As filed with the United States Securities and Exchange Commission on
June 16, 2004
Registration No. 333-
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UNITED STATES
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)
_______________
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, (Name, Address, Including Zip Code,
and Telephone Number, and Telephone
Including Area Code, of Registrant's Number, Including Area Code,
Principal Executive Offices) of Agent for Service)
Copies of all communications to:
H. JOHN MICHEL, JR., ESQ.
DRINKER BIDDLE & REATH LLP
ONE LOGAN SQUARE
18TH & CHERRY STREETS
PHILADELPHIA, PENNSYLVANIA 19103
_______________________
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. |_|
CALCULATION OF REGISTRATION FEE
=========================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
Title of Shares to be Offering Price Aggregate Registration
to be Registered Registered(1) Per Share(2) Offering Price(1) Fee
---------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value
1,098,000 $6.22 $6,829,560 $865.31
=========================================================================================================
(1) In the event of a share split, share dividend or similar transaction
involving the Registrant's shares, in order to prevent dilution, the number of
shares registered automatically shall be increased to cover the additional
shares in accordance with Rule 416(a) under the Securities Act.
(2) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee. The price and fee are based on the average of the highest and
lowest selling prices of the Registrant's common stock on June 14, 2004 on the
NASDAQ National Market.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
To be completed, dated June 16, 2004
PROSPECTUS
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.
MACE SECURITY INTERNATIONAL, INC.
UP TO 1,098,000 SHARES OF COMMON STOCK
We sold $5,005,050 of our common stock and warrants in a private
placement on May 26, 2004. This prospectus relates to the resale from time to
time of up to 1,098,000 shares of our common stock issued in the private
placement by the Selling Stockholders described in the section entitled "Selling
Stockholders" on page 11 of this prospectus. These shares consist of the
following:
- 915,000 shares of common stock; and
- 183,000 shares of common stock issuable upon the exercise of warrants
at an exercise price of $7.50 per share.
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 June 14, 2004 was $6.22 per share.
--------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
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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 United States Securities and Exchange Commission ("SEC")
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 ____________, 2004
TABLE OF CONTENTS
Page
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ABOUT THIS PROSPECTUS...............................................................................................2
THE COMPANY.........................................................................................................3
RISK FACTORS........................................................................................................4
FORWARD-LOOKING STATEMENTS.........................................................................................11
USE OF PROCEEDS....................................................................................................12
SELLING STOCKHOLDERS...............................................................................................12
PLAN OF DISTRIBUTION...............................................................................................13
LEGAL OPINION......................................................................................................15
EXPERTS............................................................................................................15
WHERE YOU CAN FIND MORE INFORMATION................................................................................15
INCORPORATION OF DOCUMENTS BY REFERENCE............................................................................15
ABOUT THIS PROSPECTUS
You should read this prospectus and the information and documents
incorporated by reference carefully. Such documents contain important
information you should consider when making your investment decision. See
"Incorporation of Documents by Reference" on page 14. You should rely only on
the information provided in this prospectus or documents incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. The Selling Stockholders are offering to sell and seeking
offers to buy shares of our common stock only in jurisdictions in which offers
and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common stock.
2
THE COMPANY
The following is only a summary. We urge you to read this entire
prospectus, including the information incorporated by reference from our other
filings with the SEC.
Mace Security International, Inc. was incorporated in Delaware on
September 1, 1993. We currently conduct our operations through two segments: the
Car and Truck Wash Segment, and the Security Products Segment.
Through our Car and Truck Wash Segment, we own and operate 50 car
washes and five truck washes in the United States. We operate 13 car wash
locations in the region surrounding Philadelphia, Pennsylvania, six car wash
locations in and near Sarasota, Florida, 12 car wash locations in and near
Phoenix, Arizona, and 19 car wash locations in Texas. We own five truck washes
located in Arizona, Indiana, Ohio and Texas. Except for nine of the Philadelphia
area car washes, which provide only exterior washing, and one Texas location,
which is a self-serve wash and lube facility, each of our car washes is full
service. Our Car and Truck Wash Segment provided 88.6%, 94.5%, and 99.5%, of our
revenues in fiscal years 2003, 2002, and 2001, respectively.
