AS FILED WITH SECURITIES EXCHANGE COMMISSION ON May 30 _, 2000.
REGISTRATION NO. 333-______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
Amendment Number One
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SOCRATES TECHNOLOGIES CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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Delaware 54-1707718
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8500 Leesburg Pike, Suite 406
Vienna, Virginia 22183
(703) 288-6500
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(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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Paul W. Richter, General Counsel and Secretary
Socrates Technologies Corporation
8500 Leesburg Pike, Suite 406
Vienna, Virginia 22183
(703) 288-6500
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(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time-to-time, pursuant to Rule 415, after the Registration Statement becomes
effective.
If the only securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with a dividend or
interest reinvestment plan, please check this box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ] __________ .
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] __________ .
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ] __________ .
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Net
Net Offering
Aggregate Offering Proceeds
Title of Number of Price per Offering Proceeds to Selling Registration
Securities Shares Share Proceeds To Company Shareholder Fee
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.01 par value 2,877,335 $2.75 N/A N/A $7,912,671 $2,618.00
------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457 under the Securities Act of 1933. The maximum aggregate
offering price was computed by multiplying 2,877,335 shares by the last closing
bid price of the Common Shares on April 3, 2000, as reported on NASDAQ.
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 REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED May 30, 2000
PRELIMINARY PROSPECTUS
2,877,335 Shares
of
Socrates Technologies Corporation
Common Stock, $0.01 par value,
consisting of 2,304,000 Shares offered by
Selling Shareholders
-------------------------
This Prospectus is part of a Registration Statement that we have filed with the
SEC using a "shelf" registration process. This means:
- The selling shareholders may offer and sell the 2,877,335 Shares
covered by this Prospectus from time to time.
- We will provide a Prospectus Supplement each time we issue or sell
any of the Treasury Stock and each time the selling shareholder
sells the common shares covered by this Prospectus; and
- The Prospectus Supplement will provide specific information about
the terms of the offering and also may add, update, or change
information contained in this Prospectus.
Socrates Technologies Corporation's common shares trade on the NASDAQ National
Market System under the symbol "SOCT."
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
-------------------------
NEITHER THE SEC 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.
May 30, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
----
WHERE YOU CAN FIND MORE INFORMATION........................................ 4
THE COMPANY................................................................ 4
THE SELLING SHAREHOLDERS................................................... 5
FORWARD-LOOKING STATEMENT.................................................. 6
RISK FACTORS............................................................... 6
USE OF PROCEEDS............................................................ 8
PRICE RANGE OF COMMON SHARES............................................... 9
FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF ....................... 9
December 31, 1999........................................................ 9
PLAN OF DISTRIBUTION....................................................... 9
DESCRIPTION OF COMMON SHARES............................................... 9
LEGAL MATTERS.............................................................. 9
EXPERTS.................................................................... 9
TRANSFER AGENT................................... ......................... 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 10
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We have not taken any action to permit a public offering of the common
shares covered hereby outside of the United States or to permit the possession
or distribution of this Prospectus outside of the United States. Persons outside
of the United States who come into possession of this Prospectus must inform
themselves about and observe any restrictions relating to the offering of the
common shares and the distribution of this Prospectus outside of the United
States.
In this Prospectus, "Socrates," "Company," "we," "us," and "our" refer
to Socrates Technologies Corporation.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED
ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN
OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN ON THE FRONT OF THESE
DOCUMENTS.
3
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC on Form S-3 Registration Statement
registering the common shares offered hereby. This Prospectus, which constitutes
a part of the Registration Statement, does not contain all of the information in
the Registration Statement or the exhibits that are part of the Registration
Statement. For further information with respect to Socrates and the common
shares, please see the Registration Statement and the exhibits that are part of
the Registration Statement.
You may read and copy any document we file at the SEC's public
reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information about the public
reference rooms. Our SEC filings are also available to the public from the SEC's
Website at http://www.sec.gov.
We are subject to the information and periodic reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As
required by the Exchange Act, we file periodic reports, proxy statements, and
other information with the SEC. These periodic reports, proxy statements, and
other information will be available for inspection and copying at the SEC's
public reference rooms and the Website of the SEC referred to above.
THE COMPANY
We are a Delaware holding company with two primary businesses: (1)
providing information technology products and services, including network
engineering and computer system integration services and products, to commercial
and government customers in the Mid-Atlantic area (hereinafter referred to as
the "IT Services Business"); and custom software development and maintenance
services, especially in basic business and management and information systems,
to commercial customers in the United States (referred to as the "Systems
Development Business"). The IT Services Business is conducted primarily through
Socrates' Networkland Inc. subsidiary. The Systems Development Business is
conducted primarily through our Technet Computer Services, Inc. subsidiary.
