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As filed with the Securities and Exchange Commission on April 5, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
MACE SECURITY INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
_______________
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Delaware 03-0311630
(State or other jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
Louis D. Paolino, Jr.
Chief Executive Officer
Mace Security International, Inc.
1000 Crawford Place, Suite 400 1000 Crawford Place, Suite 400
Mt. Laurel, New Jersey 08054 Mt. Laurel, New Jersey 08054
(856) 778-2300 (856) 778-2300
(Address, Including Zip Code, and Telephone Number, (Name, Address, Including Zip Code, and Telephone
Including Area Code, of Registrant's Principal Executive Offices) Number, Including Area Code, of Agent for Service)
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_________________
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement, as determined
by market conditions and other factors.
If the only securities being registered on this form are being offered
under 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 under Rule 415 under the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
under 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 under 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 under Rule 434, please
check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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Amount Proposed Maximum Proposed Maximum Amount of
Title of Shares to be Offering Price Aggregate Registration
to be Registered Registered Per Share(1) Offering Price(1) Fee
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 838,737 $4.71875 $3,957,790.22 $1,045.00
==================================================================================================
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(1) Calculated pursuant to Rule 457(c)
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>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
To be completed, dated April 5, 2000
Prospectus
MACE SECURITY INTERNATIONAL, INC.
UP TO 838,737 SHARES OF COMMON STOCK
This prospectus relates to the offer and sale from time to time by the
holders of up to 838,737 shares of our common stock. These shares consist of
the following:
- 348,700 shares of common stock
- 120,000 of common stock issuable upon the exercise of warrants
- up to 370,037 shares into which we estimate is the maximum number of
shares into which a $1,339,532.22 convertible debenture to be issued to one of
our stockholders will be converted at the lowest exercise price
Our common stock is currently traded on The Nasdaq National Market under
the symbol "MACE." The closing price of our common stock on The Nasdaq National
Market on April 3, 2000 was $4.56 per share.
______________
These securities involve a high degree of risk. See "Risk Factors"
beginning on page 3 of this prospectus.
______________
Our principal executive office is located at 1000 Crawford Place, Suite
400, Mt. Laurel, New Jersey 08054, and our telephone number is (856) 778-2300.
______________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
______________
This prospectus is dated April 5, 2000.
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TABLE OF CONTENTS
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Page
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RISK FACTORS........................................................... 3
THE COMPANY............................................................ 8
CAUTIONARY STATEMENT................................................... 8
DIVIDEND POLICY........................................................ 9
USE OF PROCEEDS........................................................ 9
REGISTERED STOCKHOLDERS................................................ 10
PLAN OF DISTRIBUTION................................................... 11
LEGAL OPINION.......................................................... 12
EXPERTS................................................................ 12
WHERE YOU CAN FIND MORE INFORMATION.................................... 13
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RISK FACTORS
Before you decide to invest, you should consider carefully the risks
described below, together with the information provided in the other parts of
this prospectus. Any or all of these factors or others not mentioned below
could affect our prospects as a whole.
General Risks
- -------------
We need to raise additional capital
At December 31, 1999, we had negative working capital of approximately $1.4
million. Our business plan will require significant additional capital to fund
acquisitions and internal development and growth. Our capital requirements also
include working capital for daily operations and significant capital for
equipment purchases. To the extent that we lack cash to meet our further capital
needs, we will be required to raise additional funds through bank borrowings and
significant additional equity and/or debt financings, which may result in
significant increases in leverage and interest expense and/or substantial
dilution. We cannot assure you that we will obtain the necessary financing. If
we are unable to raise additional capital, we will need to substantially reduce
the scale of our operations and curtail our business plan.
We have a history of losses, we have working capital deficits and we may incur
continuing charges
We have reported net losses and working capital deficits in prior fiscal
years and we have recently expended substantial funds for acquisitions and
equipment. In connection with financing acquisitions and business growth, we
anticipate that we will continue to incur significant debt and interest charges.
In addition, we will recognize goodwill amortization charges in connection with
our acquisitions that are accounted for under the "purchase" method of
accounting. The amount of goodwill recognized is the amount by which the
purchase price of a business exceeds the fair market value of the assets
acquired. Goodwill is amortized over a period not to exceed 25 years depending
on the business acquired, resulting in an annual non-cash charge to our earnings
during that period. As we continue to acquire additional businesses, our
financial position and results of operations may fluctuate significantly from
period to period.
Our business plan poses risks for us
Our business objective is to develop and grow a full service, integrated
car care business through acquisitions of car washes and through the internal
development of our car wash facilities by adding gasoline pumps, oil change
facilities and convenience stores to our locations. We have repositioned our
company from a company involved primarily in the production of consumer defense
products to a company that also offers car wash and car care services. This
strategy involves a number of risks, including:
. Risks associated with growth;
. Risks associated with acquisitions;
. Risks associated with the recruitment and development of management
and operating personnel; and
. Risks associated with lack of experience in the car service
industries.