Our Security Products Segment is comprised of two operating divisions:
the Consumer Products Division and the Electronic Surveillance Products
Division. The Consumer Products Division designs, markets and sells consumer
safety products for use in homes and automobiles, and for personal protection.
Our consumer products include a line of defense sprays, personal alarms, home
security alarms, whistles, door jammers, and window and door lock alarms.
On August 12, 2002, we added the Electronic Surveillance Products
Division to the Security Products Segment when we acquired certain of the assets
and operations of Micro-Tech, Inc., a manufacturer and retailer of electronic
security and surveillance devices. We expanded our electronic surveillance and
security product offerings on September 26, 2003, when we acquired certain
assets and the operations of Vernex, Inc., a manufacturer and retailer of
electronic security monitors. Since the acquisition of Micro-Tech, Inc., we have
expanded our product lines and modified our sales and distribution methods in
the Electronic Surveillance Products Division. Presently, the major product
categories of our Electronic Surveillance Products Division include cameras,
digital video recorders, monitors, and home security devices, such as biometric
keypads. The Electronic Surveillance Products Division designs products for
manufacture on an OEM basis, and distributes the finished products through our
various sales channels, such as dealers, catalogs, and internet sales.
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RISK FACTORS
Before you decide to invest, you should consider carefully the risks
described below, together with the other information contained or incorporated
by reference in this prospectus. Any or all of these factors or others not
mentioned below could affect our business or our prospects. The risks and
uncertainties we have described below are not the only ones facing our company.
Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our business operations.
This section includes or refers to forward-looking statements. You
should refer to the explanation of the qualifications and limitations on
forward-looking statements in the section of this prospectus entitled
"Forward-Looking Statements," which begins on page 10 of this prospectus.
GENERAL RISKS
IF WE DO NOT RAISE ADDITIONAL CAPITAL, WE MAY NEED TO SUBSTANTIALLY REDUCE THE
SCALE OF OUR OPERATIONS AND CURTAIL OUR BUSINESS PLAN.
Our business plan involves growing through acquisitions and internal
development, each of which requires significant capital. Our capital
requirements also include working capital for daily operations and significant
capital for equipment purchases. Although we had positive working capital as of
December 31, 2003, we have a history of net losses and in some years we have
ended our fiscal year with a negative working capital balance. 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 of our outstanding equity. We
cannot assure you that our operating cash flow will be sufficient to fund
continued growth in accordance with our business plan or that we will obtain the
necessary financing. If we are unable to raise additional capital, we may need
to substantially reduce the scale of our operations and curtail our business
plan.
IF WE ARE NOT ABLE TO MANAGE GROWTH, OUR BUSINESS PLAN MAY NOT BE REALIZED.
Our business objectives include developing our Electronic Surveillance
Products Division, both internally and through acquisitions, and acquiring
additional car washes, if we can do so under advantageous terms. As such, our
business plan is predicated on growth. If we succeed in growing, it will place
significant burdens on our management and on our operational and other
resources. For example, it may be difficult to assimilate the operations and
personnel of an acquired business into our own business; we must integrate
management information and accounting systems of an acquired business into our
current systems; our management must devote its attention to assimilating the
acquired business, which diverts attention from other business concerns; we may
enter markets in which we have limited prior experience; and we may lose key
employees of an acquired business. We will also need to attract, train,
motivate, retain, and supervise senior managers and other employees. Failure to
manage these burdens successfully may result in a material adverse impact on our
business and our prospects.
IF WE VIOLATE THE FINANCIAL COVENANTS WITH OUR LENDERS, OUR BORROWINGS MAY BE
ACCELERATED.