Prior to 1999, Socrates Technologies, Inc., a Maryland corporation and
a wholly-owned subsidiary of Socrates, was the primary business of Socrates and
was engaged in the resell of third-party and proprietary computer hardware and
software products. Due to decreasing profit margins in the computer reselling
business and resulting financial losses sustained by the Company in that
business, Socrates refocused the primary business lines to the IT Services
Business and Systems Development Business in 1999 and phased out in 1999 the
computer reseller business conducted by Socrates Technologies, Inc. Socrates
Technologies, Inc. continues to offer a limited number of courses designed to
train individuals to become certified engineers in computer systems and network
engineering, website development and website communication technologies through
its Socrates Technologies, Inc. subsidiary. Socrates Technologies, Inc. also
offers training in basic computer skills to job training candidates sponsored by
local county governments. The sales and service staff of Socrates Technologies,
Inc. were transferred to Networkland Inc. or laid off in the fall of 1999.
Socrates first offered its common shares to the public in August 1995. Our
registered offices are located at 8500 Leesburg Pike, Suite 406, Vienna,
Virginia 22183, and our telephone number is (703) 288-6500.
4
<PAGE>
Socrates has experienced a considerable change in business focus and
revenues during 1999. Under a new management team, that was installed in
September and October 1999, Socrates is focused on software development and
automated service provider services or "ASP" over the Internet and other
networks and has discontinued most of its computer hardware reseller business.
THE SELLING SHAREHOLDERS
The following persons are the selling shareholders whose shares are
offered under this prospectus:
Name of Selling Number of Shares Number of Shares
Shareholders Beneficially Owned Being Registered
-------------- ------------------ ----------------
Farshad Sajedi 2,000,000 2,000,000
Ganapathy Govind 220,000 220,000
Edward Paul Roberts 415,000 300,000
Gary Freeman 133,334 133,334
Brian Marshall 101,667 101,667
Edward Ratkovich 1,932,467 66,667
Warren Fine 25,000 25,000
Gilbert McCord 26,667 26,667
Susan Cunningham 2,500 2,500
Dwayne Chandler 1,500 1,500
Total: 4,858,135 2,877,335
Two million of the common shares covered by this Prospectus are shares
owned by Mr. Farshad Sajedi, a director of Socrates and the Chief Executive
Officer, President and a director of Networkland Inc., a wholly-owned subsidiary
of the Company. The Selling Shareholder acquired 2,000,000 shares of Socrates
Common Stock, $0.01 par value, on August 17, 1999 in exchange for all of his
shares of common stock, no par value, of Networkland Inc. The Plan and Agreement
of Reorganization among Socrates, Networkland Inc., Socrates Merger Corporation
and Mr. Sajedi, dated August 17, 1999, requires the Company to register his
Socrates Common Shares.
Mr. Sajedi has advised the Company that he may sell some of the Common
Shares from time to time during 2000. Mr. Sajedi has not decided at this time
how many shares he may sell in 2000. Once the Common Shares are registered, the
Company does not believe that there are any restrictions on the right of Mr.
Sajedi to sell his Common Shares once they are registered.
Edward Paul Roberts received his 300,000 shares pursuant to a December
1999 agreement with the Registrant whereby Mr. Roberts transfer of 300,000 of
his unrestricted shares to Pinnacle System and Development (PSD), a New York
firm, as consideration for certain investment banking and placement agent
services for the Registrant in year 2000. Mr. Roberts also purchased 115,000
shares under the Registrant's December 1999 private placement of shares to fewer
than 10 "accredited investors" (as defined in Rule 501 under Regulation D,
promulgated under the Securities Act of 1933, as amended).
Susan Cunningham received 2,500 shares as par of her compensation
package when employed by JMR Distributors, Inc., a subsidiary of the Registrant.
The Registrant agreed to register Mr. Chandler's shares of Stock in year 2000 at
the time of issuance.
The other shareholders named above acquired the shares to be registered
under this Registration Statement in the December 1999 private placement of
shares by the Registrant. Under the terms of the private placement, the
Registrant agreed to register the shares purchased under the December 1999
private placement in year 2000.