If we are unable to manage one or more of these associated risks
effectively, we may not realize our business plan.
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We have a limited operating history regarding our car wash and car service
businesses
Since July 1999, our main business has been the acquisition and operation
of car wash and car service facilities, which now account for more than half of
our revenues. Because of our relatively limited operating history with respect
to these businesses, we cannot assure you that we will be able to operate them
successfully.
We may not be able to manage growth
If we succeed in growing, growth will place significant burdens on our
management and on our operational and other resources. We will need to attract,
train, motivate, retain and supervise our senior managers and other employees
and develop a managerial infrastructure. If we are unable to do this, we will
not be able to realize our business objectives.
Our stock price is volatile
Our common stock's market price has been and is likely to continue to be
highly volatile. Factors like fluctuations in our quarterly revenues and
operating results, our ongoing acquisition program, market conditions and
economic conditions generally may impact significantly our common stock's market
price. In addition, as we continue to acquire additional car wash businesses,
we may agree to issue common stock that will become available generally for
resale and may have an impact on our common stock's market price.
Risks of Acquisitions
- ---------------------
In General. Our strategy to grow in part through acquisitions depends upon
our ability to identify suitable acquisition candidates, and to consummate
acquisitions on financially favorable terms. This strategy involves risks
inherent in assessing acquisition candidates' values, strengths, weaknesses,
risks and profitability and risks related to the financing, integration and
operation of acquired businesses, including:
. adverse short-term effects on our reported operating results;
. diversion of management's attention;
. dependence on hiring, training and retaining key personnel; and
. risks associated with unanticipated problems or latent liabilities.
We cannot assure you that acquisition opportunities will be available, that
we will have access to the capital required to finance potential acquisitions,
that we will continue to acquire businesses, or that any acquired business will
be profitable.
We may not be able to integrate businesses we acquire and achieve operating
efficiencies
We are in the process of combining the businesses and assets that we have
acquired recently into an integrated operating structure. Our future growth and
profitability depend substantially on our ability to operate and integrate
acquired businesses. Our strategy is to achieve economies of scale and brand-
name recognition in part through acquisitions that increase our size. We cannot
assure you that our efforts to integrate acquired operations will be effective
or that we will realize expected results. Our failure to achieve any of these
results could have a material adverse effect on our business and results of
operations.
We face potential liabilities associated with acquisitions of businesses
The businesses we acquire may have liabilities that we do not discover or
may be unable to discover during our preacquisition investigations, including
liabilities arising from environmental contamination or
4
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prior owners' non-compliance with environmental laws or other regulatory
requirements, and for which we, as a successor owner or operator, may be
responsible.
Risks of Particular Business Lines
- ----------------------------------
We face risks associated with our consumer safety products
We face claims of injury allegedly resulting from our defense sprays. We
cannot assure you that our insurance coverage will be sufficient to cover any
judgments won against us in these lawsuits. If our insurance coverage is
exceeded, we will have to pay the excess liability directly. We are also aware
of several claims that defense sprays used by law enforcement personnel resulted
in deaths of prisoners and of suspects in custody. While we no longer sell
defense sprays to law enforcement agencies, it is possible that the increasing
use of defense sprays by the public could, in the future, lead to additional
product liability claims.
Our car wash business may suffer under certain weather conditions
Seasonal trends in some periods may affect our car wash business. In
particular, long periods of rain can affect adversely our car wash business as
people typically do not wash their cars during such periods. Conversely,
extended periods of warm, dry weather may encourage customers to wash their own
cars which can affect adversely our car wash business.
Consumer demand for our car wash services is unpredictable
Our financial condition and results of operations will depend substantially
on consumer demand for car wash services. Our business depends on consumers
choosing to employ professional services to wash their cars rather than washing
their cars themselves or not washing their cars at all. We cannot assure you
that consumer demand for car wash services will increase as our business
expands. Nor can we assure you that consumer demand will maintain its current
level.
We must maintain our car wash equipment
Although we undertake to keep our car washing equipment in proper operating
condition, the operating environment found in car washes results in frequent
mechanical problems. If we fail to properly maintain the equipment, the car
wash could become inoperable resulting in a loss of revenue to us from the
inoperable location.
Our car wash and car services and consumer safety product businesses face
governmental regulation
Car Wash and Car Service Businesses. We are governed by federal, state and
-----------------------------------
local laws and regulations, including environmental regulations, that regulate
the operation of our car wash centers and other car services businesses. Car
wash centers utilize cleaning agents and waxes in the washing process that are
then discharged in waste water along with oils and fluids washed off of
vehicles. Other car services, such as gasoline and lubrication, use of a number
of oil derivatives and other regulated hazardous substances. As a result, we
are governed by environmental laws and regulations dealing with, among other
things:
. transportation, storage, presence, use, disposal and handling of
hazardous materials and hazardous wastes;
. discharge of stormwater; and
. underground storage tanks.