Our bank debt borrowings as of March 31, 2004 were $30.6 million. Of
such borrowings, $5.4 million is classified as current as it is due in less than
12 months from March 31, 2004. Our business plan is dependent on refinancing
this debt as it becomes due. Our two most significant borrowings are notes
payable to General Motors Acceptance Corp. ("GMAC") in the amount of $11.4
million, $10.6 million of which was classified as non-current debt at March 31,
2004, and notes payable to Bank One, Texas, N.A. ("Bank One") in the amount of
$14.3 million, $10.2 million of which was classified as non-current debt at
March 31, 2004. The GMAC and Bank One agreements contain affirmative and
negative covenants, including the maintenance of certain levels of
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tangible net worth, maintenance of certain levels of unencumbered cash and
marketable securities, and the maintenance of certain debt coverage ratios on a
consolidated level.
At March 31, 2004, we were not in compliance with our consolidated debt
coverage ratio related to our GMAC notes payable. GMAC granted us a waiver of
acceleration relating to the consolidated debt coverage ratio through April 1,
2005 and, accordingly, a portion of the GMAC notes payable were reflected as
non-current on our financial statements at March 31, 2004. We currently expect
that we may not be in compliance with the debt coverage ratio as of June 30,
2004; therefore, if we do not obtain a further waiver of acceleration through
July 1, 2005, we will have to reflect the entire debt owed to GMAC as current.
If the GMAC notes are reflected as current in our June 30, 2004 Form 10-Q, our
stock price may be adversely affected.
Prior to March 31, 2004, we were in violation of certain financial
covenants contained in our term loan agreements with Bank One. As of March 31,
2004, we entered into amendments to those terms and, as a result, we were in
compliance at March 31, 2004. Our ongoing ability to comply with the debt
covenants under our credit arrangements and refinance our debt depends largely
on our achievement of adequate levels of cash flow. Our cash flow has been and
could continue to be adversely affected by weather patterns and economic
conditions. If our cash flows are less than expected or debt service, including
interest expense, increases more than expected, we may fall out of compliance
with the Bank One covenants, as amended, and need to seek additional waivers or
amendments. If we default on any of the Bank One or GMAC covenants and are not
able to obtain further amendments or waivers of acceleration, Bank One debt
totaling $14.3 million and GMAC debt totaling $11.4 million, including debt
recorded as long-term debt at March 31, 2004, could become due and payable on
demand, and our ability to operate would be materially and adversely affected.
WE HAVE REPORTED NET LOSSES IN THE PAST. IF WE CONTINUE TO REPORT NET LOSSES,
THE PRICE OF OUR COMMON STOCK MAY BE DEPRESSED.
For the year ended December 31, 2003, we reported a net loss, although
our business as a whole was cash flow positive. The majority of the reported
losses in 2003 related to impairment charges of intangible assets, particularly
goodwill, in accordance with SFAS 142, Goodwill and Other Intangible Assets.
Under SFAS 142, which became effective on January 1, 2002, we no longer amortize
goodwill and certain intangible assets determined to have indefinite useful
lives. Additionally, SFAS 142 requires annual fair value based impairment tests
of goodwill and other intangible assets identified with indefinite useful lives.
There can be no assurance that there will not be impairments in subsequent
reporting periods that will have a material impact on our earnings and equity.
IF WE LOSE THE SERVICES OF OUR EXECUTIVE OFFICERS, OUR BUSINESS MAY SUFFER.
If we lose the services of one or more of our executive officers and do
not replace them with experienced personnel, the loss could have a material
adverse effect on our business. The employment agreements of Robert M. Kramer,
Gregory M. Krzemien, and Ronald R. Pirollo expired on March 26, 2003. Mr. Kramer
is our chief operating officer, general counsel and secretary; Mr. Krzemien is
our chief financial officer and treasurer; and Mr. Pirollo is our chief
accounting officer and corporate controller. Messrs. Kramer and Krzemien are
working on a month-to-month at-will basis, and Mr. Pirollo is working on an
at-will basis. Without employment contracts, we may lose the services of any one
or more of Messrs. Kramer, Krzemien or Pirollo. In addition, we do not maintain
key-man life insurance policies on our executive officers.
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IF OUR INSURANCE IS INADEQUATE, WE COULD FACE SIGNIFICANT LOSSES.
We maintain various insurance coverages for our assets and operations.