5
<PAGE>
FORWARD-LOOKING STATEMENT
An investment in our common shares involves a high degree of risk. In
addition to the other information contained in this Prospectus, you should
carefully consider the risk factors identified below before investing in our
common shares. All statements, trend analyses, and other information contained
in this Prospectus regarding the markets for our container leasing services and
net revenue, profitability, and anticipated expense levels, and any statements
containing the words "anticipate," "believe," "plan," "estimate," "expect,"
"intend," or other similar expressions constitute forward-looking statements.
These forward-looking statements are subject to business and economic risks. Our
actual results of operations may differ materially from those contained in the
forward-looking statements. The cautionary statements made in this Prospectus
apply to all forward-looking statements wherever they appear in this Prospectus.
RISK FACTORS
You should carefully consider the following risk factors and all other
information contained in this Prospectus before investing in our common shares.
Investing in our common shares involves a high degree of risk. Any of the
following factors could harm our business and could result in a partial or
complete loss of your investment.
OUR BUSINESS IS HIGHLY COMPETITIVE
Socrates is engaged in businesses where there are numerous competitors
that possess substantially greater resources and market share than Socrates. As
such, Socrates is unable to effectively compete for certain projects or for
projects requiring resources that exceed Socrates' current capabilities,
especially in the IT Services Business.
Further, Socrates ability to attract and retain key personnel may be
adversely impacted upon by the fact that Socrates does not possess the resources
of many of its competitors to attract and compensate, especially in terms of
incentive compensation, key personnel.
6
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OUR BUSINESS HAS EXPERIENCED SUCCESSIVE FISCAL QUARTERS OF SIGNIFICANT FINANCIAL
LOSSES
While Socrates believes that revenues from existing business and its
existing capital resources and lines of credit are sufficient to sustain
operations, the discontinuance of certain operations in 1998 and 1999 and losses
from discontinued and ongoing businesses have adversely impacted during the past
two fiscal quarters on the ability of Socrates to fund the growth of its primary
business lines. Socrates believes that its current primary business lines are
profitable and that Socrates will be able to obtain before January 2000 adequate
lines of credit and new investment capital to fund the operations and future
growth of Socrates' primary business lines.
Socrates has suffered successive fiscal quarters of substantial
financial losses since 1997. These financial losses have resulted from
discontinuance of certain subsidiaries' businesses and losses from ongoing and
discontinued business operations.
DEPENDENCE ON FINANCING
We are heavily dependent upon third parties to supply us with the
capital needed to acquire products in the IT Services Business. Our operations
require significant capital to purchase computer and information technology
products for customers in the IT Services Businesss. We have historically
financed product purchases through vendor financing, factoring or floor
financing lines and internal cash reserves or loans from insiders. Socrates
currently does not have a non-vendor credit line for the purchase of products.
Socrates believes that it will obtain non-vendor financing before January 2000
and that such line of credit will be sufficient to meet the foreseeable
financing needs of the IT Services Business.
Socrates entered into an agreement on March 20, 2000 to issue 4%
Convertible Debentures due March 20, 2005 to certain foreign investors. The
agreement imposes certain restrictions on the ability of Socrates to dilute
current shareholders through the issuance of additional shares of capital stock
and on consummating mergers and acquisitions with third parties without the
consent of the Debenture holders. Further, the conversion of the Debentures,
which may occur as early as June 2000, will cause substantial dilution to
existing shareholders. Socrates expects to raise approximately $4 million
through the private placement of the Debentures, which money will be used for
working capital, retirement of certain debts of the Company and its subsidiaries
and acquisition costs.
The restrictive terms of the Debenture private placement may hinder the
ability of Socrates to raise additional money or consummate future acquisitions.
Socrates believes that the $4 million financing was essential to implementation
of Socrates' new business plan and to improving Socrates' financial condition.
THE PRICE OF OUR COMMON STOCK IS HIGHLY VOLATILE
The price of our common stock is highly volatile. During the period
from January 1, 1998 to March29, 2000 the closing price of our common stock has
ranged from a high of $9.06 to a low of $0.50. Following periods of volatility
in the market price of a Company's securities, securities class action
litigation has often been instituted against such a company. If similar
litigation were instituted against us, it could result in substantial costs and
a diversion of our management's attention and resources, which could have an
adverse effect on our business. The volatile fluctuations of the market price
are based on (1) the number of shares in the market at the time as well as the
number of shares we may be required to issue in the future, compared to the
market demand for our shares; (2) our performance and meeting expectations of
our performance, including the development and commercialization of our products
and proposed products; and (3) general economic and market conditions. As a
small technology company, any investment in our stock is highly risky and
subject to sudden changes in market price.