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If any of the previously mentioned substances were found on our property,
however, including leased properties, or if we were found to be in violation of
applicable laws and regulations, we could be responsible for clean-up costs,
property damage and fines or other penalties, any one of which could have a
material adverse effect on our financial condition and results of operations.
Consumer Safety Products. The distribution, sale, ownership and use of
------------------------
consumer defense sprays are legal in some form in all 50 states and the District
of Columbia. We cannot assure you, however, that restrictions on the
manufacture or use of consumer defense sprays will not be enacted that would
have an adverse impact on our financial condition.
Some of our consumer defense spray manufacturing operations currently
incorporate hazardous materials, the use and emission of which are regulated by
various state and federal environmental protection agencies, including the
Environmental Protection Agency. We believe that we are in compliance currently
with all state and local statutes governing our disposal of these hazardous
materials, but if there are any changes in environmental permit or regulatory
requirements, or if we fail to comply with any environmental requirements, these
changes or failures may have a material adverse effect on our business and
financial condition.
Additional Risks
- ----------------
We face significant competition
The extent and kind of competition that we face varies. The car wash
industry is highly competitive. Competition is based primarily on location,
facilities, customer service, available services and rates. Because barriers to
entry into the car wash industry are relatively low, competition may be expected
to continually arise from new sources not currently competing with us. In this
sector of our business we also face competition from outside the car wash
industry, such as gas stations and convenience stores, that offer automated car
wash services. In some cases, these competitors may have significantly greater
financial and operating resources than we do. In our car service businesses, we
face competition from a number of sources, including regional and national
chains, gasoline stations and companies and automotive companies and specialty
stores, both regional and national.
Our operations are dependent substantially on the services of our executive
officers, particularly Louis D. Paolino, Jr.
Our operations are dependent substantially on the services of our executive
officers, particularly Louis D. Paolino, Jr., our Chairman of the Board, Chief
Executive Officer and President. If we lose Mr. Paolino's services or that of
one or more of our other executive officers, the loss could have a material
adverse effect on our business and results of operations. We do not maintain
key-man life insurance policies on our executive officers.
We are controlled by Louis D. Paolino, Jr., giving him a great deal of influence
over our affairs.
Louis D. Paolino, Jr., our President, Chief Executive Officer and Chairman
of our Board of Directors, owns or has the right to vote approximately 32
percent of our outstanding stock, giving him a great deal of influence over our
affairs. Mr. Paolino's influence could affect important functions, including the
election of our Board members and our ability to enter into transactions with
affiliates and related parties and the approval or prevention of any proposed
merger, sale of assets or other business combination. Mr. Paolino's influence,
thus, could prevent us from doing things that would increase our common stock's
price, or force us to do things that could lower our common stock's price.
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Our Preferred Stock may effect the rights of the holders of our common stock and
it may also discourage another person to acquire control of Mace
Our Certificate of Incorporation authorizes the issuance of up to
50,000,000 shares of Preferred Stock. No shares of Preferred Stock are
currently outstanding. It is not possible to state the precise effect of
Preferred Stock upon the rights of the holders of our common stock until the
Board of Directors determines the respective preferences, limitations and
relative rights of the holders of one or more series or classes of the Preferred
Stock. However, such effect might include: (i) reduction of the amount
otherwise available for payment of dividends on Common Stock, to the extent
dividends are payable on any issued shares of Preferred Stock, and restrictions
on dividends on Common Stock if dividends on the Preferred Stock are in arrears,
(ii) dilution of the voting power of the Common Stock to the extent that the
Preferred Stock has voting rights, and (iii) the holders of Common Stock not
being entitled to share in the Company's assets upon liquidation until
satisfaction of any liquidation preference granted to the Preferred Stock.
The Preferred Stock may be viewed as having the effect of discouraging an
unsolicited attempt by another person to acquire control of Mace and may
therefore have an anti-takeover effect. Issuances of authorized preferred
shares can be implemented, and have been implemented by some companies in recent
years with voting or conversion privileges intended to make an acquisition of
the company more difficult or costly. Such an issuance could discourage or
limit the stockholders' participation in certain types of transactions that
might be proposed (such as a tender offer), whether or not such transactions
were favored by the majority of the stockholders, and could enhance the ability
of officers and directors to retain their positions.
Some provisions of Delaware law may prevent us from being acquired
We are governed by Section 203 of the Delaware General Corporation Law,
which prohibits a publicly held Delaware corporation from engaging in a
"business combination" with a person who is an "interested stockholder" for a
period of three (3) years, unless approved in a prescribed manner. This
provision of Delaware law may affect our ability to merge with, or to engage in
other similar activities with, some other companies. This means that we may be
a less attractive target to a potential acquirer who otherwise may be willing to
pay a price for our common stock above its market price.