These coverages include property coverages including business interruption
protection for each location. We maintain commercial general liability coverage
in the amount of $1 million per occurrence and $2 million in the aggregate with
an umbrella policy which provides coverage up to $25 million. We also maintain
workers' compensation policies in every state in which we operate. Commencing
July 2002, as a result of increasing costs of our insurance program, including
automobile, general liability, and workers' compensation coverage, we are
insured through participation in a captive insurance program with other
unrelated businesses. We maintain excess coverage through occurrence-based
policies. Although our automobile, general liability, and workers' compensation
policies are secured in a number of ways, and we believe such policies to be
adequate, there can be no assurance that our insurance will provide sufficient
coverage in the event a claim is made against us, or that we will be able to
maintain in place such insurance at reasonable prices. Furthermore, our business
involves potentially dangerous chemicals and operations, and, accordingly, we
face exposure to significant liabilities for injury. A claim against us for
which we do not have insurance, or do not have sufficient insurance, could have
a material adverse effect on our business and results of operations.
RISKS RELATED TO OUR SECURITY PRODUCTS SEGMENT
IF WE ARE NOT ABLE TO OPERATE OUR ELECTRONIC SURVEILLANCE PRODUCTS DIVISION
EFFECTIVELY, OUR BUSINESS WILL SUFFER.
We recently expanded our line of security products by adding the
Electronic Surveillance Products Division. We are incurring expenses to develop
this new line of products without having extensively tested the size or possible
profitability of the market for such products. There are numerous risks
associated with the new Electronic Surveillance Products Division that may
prevent us from operating such division profitably, including, among others:
risks associated with unanticipated liabilities of the acquired companies; risks
inherent with our management having limited experience in the electronic
security product market; risks relating to the size and number of competitors in
the electronic security product market, many of whom may be more experienced or
better financed; risks associated with the costs of entering into new markets
and expansion of product lines in existing markets; risks associated with
rapidly evolving technology and having inventory become obsolete; risks
associated with purchasing inventory before having orders for that inventory;
risks attendant to locating and maintaining reliable sources of OEM products and
component supplies in the electronic surveillance industry; risks related to
retaining key employees involved in future technology development and
communications with OEM suppliers; and risks associated with developing and
introducing new products in order to maintain competitiveness in a rapidly
changing marketplace. We also expect that there will be costs related to product
returns and warranties and customer support that we cannot quantify or
accurately estimate until we have more experience in operating the new division.
WE COULD BECOME SUBJECT TO LITIGATION REGARDING INTELLECTUAL PROPERTY RIGHTS,
WHICH COULD SERIOUSLY HARM OUR BUSINESS.
Although we have not been the subject of any such actions, third
parties may in the future assert against us infringement claims or claims that
we have violated a patent or infringed upon a copyright, trademark or other
proprietary right belonging to them. We design most of our security products and
contract with independent suppliers to manufacture those products and deliver
them to us. Certain of these products contain proprietary intellectual property
of these independent suppliers. Third parties may in the future assert claims
against our suppliers that such suppliers have violated a patent or infringed
upon a copyright, trademark or other proprietary right belonging to them. If
such infringement by our suppliers or us were found to exist, a party could seek
an injunction preventing the use of their intellectual property. In
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addition, if an infringement by us were found to exist, we may attempt to
acquire a license or right to use such technology or intellectual property. Most
of our suppliers have agreed to indemnify us against any such infringement
claim, but any infringement claim, even if not meritorious and/or covered by an
indemnification obligation, could result in the expenditure of a significant
amount of our financial and managerial resources.
IF OUR ORIGINAL EQUIPMENT MANUFACTURERS FAIL TO ADEQUATELY SUPPLY OUR PRODUCTS,
OUR SECURITY PRODUCTS SALES MAY SUFFER.
Our products are manufactured on an OEM basis. Reliance upon OEMs, as
well as industry supply conditions, generally involves several risks, including
the possibility of defective products (which can adversely affect our reputation
for reliability), a shortage of components and reduced control over delivery
schedules (which can adversely affect our distribution schedules), and increases
in component costs (which can adversely affect our profitability).
