than 10%) of the common
stock purchased pursuant to the Purchase Agreement (including on an as-
converted basis any shares of Series C Preferred Stock), the aggregate
number of directors which may be elected by the holders of Series B
Preferred Stock and Series C Preferred Stock shall be no greater than
one (which shall be elected by the holders of the Series B Preferred
Stock unless the holders of Series B Preferred Stock and Series C
Preferred Stock otherwise agree); and
. at such time as the selling stockholders and their permitted transferees
collectively own less than 10% of the common stock purchased pursuant to
the Purchase Agreement (including on an as-converted basis any shares of
Series C Preferred Stock), the right of the holders of Series B
Preferred Stock and Series C Preferred Stock to elect directors shall
terminate.
In addition to any other required vote or consent, the affirmative vote or
written consent of the holders of Series C Preferred Stock owning a majority of
the outstanding shares of Series C Preferred Stock shall be necessary to effect
or validate the following actions:
. Any amendment, alteration, repeal, or waiver of any provision of the
certificate of incorporation of ORC, as in effect from time to time, or
the bylaws of ORC which adversely affects the rights, preferences or
privileges of the Series C Preferred Stock;
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. Any increase in the authorized number of members of ORC's board of
directors to more than 11 members;
. The creation of a new class or series of shares which have rights,
preferences or privileges that are senior to, or are equivalent (pari
passu) with the rights, preferences or privileges of the Series C
Preferred Stock;
. Any merger or consolidation by ORC with another company if it is
proposed that the Series C Preferred Stock will be exchanged for
preferred shares of the other company;
. The redemption or repurchase of stock or options to purchase stock of
ORC by ORC (other than the exercise of the Call Option pursuant to the
terms set forth in this Designation of Series C Preferred Stock, the
repurchase of stock or options from former employees and consultants of
ORC pursuant to repurchase agreements which have been approved by the
ORC's board of directors and the purchase of common stock (the "Purchase
Plan Related Purchases") in an amount not to exceed issuances pursuant
to ORC's Employee Stock Purchase Plan, provided that ORC's Purchase Plan
Related Purchases shall not exceed 1,000,000 shares of common stock in
the aggregate or 300,000 shares of common stock in any 12-month period
ending August 31 without the approval of the holders of Series C
Preferred Stock as provided above);
. Any declaration or payment or any dividends or distribution upon any of
common stock or other equity securities for dividends payable on the
Series C Preferred Stock.
Delaware Anti-Takeover Law, Certain Charter and By-Law Provisions and the
Management Voting Trust.
Certain provisions of the Delaware General Corporation Law and of ORC's
certificate of incorporation and by-laws, each as amended, all as summarized in
the following paragraphs, may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a stockholder
might consider in his or her best interests, including those attempts that might
result in a premium over the market price for the shares held by stockholders.
Delaware Anti-Takeover Law. ORC, a Delaware corporation, is subject to the
provisions of the General Corporation Law of the State of Delaware, including
Section 203, an anti-takeover law. In general, this law prohibits a public
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which that person became an interested stockholder unless:
. prior to such date, the board of directors approves the business
combination; or
. upon becoming an interested stockholder, the stockholder then owns at
least 85% of the voting securities, as defined in Section 203; or
. subsequent to such date, the business combination is approved by both
the board of directors and the stockholders.
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"Business combination" is defined to include mergers, asset sales and other
similar transactions with an "interested stockholder." An "interested
stockholder" is defined as a person who, together with affiliates and
associates, owns (or, within the prior three years, did own) 15% or more of the
corporation's voting stock. Although Section 203 permits ORC to elect not to be
governed by its provisions, ORC to date has not made this election.
Classified Board of Directors. ORC's by-laws provide for the board of
directors to be divided into three classes of directors serving staggered three-
year terms. As a result, approximately one-third of the board of directors will
be elected each year. Under the Delaware General Corporation Law, in
the case of a corporation having a classified board of directors, stockholders
may remove a director only for cause. This provision, when coupled with the
provision of the by-laws authorizing only the board of directors to fill a
vacant directorship, will preclude a stockholder from removing incumbent
directors without cause and simultaneously gaining control of the board of
directors by filling the vacancies created by such removal with its own
nominees.