We face Year 2000 risks
The Company has completed its Year 2000 remediation plan. Although we
believe our Year 2000 remediation plan was adequate to address the Year 2000
issue and we expect to have no material exposure with respect to information
technology-related systems, the Company is continually acquiring new businesses
and locations, which may require an on-going process to convert, assess and, if
necessary, remediate newly acquired systems. With respect to non-information
technology areas, it is uncertain what risks are associated with the Year 2000
issue and any risks that may be identified could have a material adverse effect
on the Company's business, financial condition, and results of operations and
cash flows. There can be no assurances that the systems of customers and
vendors on which the Company relies will be converted in a timely manner and
will not have an adverse effect on the Company's systems or operations.
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Additionally, the Company's Computer Products and Services operations
develop specialty point of sale and control software for principally the car
care industry. Based on our current assessment, we believe the current versions
of our software products are Year 2000 compliant - that is, they are capable of
adequately distinguishing 21/st/ century dates from 20/th/ century dates.
However, our products are generally integrated into other third party company
systems involving hardware and software products that we cannot adequately
evaluate for Year 2000 compliance. Although we have not been a party to any
claims involving our products or services related to Year 2000 compliance
issues, we may in the future be required to defend our products or services in
such claims proceedings, or to negotiate resolutions of claims based on Year
2000 issues.
We do not expect to pay cash dividends on our common stock
We do not expect to pay any cash dividends on our common stock in the
foreseeable future. We will reinvest any cash otherwise available for dividends
in our business.
THE COMPANY
We were incorporated in Delaware on September 1, 1993, and before July,
1999, our main business was the production and sale of less-than-lethal defense
sprays and other consumer safety and security products. On July 1, 1999, we
merged American Wash Services Inc., a company that was engaged in the business
of acquiring and operating car wash facilities, into a wholly-owned subsidiary
of Mace. On July 9, 1999, we acquired all of the outstanding common stock of
Innovative Control Systems, Inc., a developer of point of sale systems for the
car wash and oil lubrication industries.
Since July 1999, our main business has been the ownership and operation of
full service car wash facilities. Through a separate division, we continue to
produce and sell, both in our car wash facilities and elsewhere, our consumer
safety and personal security products. Through our wholly-owned subsidiary,
Innovative Control Systems, Inc., we continue to develop and sell car wash and
oil lubrication point of sale systems.
CAUTIONARY STATEMENT
In this prospectus and in reports we incorporate in this prospectus, we use
forward-looking terminology such as "may," "will," "should," "expect,"
"anticipate," "estimate," "plan," or "continue," or the negative of the terms or
other variations on the terms, or comparable terminology, which are referred to
under the securities laws as "forward-looking statements."
Our forward-looking statements are affected by known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements to differ materially from the results, performance and
achievements that our forward-looking statements express or imply. We discuss
some, but not all, of these risks, uncertainties and factors in this prospectus.
We disclaim any obligation to update this discussion or to announce publicly the
result of any revisions to any of the forward-looking statements contained in
this prospectus, however, to reflect future events or developments.
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DIVIDEND POLICY
We do not anticipate paying any cash dividends in the foreseeable future
and we intend to retain all working capital and earnings, if any, for use in our
operations and business expansion. Our Board of Directors will make any future
determination regarding dividend payments, and their decision will depend on,
among other things, our results of operations, financial condition and capital
requirements, the term of any then existing indebtedness, general business
conditions and other factors that the Board of Directors deems relevant.
USE OF PROCEEDS
We will not receive any of the proceeds from the shares sold by the
Registered Stockholders nor will any of the proceeds be available for our use or
otherwise for our benefit.
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REGISTERED STOCKHOLDERS
This prospectus relates to 348,700 shares of our currently outstanding
common stock, up to 370,037 shares of our common stock issuable upon conversion
of a convertible debenture in the principal amount of $1,339,532.22, and 120,000
shares of our common stock issuable upon exercise of common stock purchase
warrants. The shares have been registered with the SEC for offer and sale, from
time to time, by or for the account of the stockholders named below (the
"Registered Stockholders").
The following table lists the names of the Registered Stockholders, and for
each, the number of shares beneficially owned before registration, the number of
shares that have been registered and the number of shares and percentage
interest of Mace to be beneficially owned if all of the registered shares are
sold pursuant to this prospectus.