We have some single-sourced manufacturer relationships, either because
alternative sources are not readily or economically available or because the
relationship is advantageous due to performance, quality, support, delivery,
capacity, or price considerations. If these sources are unable or unwilling to
manufacture our products in a timely and reliable manner, we could experience
temporary distribution interruptions, delays, or inefficiencies, adversely
affecting our results of operations. Even where alternative OEMs are available,
qualification of the alternative manufacturers and establishment of reliable
supplies could result in delays and a possible loss of sales, which could affect
operating results adversely.
IF PEOPLE ARE INJURED BY OUR CONSUMER SAFETY PRODUCTS, WE COULD BE HELD LIABLE
AND FACE DAMAGE AWARDS.
We face claims of injury allegedly resulting from our defense sprays.
For example, we are aware of allegations that defense sprays used by law
enforcement personnel resulted in deaths of prisoners and of suspects in
custody. In addition to use or misuse by 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. In the event a lawsuit is
brought against us, we cannot give assurance that our insurance coverage will be
sufficient to cover any judgments won. If our insurance coverage is exceeded, we
will have to pay the excess liability directly.
IF GOVERNMENTAL REGULATIONS CHANGE OR ARE APPLIED DIFFERENTLY, OUR BUSINESS
COULD SUFFER.
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
United States Environmental Protection Agency. We believe that we are in
compliance with all current state and local statutes governing our handling and
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.
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RISKS RELATED TO OUR CAR AND TRUCK WASH SEGMENT
IF CONSUMER DEMAND FOR OUR CAR WASH SERVICE DROPS, OUR BUSINESS WILL SUFFER.
Our revenues are primarily derived from our Car and Truck Wash Segment.
As such, our financial condition and results of operations will depend
substantially on continued consumer demand for car wash services. Our car wash
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. Also, seasonal trends in some areas affect our car wash business. In
particular, long periods of rain and cloudy weather can adversely affect our car
wash business as people typically do not wash their cars during such periods.
Additionally, extended periods of warm, dry weather may encourage customers to
wash their cars themselves which also can adversely affect our car wash
business. We cannot give assurances that consumer demand for car wash services
will increase in the future, nor can we give assurances that consumer demand
will maintain its current level.
WE FACE SIGNIFICANT COMPETITION AND IF WE CANNOT COMPETE EFFECTIVELY WE MAY LOSE
MONEY AND THE VALUE OF OUR SECURITIES COULD DECLINE.
The car care industry is highly competitive. Competition is based
primarily on location, customer service, available services, and price. We face
competition from both inside and outside the car care industry, including gas
stations, gasoline companies, automotive companies, specialty stores and
convenience stores that offer automated car wash services. Because barriers to
entry into the car care industry are relatively low, competition may be expected
to continually arise from new sources not currently competing with us. In some
cases, our competitors may have greater financial and operating resources than
do we and we may lose customers and revenue to those competitors.
OUR CAR AND TRUCK WASH OPERATIONS FACE GOVERNMENTAL REGULATIONS AND IF WE ARE
UNABLE TO COMPLY WITH THOSE REGULATIONS, OUR BUSINESS MAY SUFFER.
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 care services businesses. Other car care services, such as
gasoline and lubrication, use 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:
i. transportation, storage, presence, use, disposal, and handling of
hazardous materials and wastes;
ii. discharge of storm water; and
iii. underground storage tanks.
If uncontrolled hazardous substances were found on our property,
including leased property, or if we were otherwise found to be in violation of
applicable laws and regulations, we could be responsible for clean-up costs,
property damage, fines, or other penalties, any one of which could have a
material adverse effect on our financial condition and results of operations.
IF OUR CAR WASH EQUIPMENT IS NOT MAINTAINED, OUR CAR WASHES WILL NOT BE
OPERABLE.
Many of our car washes have older equipment which requires frequent
repair or replacement. Although we undertake to keep our car washing equipment
in proper operating condition, the operating environment in car washes results
in frequent mechanical problems. If we fail to properly maintain the equipment
in a car wash, that car wash could become inoperable resulting in a loss of
revenue.