Special Meeting of Stockholders. The by-laws provide that special meetings
of stockholders of ORC may be called only by the board or ORC's chief executive
officer. This provision will make it more difficult for stockholders to take
action opposed by the board of directors.
Stockholder Action by Written Consent. ORC's certificate of incorporation
provides that no action required or permitted to be taken at an annual or a
special meeting of the stockholders of ORC may be taken without a meeting unless
the action is authorized by the unanimous consent in writing of all
stockholders.
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. ORC's by-laws provide that stockholders seeking to bring business
before a meeting of stockholders, or to nominate candidates for election as
directors at a meeting of stockholders, must provide timely notice thereof in
writing. To be timely, a stockholders' notice must be delivered to, or mailed
and received at, ORC's principal executive offices
. in the case of an annual meeting that is called for a date that is
within 30 days before or after the anniversary date of the immediately
preceding annual meeting of stockholders, not less than 60 days nor
more than 90 days prior to such anniversary date, and
. in the case of an annual meeting that is called for a date that is not
within 30 days before or after the anniversary date of the immediately
preceding annual meeting, or in the case of a special meeting of
stockholders, not later than the close of business on the tenth day
following the date on which notice of the date of the meeting was
mailed or public disclosure of the date of the meeting was made,
whichever occurs first.
The by-laws also specify certain requirements for a stockholders' notice to be
in proper written form. These provisions may preclude some stockholders from
bringing matters before the stockholders at an annual or special meeting or from
making nominations for directors at an annual or special meeting.
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Amendment to the By-laws. ORC's certificate of incorporation and by-laws
provide that the vote of a majority of all directors then serving or the vote of
holders of a majority of the outstanding stock entitled to vote is required to
alter, amend or repeal the by-laws.
Transfer Agent
The Transfer Agent for ORC's common stock is StockTrans, Inc.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares covered by
this prospectus. We will, however, pay substantially all expenses related to the
registration of the shares.
SELLING STOCKHOLDERS
The name of each selling stockholder and the aggregate number of shares of
common stock that each selling stockholder may offer and sell by this prospectus
are set forth in the table below. Because the selling stockholders may sell or
distribute all or a portion of the shares at any time and from time to time
after the date of this prospectus, we cannot estimate the number of shares of
common stock that each selling stockholder may have upon completion of this
offering.
Shares of Common
Stock Owned Prior Shares to be Offered for
Selling Stockholder to the Offering* the Selling Stockholder
------------------- ------------------ ------------------------
LLR Equity Partners, L.P. 1,068,065 1,068,065
LLR Equity Partners Parallel, 108,393 108,393
L.P.
---------- ----------
1,176,458 1,176,458
------------------
*Does not include, in the case of LLR Equity Partners, L.P., a warrant to
purchase up to 672,274 shares of common stock, and, in the case of LLR Equity
Partners Parallel, L.P., a warrant to purchase up to 68,226 shares of common
stock. The warrants are exercisable from time to time, in whole or in part,
through September 1, 2010 at a price of $12.00 per share.
The selling stockholders hold 10 shares of ORC's Series B Preferred Stock,
which currently entitle the selling stockholders to appoint two members of ORC's
board of directors. The selling stockholders also may exchange all or any of the
shares of common stock currently held by them for shares of ORC's Series C
Preferred Stock. For more information regarding the rights of the holders of the
Series B Preferred Stock and the Series C Preferred Stock, see "Description of
Capital Stock."
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PLAN OF DISTRIBUTION
We will not receive any of the proceeds from the sale of the securities by
the selling stockholders. The selling stockholders may sell the securities from
time to time directly to purchasers. Alternatively, the selling stockholders may
from time to time offer the securities through underwriters, brokers, dealers or
agents who may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of the
securities from whom they may act as agent. Any brokers, dealers or agents who
participate in the distribution of the securities may be deemed to be
"underwriters," and any profits on the sale of the securities by them and any
discounts, commissions or concessions received by any brokers, dealers or agents
might be deemed to be underwriting discounts and commissions under the
Securities Act. To the extent the selling stockholders may be deemed to be
underwriters, the selling stockholders may be subject to some statutory
liabilities of the Securities Act, including, but not limited to, Sections 11,
12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.