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Number of
Shares Number of Shares Beneficially Owned
Beneficially Outstanding Number of if all
Owned Before Shares Warrant Shares Registered Shares
Registered Stockholders Registration Registered Registered Are Sold
----------------------- ------------ ---------- ---------- --------
Number Percent(1)
------ ----------
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Rajiv Vohra 289,179 289,179 -- -- --
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Bullseye Properties, Inc. 370,037(2) 370,037 -- -- --
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Kenneth H. Bachman Trustee for 73,881(3) 4,881 69,000 -- --
Kenneth H. Bachman Revocable Trust
U/A dated 9/12/94
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Claudia Bachman Trustee for Claudia 45,880(4) 4,880 41,000 -- --
Bachman Revocable Trust U/A dated
9/12/94
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Carolyn Bachman Schmidt 2,000(5) -- 2,000 -- --
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Dan and Diane Warmbier 8,000(6) -- 8,000 -- --
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Stephen Prior 40,000 40,000 -- -- --
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Michael Fazio 2,440 2,440 -- -- --
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M. Beckmann Ltd. 2,440 2,440 -- -- --
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Louis D. Paolino, Jr. 7,448,602(7) 2,440 -- 7,446,162 31.0
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Robert M. Kramer 377,440(8) 2,440 -- 375,000 1.6
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(1) Percentage calculation is based on 23,984,318 shares of Mace common stock
outstanding on March 31, 2000.
(2) Consists of convertible debenture in the principal amount of $1,339,532.22
convertible at a price of $3.62 until August 1, 2000 and thereafter at a
price of $3.875. The converted common stock is subject to a sale
limitation of 30,000 shares per week.
(3) Includes warrants to purchase 69,000 shares.
(4) Includes warrants to purchase 41,000 shares.
(5) Consists of a warrant to purchase 2,000 shares.
(6) Consists of a warrant to purchase 8,000 shares.
(7) Mr. Paolino is the Chairman, President and Chief Executive Officer and a
Director of Mace.
(8) Mr. Kramer is the Secretary, an Executive Vice President and a Director of
Mace.
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PLAN OF DISTRIBUTION
This prospectus relates to sales from time to time of up to 838,737 shares
of common stock by the Registered Stockholders and their pledgees, donees,
transferees, partners or others who acquire the shares from the Registered
Stockholders (collectively, the "Transferees"). We will not receive any of the
proceeds from any Registered Stockholder's or Transferee's sale of their shares.
The Registered Stockholders or their Transferees may sell the shares from time
to time in one or more underwritten transactions at a fixed price or prices,
which may be changed, or at market prices prevailing at the time of sale, at
prices related to the prevailing market prices or at negotiated prices. Any
underwritten offering may be on a "best efforts" or a "firm commitment" basis.
In connection with any underwritten offering, underwriters or agents may receive
compensation in the form of discounts, concessions or commissions from the
Registered Stockholders, the Transferees or from purchasers of shares for whom
they may act as agents. Underwriters may sell shares to or through dealers, and
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents.
Under agreements that we may enter, we may be required to indemnify
underwriters, dealers and agents who participate in the distribution of shares
against some liabilities, including liabilities under the Securities Act, and we
may be required to contribute to payments that the underwriters, dealers or
agents may be required to make in distributing the shares.
The Registered Stockholders or their Transferees and any underwriters,
dealers or agents that participate in the distribution of shares may be deemed
to be "underwriters" within the meaning of the Securities Act, and any profit
they make on the sale of shares and any discounts, commissions or concessions
they receive might be deemed to be underwriting discounts and commissions under
the Securities Act. Because the Registered Stockholders or their Transferees
may be deemed "underwriters," they are subject to the Securities Act's
prospectus delivery requirements, which may include delivery through the
facilities of The Nasdaq National Market. We have advised the Registered
Stockholders that Regulation M, a part of the Securities Act, imposes anti-
manipulative provisions that may apply to the Registered Stockholders' sales.
When a particular offer of shares is made, we will distribute a prospectus
supplement, if required, that will show the names of any underwriters, dealers
or agents used by the Registered Stockholders or Transferees, any discounts,
commissions and other terms paid by the Registered Stockholders or Transferees
and any other required information. In addition, when a Registered Stockholder
informs us that one of its Transferees intends to sell more than 500 shares, we
will file and distribute a prospectus supplement.
The Registered Stockholders and their Transferees may also sell their
shares, from time to time, directly to purchasers or to or through broker-
dealers. Sales may be made on The Nasdaq National Market or other exchanges on
which the shares are then traded, in the over-the-counter market, in negotiated
transactions, through put or call options relating to the shares, through short
sales of shares or otherwise at prices and at terms then prevailing, at prices
related to the then-current market prices or at prices otherwise negotiated. In
connection with any sale, any broker-dealer may act as the Registered
Stockholder's or Transferee's agent or may purchase from the Registered
Stockholders or Transferees all or a portion of the shares as principal, and any
sale may be made under any of the methods described below.