7
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WE ARE DEPENDENT UPON KEY MANAGEMENT
Most of our senior executives and other management-level employees have
been with us for less than three years. The loss of the services of one or more
of them could have a material adverse effect on our business. We believe that
our future success will depend on our ability to retain key members of our
management team and to attract capable management in the future. There can be no
assurance that we will be able to do so. We do not maintain "key man" life
insurance policies on any member of management.
Gana Govind, the chief executive officer of Technet Computer Services,
Inc., did not renew his employment agreement as the chief executive officer of
Technet Computer Services, Inc. when it expired on September 30, 1999. Badri
Devanathan, a senior executive with Technet Computer Services, Inc., has been
appointed President of Technet Computer Services, Inc., effective January 1,
2000. Mr. Govind continues to provide management and technical services to
Technet Computer Services, Inc. as a consultant.
HOLDING COMPANY STRUCTURE
We are a holding company. We derive all of our operating income and
cash flow from our subsidiaries. We rely upon distributions from our
subsidiaries and inter-company borrowings to generate the funds necessary to
meet our obligations. The ability of our subsidiaries to make payments to us is
subject, among other things, to applicable laws of their respective
jurisdictions of incorporation and such restrictions as may be contained in
credit agreements or other financing arrangements entered into by such
subsidiaries. Claims of creditors of our subsidiaries will generally have
priority as to the assets of such subsidiaries over our claims and those of our
shareholders.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common shares
that the Selling Shareholders will sell pursuant to this Prospectus.
Any proceeds received from the sale of the Treasury Shares will be used
to pay the operating expenses of the Company and its subsidiaries.
8
<PAGE>
PRICE RANGE OF COMMON SHARES
Our common shares are quoted on the Nasdaq National Market under the
symbol "SOCT." The following table sets forth, for the periods indicated, the
high and low closing prices per share of our common shares as reported on the
Nasdaq National Market.
HIGH LOW
---- ---
CALENDAR YEAR 1998
First Quarter............................................... $9.06 $5.00
Second Quarter.............................................. 8.25 4.25
Third Quarter............................................... 7.13 6.00
Fourth Quarter.............................................. 7.75 1.50
CALENDAR YEAR 1999
First Quarter............................................... 4.00 1.00
Second Quarter.............................................. 4.25 1.63
Third Quarter............................................... 2.96 1.00
Fourth Quarter.............................................. 2.19 0.50
On April 3, 2000, the last reported closing price of our common shares
on the Nasdaq National Market was $2.75 per share. As of April 3, 2000, there
were approximately 3,200 shareholders of record of our common shares.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF DECEMBER 31, 2000
For our financial condition and the results of our operations as of
December 31, 1999, we refer you to our Annual Report on Form 10-K for the period
ending December 31, 1999.
PLAN OF DISTRIBUTION
The Selling Shareholder, may be offered from time to time directly to
purchasers in negotiated transactions or otherwise, at prices determined at the
time of sale. The Selling Shareholder may effect such transactions by selling
Common Shares to or through dealers and such dealers may receive compensation in
the form of underwriting discounts, concessions or commissions from the Selling
Shareholders and any purchasers of common shares for whom they may act as
agents.
The place and time of delivery for the common shares in respect of
which this Prospectus is delivered will be set forth in the related Prospectus
Supplement.
DESCRIPTION OF COMMON SHARES
GOVERNING LAW
Socrates is a Delaware company and its affairs are governed by its
Articles of Incorporation (the "Articles"), Delaware General Corporation Law and
federal and state securities laws and regulations.
LEGAL MATTERS
The validity of the common shares offered hereby will be passed upon
for the Company by Paul W. Richter, General Counsel of Socrates.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference to the Annual Report on Form 10-K for the year end December 31,
1999, have been so incorporated in reliance on the report of Grant Thornton,
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
9
<PAGE>
TRANSFER AGENT
The transfer agent of the Company's Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005, (212)
936-5100.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates documents by reference which are not
presented in or delivered with it. This means that we can disclose certain
information by referring a reader to certain documents. These documents (other
than the exhibits to such documents unless specifically incorporated by
reference) are available, without charge, upon written or oral request directed
to Paul W. Richter, General Counsel and Secretary, Socrates Technologies
Corporation, 8500 Leesburg Pike, Suite 406, Vienna, Virginia 22183, and our
telephone number is (703) 288-6500.