8
RISKS RELATED TO OUR STOCK
BY FURTHER INCREASING THE NUMBER OF SHARES OF OUR COMMON STOCK THAT MAY BE SOLD
INTO THE MARKET, THIS OFFERING COULD CAUSE THE MARKET PRICE OF OUR COMMON STOCK
TO DROP SIGNIFICANTLY, EVEN IF OUR BUSINESS IS DOING WELL.
On May 26, 2004, we completed a private placement financing in which
we sold to the Selling Stockholders 915,000 shares of our common stock and
warrants to purchase an aggregate of 183,000 shares of our common stock. We
agreed to register for resale the shares of common stock and the shares issuable
upon exercise of the warrants.
The 1,098,000 shares of our common stock covered by this prospectus
consist of the following:
o 915,000 shares of common stock; and
o 183,000 shares of common stock issuable upon exercise of the
warrants at an exercise price of $7.50 per share.
The warrants representing 183,000 shares of common stock currently are
"out-of-the-money," although they are exercisable. The remaining 915,000 shares
of common stock covered by this prospectus (i.e., the non-warrant shares)
represent approximately 6.4% of the total number of our shares of common stock
that are currently issued and outstanding. Sales of these shares in the public
market, or the perception that future sales of these shares could occur, could
have the effect of lowering the market price of our common stock below current
levels and make it more difficult for us and our shareholders to sell our equity
securities in the future.
OUR STOCK PRICE HAS BEEN, AND LIKELY WILL CONTINUE TO BE, VOLATILE AND YOUR
INVESTMENT MAY SUFFER A DECLINE IN VALUE.
The market prices for securities of companies quoted on The NASDAQ
Stock Market, including our market price, have in the past been, and are likely
to continue in the future to be, very volatile. That volatility depends upon
many factors, some of which are beyond our control, including:
o announcements regarding the results of expansion or development
efforts by us or our competitors;
o announcements regarding the acquisition of businesses or
companies by us or our competitors;
o technological innovations or new commercial products developed by
us or our competitors;
o changes in our, or our Suppliers', intellectual property
portfolio;
o issuance of new or changed securities analysts' reports and/or
recommendations applicable to us;
o additions or departures of our key personnel;
o operating losses by us;
o actual or anticipated fluctuations in our quarterly financial and
operating results and degree of trading liquidity in our common
stock; and
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o our ability to maintain our common stock listing on the Nasdaq
National Market.
We cannot assure you that your initial investment in our common stock
will not fluctuate significantly. One or more of these factors could
significantly harm our business and cause a decline in the price of our common
stock in the public market, which would adversely affect our business and
financial operations.
IF WE LOSE OUR LISTING ON THE NASDAQ NATIONAL MARKET, OUR STOCK WILL BECOME
SIGNIFICANTLY LESS LIQUID AND ITS VALUE MAY BE AFFECTED.
Our common stock is listed on the NASDAQ National Market with a bid
price of $5.46 at the close of the market on June 4, 2004. Although the recent
closing prices of our stock have been well in excess of $1.00, earlier in 2004
our stock traded at a price as low as $1.78. If the price of our common stock
falls below $1.00 and for 30 consecutive days remains below $1.00, we are
subject to being delisted from the NASDAQ National Market. Upon delisting from
the NASDAQ National Market, our stock would be traded on the NASDAQ SmallCap
Market until we maintain a minimum bid price of $1.00 for 30 consecutive days at
which time we can regain our listing on the NASDAQ National Market. If our stock
fails to maintain a minimum bid price of $1.00 for 30 consecutive days during a
180 day grace period on the NASDAQ SmallCap Market or a 360 day grace period if
compliance with certain core listing standards are demonstrated, we could
receive a delisting notice from the NASDAQ SmallCap Market. Upon delisting from
the NASDAQ SmallCap Market, our stock would be traded over-the-counter, more
commonly known as OTC. OTC transactions involve risks in addition to those
associated with transactions in securities traded on the NASDAQ National Market
or the NASDAQ SmallCap Market (together "NASDAQ-Listed Stocks"). Many OTC stocks
trade less frequently and in smaller volumes than NASDAQ-Listed Stocks.