The securities offered hereby may be sold from time to time by the selling
stockholders, or, to the extent permitted by pledgees, donees, transferees or
other successors in interest. The securities may be disposed of from time to
time in one or more transactions through any one or more of the following:
(a) a block trade in which the broker or dealer so engaged will attempt to
sell the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by that broker
or dealer for its account;
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
(d) an exchange distribution in accordance with the rules of that exchange
or transactions in the over-the-counter market;
(e) in transactions other than in the over-the-counter market;
(f) through the writing of put or call options on the securities;
(g) short sales of the securities and sales to cover the short sales;
(h) the pledge of the securities as security for any loan or obligation,
including pledges to brokers or dealers who may, from time to time,
themselves effect distributions of the securities or interest therein;
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(i) the distribution of the securities by any selling stockholder to its
partners, members or stockholders; and
(j) a combination of any of the above.
These sales may be made at prices and at terms then prevailing or at prices
related to the then current market price or at negotiated prices and terms. In
effecting sales, brokers or dealers may arrange for other brokers or dealers to
participate.
At any time a particular offer of the securities is made, a revised
prospectus or prospectus supplement, if required, will be distributed which will
set forth the aggregate amount and type of securities being offered and the
terms of the offering, including the name or names of any underwriters, dealers
or agents, any discounts, commissions and other items constituting compensation
from the selling stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. The prospectus supplement and, if
necessary, a post-effective amendment to the registration statement of which
this prospectus is a part, will be filed with the Securities and Exchange
Commission to reflect the disclosure of additional information with respect to
the distribution of the securities. In addition, the securities covered by this
prospectus may be sold in private transactions or under Rule 144 rather than
pursuant to this prospectus.
Under the securities laws of some states, the securities may be sold in
these states only through registered or licensed brokers or dealers. In
addition, in some states, the securities may not be sold unless the securities
have been registered or qualified for sale in the state or an exemption from
registration or qualification is available and complied with.
The selling stockholders and any other person participating in the
distribution will be subject to applicable provisions of the Exchange Act,
including, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the securities by the selling stockholders and any
other person. Furthermore, under Regulation M under the Exchange Act, any person
engaged in the distribution of the securities may not simultaneously engage in
market-making activities with respect to the particular securities being
distributed for particular periods prior to the commencement of the
distribution. All of the foregoing may affect the marketability of the
securities and the ability of any person or entity to engage in market-making
activities with respect to the securities.
Pursuant to the Registration Rights Agreement entered into in connection
with the initial offer and sale of the common stock by us, each of ORC and the
selling stockholders will be
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indemnified by the other against particular liabilities, including some
liabilities under the Securities Act, or will be entitled to reimbursement in
connection therewith.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the securities to the public other than
commissions, fees and discounts of underwriters, brokers, dealers and agents. We
estimate that the total expenses of this offering that will be paid by us is
$35,000.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Restated Certificate of Incorporation and the Amended and Restated
Bylaws of ORC provide that ORC will indemnify its officers and directors to the
fullest extent permitted by Delaware law against certain liabilities and
expenses incurred by such persons in connection with claims made by reason of
their being an officer or director. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers
or persons controlling the registrant pursuant to the foregoing documents, the
registrant has been informed 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.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for ORC by
Wolf, Block, Schorr and Solis-Cohen LLP, Philadelphia, Pennsylvania.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended December 31, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedule are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
Folisi, Samz & Company, independent auditors, have audited the financial
statements of CJ Research, Inc. included in our Current Report on Form 8-K dated
September 15, 2000, amended on October 30, 2000, as set forth in their report,
which is incorporated by reference in this prospectus and elsewhere in the
registration statement. Such financial statements are incorporated by reference
in reliance on Folisi, Samz & Company's report, given on their authority as
experts in accounting and auditing.
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