(a) block transactions, which may involve crosses, in which a broker-
dealer may sell all or a portion of the shares as agent, but may position and
resell all or a portion of the block as principal to facilitate the transaction;
(b) purchases by any broker-dealer as principal and resale by the broker-
dealer for its own account;
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(c) a special offering, an exchange distribution or a secondary
distribution under applicable Nasdaq National Market or other stock exchange
rules;
(d) ordinary brokerage transactions and transactions in which the broker-
dealer solicits purchasers;
(e) through put or call option transactions relating to the shares;
(f) sales "at the market" to or through a market maker or into an existing
trading market for the shares, on an exchange or otherwise; and
(g) sales in other ways not involving market makers or established trading
markets, including direct sales to purchasers.
In effecting sales, broker-dealers engaged by the Registered Stockholders
and/or their Transferees may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or other compensation from the
Registered Stockholders and/or their Transferees in amounts to be negotiated
immediately before the sale that will not exceed those customary in the types of
transactions involved. Broker-dealers may also receive compensation from
purchasers of the shares, but we do not expect the compensation to exceed
customary compensation in the types of transactions involved. The Registered
Stockholders or their Transferees may also sell the shares under the Securities
Act's Rule 144, if they meet the Rule's requirements.
We will pay all expenses related to the offering and sale of the shares,
other than commissions, discounts and fees of underwriters, broker-dealers or
agents. We have agreed to indemnify the Registered Stockholders against some
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
LEGAL OPINION
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, will issue for us
an opinion on the validity of the shares being offered by this prospectus.
EXPERTS
The consolidated financial statements of Mace Security International, Inc.
as of December 31, 1999, and for the year then ended appearing in Mace's annual
report on Form 10-KSB, which is incorporated by reference herein, have been
audited by Grant Thornton LLP, independent auditors, as set forth in their
report thereon included therein and incorporated by reference herein. Such
financial statements are incorporated by reference herein in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements (restated) of Mace Security
International, Inc. as of December 31, 1998, and for the year then ended
appearing in Mace's annual report on Form 10-KSB, which is incorporated by
reference herein, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated by
reference herein which, as for the year in the period ended December 31, 1998,
is based in part on the reports of D. Williams & Co., P.C., Daniel P. Irwin and
Associates, P.C. and Urbach Kahn & Werlin PC, independent auditors. The
financial statements referred to above are incorporated by reference in reliance
upon such reports given on the authority of such firms as experts in accounting
and auditing.
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<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The Securities Exchange Act of 1934 requires us to file reports, proxy
statements and other information with the Securities and Exchange Commission.
Our reports, proxy statements and other information may be copied and inspected
at the Securities and Exchange Commission's Public Reference Facilities, which
are in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and the
Securities and Exchange Commission's following regional offices: 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of the material can be
obtained from the Securities and Exchange Commission's Public Reference Section,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates, by calling
1-800-SEC-0300. The Securities and Exchange Commission also maintains an
Internet web site at http://www.sec.gov that contains reports, proxy statements
and other information.
We filed with the Securities and Exchange Commission a registration
statement on Form S-3 under the Securities Act which registered the shares
covered by this prospectus for resale by the Registered Stockholders. This
prospectus is a part of the registration statement. This prospectus does not
contain all of the information shown in the registration statement because we
have omitted some portions of the prospectus as permitted by the Securities and
Exchange Commission's rules and regulations. Statements contained in this
prospectus as to any contract or other documents' contents are not necessarily
complete. In each instance, if the contract or document is filed as an exhibit
to the registration statement, the affected statement is qualified, in all
respects, by reference to the applicable exhibit to the registration statement.
For further information about us and our shares, we refer you to the
registration statement and the exhibits and schedules that you may obtain from
the Securities and Exchange Commission at its principal office in Washington,
D.C. after you pay the Securities and Exchange Commission's prescribed fees.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to these documents. The
information we have incorporated by reference is an important part of this
prospectus, and information that we file later with the Securities and Exchange
Commission will update and supersede automatically this information. We
incorporate by reference the following documents, which we have filed already
with the Securities and Exchange Commission, and any future filings we make with
the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act until the Registered Stockholders sell all of the shares:
1. Our Annual Report on Form 10-KSB for the year ended December 31, 1999.
2. Our following Current Reports on Form 8-K:
(a) Form 8-K dated December 29, 1999, as amended on March 9,
2000; and
(b) Form 8-K dated January 10, 2000, as amended on February 11,
2000.
3. The description of Mace's common stock contained in the Registration
Statement on Form 8-A (File No. 0-22810) filed by Mace to register such
securities under the Securities Exchange Act of 1934, including all amendments
and reports filed to update such description.
You should rely only on the information we include or incorporate by
reference in this prospectus and any applicable prospectus supplement. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. The information contained in this prospectus or
the applicable prospectus supplement is accurate only as of the date on the
front of those documents, regardless
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<PAGE>
of the time of delivery of this prospectus or the applicable prospectus
supplement or of any sale of our securities.