The following documents, which have been filed by Socrates with the SEC
pursuant to the Exchange Act (file no. 0-26614) are incorporated in this
Prospectus by reference and shall be deemed to be a part hereof:
(a) Annual Report on Form 10-K for the year ended December 31,
1999;
(b) Quarterly Reports on Form 10-Q for the quarters ended March
31, 2000, September 30, 1999, and June 30, 1999;
(c) Current Reports on Form 8-K, dated March 15, 2000, and
Amendment Number One, dated May 25, 2000, and Amendment Two, dated May 26, 2000
thereto, and February 2, 2000, December 13, 1999, and October 12, 1999, and
(d) All documents filed by Socrates with the SEC Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made by this Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superceded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that also is or is to be deemed to
be incorporated by reference modifies or supercedes such statement. Any such
statement so modified or superceded shall not be deemed, except as so modified
or superceded, to constitute a part of this Prospectus.
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the expenses, other than underwriting discounts and
commissions, expected to be incurred by the Company in connection with the
issuance and distribution of the securities registered under this Registration
Statement. All amounts are estimated, with the exception of the SEC Registration
Fee and Delaware tax on the issuance of the common shares covered by this
Registration Statement:
SEC Registration Fee..............................................$ 2,618.00
NASD Filing Fee...................................................$17,000.00
Legal Fees and Expenses...........................................$ 2,500.00
Accounting Fees and Expenses......................................$ 1,500.00
Miscellaneous.....................................................$ 1,000.00
Total.............................................................$
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has obtained insurance for the benefit of the directors and
officers of the Company and its subsidiaries insuring such persons against
certain liabilities, including liabilities under Federal and state securities
law.
Article X of the Company's By-Laws, as amended, provides that the
Company shall indemnify each person who is or was a director or officer of the
Company, each person who is or was serving or has agreed to serve at the request
of the Company as a director or officer of, or in a similar capacity with,
another organization against all liabilities, costs and expenses reasonably
incurred by such persons in connection with the defense or disposition of or
otherwise in connection with or resulting from any action, suit or other
proceeding in which they may be involved by reason of being or having been such
a director or officer or by reason of any action taken or not taken in such
capacity, except with respect to any matter as to which such person shall have
been finally adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that his or her action was in the best
interests of the Company. Delaware General Corporation Law authorizes
corporations to indemnify their directors and officers unless such person shall
have been finally adjudicated in any proceeding to have not acted in good faith
and in the reasonable belief that such action was in the best interests of the
corporation.
ITEM 16. EXHIBITS.
24.1 By-Laws, as amended, dated February 7, 1998 (1)
24.2 Opinion of Paul Richter
24.3 Consent of Grant Thornton, LLP.
24.4 Power of Attorney (included as part of the signature page of
this Registration Statement).
- ------------------------------------------------------------------------------
(1) Incorporated by reference to Exhibit 3(b) to the Form 10-K for the year
ended December 31, 1999
- ------------------------------------------------------------------------------
II-1
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ITEM 17. UNDERTAKINGS.
A. Undertaking to Update.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement
to:
(i) include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information in the Registration Statement; and
(iii) include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
Provided, however, that paragraph (A)(1)(i) and (A)(1)(ii) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. Undertaking With Respect to Documents Incorporated by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE>
C. Undertaking With Respect to Indemnification.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
D. Undertaking With Respect to Pricing Information.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of any prospectus
filed as part of this Registration Statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Fairfax, Virginia on the 3rd day of April 2000.
SOCRATES TECHNOLOGIES CORPORATION
By: _____________________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul W. Richter and Steve Fogarty, and
each of them, any of whom may act without joinder of the others, his or her true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all pre- and post-effective amendments and
supplements to this Registration Statement, and to file the same, or cause to be
filed the same, with all exhibits thereto and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, or the substitute or substitutes
of any of them, may lawfully 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 date indicated.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, who being
duly authorized to sign, in the County of Fairfax, Virginia on April 3, 2000.
Date: May 30, 2000
By: /s/ Paul W. Richter
--------------------------------
Paul W. Richter, Vice President,
General Counsel and Secretary
SOCRATES TECHNOLOGIES CORPORATION
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ ANDREAS A. KELLER Chairman of the Board 5/30/00
-----------------------
Andreas A. Keller
/s/ TIMOTHY KEENAN President 5/30/00
-----------------------
Timothy Keenan
/s/ STEVE FOGARTY Chief Financial Officer and 5/30/00
----------------------- Vice President
Steve Fogarty
/s/ PAUL W. RICHTER Director, Vice President, General 5/30/00
----------------------- Counsel and Secretary
Paul W. Richter
/s/ FARSHAD SAJEDI Director 5/30/00
-----------------------
Farshad Sajedi
/s/ MARIELLEN LOWRY Director 5/30/00
-----------------------
Mariellen Lowry
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