Any statement contained in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus is deemed to be
modified or superseded for purposes of this prospectus to the extent that any of
the following modifies or supersedes a statement in this prospectus or
incorporated by reference in this prospectus:
. in the case of a statement in a previously filed document incorporated
or deemed to be incorporated by reference in this prospectus, a statement
contained in this prospectus;
. a statement contained in any accompanying prospectus supplement
relating to a specific offering of shares; or
. a statement contained in any other subsequently filed document that is
also incorporated or deemed to be incorporated by reference in this
prospectus.
Any modified or superseded statement will not be deemed to constitute a
part of this prospectus or any accompanying prospectus supplement, except as
modified or superseded. Except as provided by the above mentioned exceptions,
all information appearing in this prospectus and each accompanying prospectus
supplement is qualified in its entirety by the information appearing in the
documents incorporated by reference.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, after their written or oral request, a copy of any or
all of the documents incorporated in this prospectus by reference, other than
exhibits to the documents, unless the exhibits are incorporated specifically by
reference in the documents. Written requests for copies should be addressed to
Louis D. Paolino, Jr., Chief Executive Officer, Mace Security International,
Inc., 1000 Crawford Place, Suite 400, Mt. Laurel, New Jersey 08054.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses payable by us in
connection with this registration statement:
Securities and Exchange Commission Registration Fee.. $ 1,045
Accounting Fees and Expenses......................... $ 5,000
Legal Fees and Expenses.............................. $15,000
Miscellaneous Expenses............................... $ 5,000
-------
Total................................................ $26,045
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We are organized under the laws of the State of Delaware. Section 145 of
the Delaware General Corporation Law permits a Delaware corporation to indemnify
any person who is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative, other than an action by or in the
right of the corporation, by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise. A corporation may similarly indemnify the
person in the case of actions or suits brought by or in the right of the
corporation, except, unless otherwise ordered by the court, that no
indemnification will be made in respect of any claim, issue or matter as to
which the person will have been adjudged to be liable to the corporation.
A corporation may indemnify the person against expenses including
attorneys' fees, and judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with the action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. Any indemnification will be made by the corporation only
as authorized in the specific case upon a determination that indemnification is
proper in the circumstances because the person has met the aforesaid standard of
conduct. The determination will be made:
(1) by a majority vote of the directors who were not parties to the
action, suit, or proceeding, whether or not a quorum;
(2) if no directors were parties, or if the directors so direct, by
independent legal counsel in a written opinion; or
(3) by the stockholders.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits, or otherwise, in defense of any claim, issue
or matter therein, the person will be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred in connection with the
defense. The statute also provides that it is not exclusive of any other rights
to which those seeking indemnification may be entitled under any bylaws,
agreement, vote of stockholders or disinterested
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<PAGE>
directors, or otherwise. Our By-Laws provide for the indemnification of our
directors and officers to the fullest extent permitted by law and requires
advancement of expenses.
Section 102(b)(7) of the Delaware General Corporation Law allows a Delaware
corporation to limit or eliminate the personal liability of directors to the
corporation and its stockholders for monetary damages for breach of fiduciary
duty as a director. However, this provision excludes any limitation on
liability:
(1) for any breach of the director's duty of loyalty to the corporation or
its stockholders;
(2) for acts or omissions not in good faith or which involved intentional
misconduct or a knowing violation of law;
(3) for intentional or negligent payment of unlawful dividends or stock
purchases or redemptions; or
(4) for any transaction from which the director derived an improper
benefit.
Moreover, while this provision provides directors with protection against
awards for monetary damages for breach of their duty of care, it does not
eliminate the duty. Accordingly, this provision will have no effect on the
availability of equitable remedies such as an injunction or rescission based on
a director's breach of his or her duty of care. Finally, this provision applies
to an officer of a corporation only if he or she is a director of the
corporation and is acting in his or her capacity as director, and does not apply
to officers of the corporation who are not directors.
Our Certificate of Incorporation does not provide for the limitation on
liability permitted by Section 102(b)(7). We maintain directors and officers'
liability insurance.
To the extent indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling us under the
above mentioned provisions, we have been informed that in the Securities and
Exchange Commission's opinion the indemnification is against public policy as
expressed in that Act and is therefore unenforceable.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this registration statement:
Exhibit Number Document
- -------------- --------
5 Opinion of Drinker Biddle & Reath LLP
23.1 Consent of Grant Thornton LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Urbach Kahn & Werlin PC
23.4 Consent of D. Williams & Co., P.C.
23.5 Consent of Daniel P. Irwin and Associates, P.C.
23.6 Consent of Drinker Biddle & Reath LLP (included in Exhibit
5)
24 Power of Attorney (included in signature page)
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<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any additional or changed material information
on the plan of distribution;
provided, however that the undertakings set forth in paragraphs
-------- -------
(1)(i) and (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) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) 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 permitted under
Item 15 above 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 against the Registrant by such director, officer
or controlling person in connection with the securities being registered hereby,
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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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Form S-3
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Mt. Laurel, New Jersey on April 5, 2000.
MACE SECURITY INTERNATIONAL, INC.
By: /s/ Louis D. Paolino, Jr.
-------------------------
Louis D. Paolino, Jr.
Chairman of the Board, Chief
Executive Officer and President
Date: April 5, 2000
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears
below hereby constitutes and appoints Gregory M. Krzemien his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary in connection with such matters and hereby ratifying and
confirming all that such attorney-in-fact and agent or his substitutes may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Louis D. Paolino, Jr. April 5, 2000
- ------------------------------
Louis D. Paolino, Jr. Chief Executive Officer,
Chairman of the Board and
President
/s/ Gregory M. Krzemien April 5, 2000
- ------------------------------
Gregory M. Krzemien Chief Financial Officer
and Treasurer
/s/ Ronald R. Pirollo April 5, 2000
- ------------------------------
Ronald R. Pirollo Chief Accounting Officer
And Controller
/s/ Jon E. Goodrich April 5, 2000
- ------------------------------
Jon E. Goodrich Director
/s/ Robert M. Kramer April 5, 2000
- ------------------------------
Robert M. Kramer Director
/s/ Matthew J. Paolino April 5, 2000
- ------------------------------
Matthew J. Paolino Director
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<PAGE>
/s/ Constantine N. Papadakis April 5, 2000
- ------------------------------
Constantine N. Papadakis Director
/s/ Richard B. Muir April 5, 2000
- ------------------------------
Richard B. Muir Director
/s/ Mark S. Alsentzer April 5, 2000
- ------------------------------
Mark S. Alsentzer Director
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<PAGE>
EXHIBIT INDEX
Exhibit Number Document
- -------------- --------
5 Opinion of Drinker Biddle & Reath LLP*
23.1 Consent of Grant Thornton LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Urbach Kahn & Werlin PC
23.4 Consent of D. Williams & Co., P.C.
23.5 Consent of Daniel P. Irwin and Associates, P.C.
23.6 Consent of Drinker Biddle & Reath LLP
(included in Exhibit 5)
24 Power of Attorney (included in signature page)
* To be filed by amendment
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<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We have issued our report dated March 17, 2000, accompanying the consolidated
financial statements of Mace Security International, Inc. and subsidiaries
included in the 1999 Annual Report on Form 10-KSB for the year ended December
31, 1999 which is incorporated by reference in this Registration Statement. We
consent to the incorporation by reference in the Registration Statement of the
aforementioned report and to the use of our name as it appears under the caption
"Experts."
/s/ GRANT THORNTON LLP
Philadelphia, Pennsylvania
April 3, 2000
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-_____) and related Prospectus of Mace
Security International, Inc. for the registration of up to 838,737 shares of its
common stock and to the incorporation by reference therein of our report dated
December 16, 1999 with respect to the consolidated financial statements of Mace
Security International, Inc. as of December 31, 1998 and for the year then ended
included in Mace Security International, Inc.'s Form 10-KSB for the year ended
December 31, 1999, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Philadelphia, Pennsylvania
April 4, 2000
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Mace Security International, Inc. on Form S-3 to be filed on or about April 5,
2000 of our report dated April 2, 1999 on the consolidated financial statement
(before restatement) of Mace Security International, Inc. (the "Company"),
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999, and to all references to our firm included in this
registration statement.
/s/ URBACH KAHN & WERLIN PC
Albany, New York
April 4, 2000
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement of
Mace Security International, Inc. on Form S-3 to be filed on or about April 5,
2000 and to the use of our name as it appears under the caption "Experts" of our
report dated September 14, 1999, with respect to the combined financial
statements of 50's Classic Car Wash of Lubbock, Inc. and CRCD, Inc. included in
Mace Security International, Inc.'s Annual Report on Form 10-KSB for the year
ended December 31, 1999 filed with the Securities and Exchange Commission.
/s/ D. WILLIAMS & CO., P.C.
Lubbock, TX
April 5, 2000
<PAGE>
Exhibit 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Mace Security International, Inc. on Form S-3 to be filed on or about April 5,
2000 and to the use of our name as it appears under the caption "Experts" of our
report dated September 18, 1999, with respect to the financial statements of
Innovative Control Systems, Inc. included in Mace Security International, Inc.'s
Annual Report on Form 10-KSB for the year ended December 31, 1999, and our
report dated February 10, 2000, with respect to the financial statements of
Cherry Hill Car Wash, Inc. and 1505 Associates included in Mace Security
International, Inc.'s Current Report on Form 8-K dated December 29, 1999 (as
amended March 9, 2000 on Form 8-K/A), both filed with the Securities and
Exchange Commission.
/s/ DANIEL P. IRWIN AND ASSOCIATES P.C.
Strafford-Wayne, Pennsylvania
April 5, 2000