Accordingly, our stock would be less liquid than it would otherwise be. Also,
the values of these stocks may be more volatile than NASDAQ-Listed Stocks. If
our stock is traded in the OTC market and a market maker sponsors us, we may
have the price of our stock electronically displayed on the OTC Bulletin Board,
or OTCBB. However, if we lack sufficient market maker support for display on the
OTCBB, we must have our price published by the National Quotations Bureau LLP in
a paper publication known as the "Pink Sheets." The marketability of our stock
will be even more limited if our price must be published on the "Pink Sheets."
BECAUSE WE ARE A DELAWARE CORPORATION, IT MAY BE DIFFICULT FOR A THIRD PARTY TO
ACQUIRE US, WHICH COULD AFFECT OUR STOCK PRICE.
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 an entity who is an "interested stockholder" for a
period of three 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
premium for our common stock above its market price.
10
IF WE ISSUE OUR AUTHORIZED PREFERRED STOCK, THE RIGHTS OF THE HOLDERS OF OUR
COMMON STOCK MAY BE AFFECTED AND OTHER ENTITIES MAY BE DISCOURAGED FROM SEEKING
TO ACQUIRE CONTROL OF OUR COMPANY.
Our certificate of incorporation authorizes the issuance of up to 10
million shares of "blank check" preferred stock that could be designated and
issued by our board of directors to increase the number of outstanding shares
and thwart a takeover attempt. 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 our
assets upon liquidation until satisfaction of any liquidation preference granted
to the holders of our preferred stock.
The "blank check" preferred stock may be viewed as having the effect of
discouraging an unsolicited attempt by another entity to acquire control of us
and may therefore have an anti-takeover effect. Issuances of authorized
preferred stock can be implemented, and have been implemented by some companies
in recent years, with voting or conversion privileges intended to make an
acquisition of a company more difficult or costly. Such an issuance, or the
perceived threat of 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.
OUR POLICY OF NOT PAYING CASH DIVIDENDS ON OUR COMMON STOCK COULD NEGATIVELY
AFFECT THE PRICE OF OUR COMMON STOCK.
We have not paid in the past, and do not expect to pay in the foreseeable
future, cash dividends on our common stock. We expect to reinvest in our
business any cash otherwise available for dividends. Our decision not to pay
cash dividends may negatively affect the price of our common stock.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference herein
contain forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements relate to future events or our future financial
performance and can be identified by terminology such as "may," "will,"
"should," "expects," "anticipates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks outlined under "Risk
Factors" that may cause our, or our industries', actual results, levels of
activity, performance or achievements to vary from those expressed or implied by
such forward-looking statements. Before deciding to purchase our common stock
you should carefully consider the risks described in the "Risk Factors" section,
in addition to the other information set forth in this prospectus and the
documents incorporated by reference herein.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Moreover, neither we nor any
other person assumes responsibility for the accuracy and completeness of such
statements. We do not intend to update any of the forward-looking statements
after the date of this prospectus to conform such statements to actual results
except as required by law.
11
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock by the Selling Stockholders. We could receive up to $1,372,500 in proceeds
from the cash exercise of the warrants by the Selling Stockholders, which
proceeds would be used for general corporate purposes.
SELLING STOCKHOLDERS
This prospectus relates to 915,000 shares of our currently outstanding
common stock and 183,000 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 "Selling Stockholders").
The table below provides the following information:
o the names of the Selling Stockholders as of the date of this
prospectus;
o the number of common shares that each such holder may offer and
sell from time to time under this prospectus; and
o the number of common shares beneficially owned by each such
holder as of the date of this prospectus and as of the completion
of the offering to which this prospectus relates, in each case as
determined in accordance with applicable rules promulgated by the
SEC.
The information presented in this table assumes that the Selling
Stockholders will sell all of the shares offered under this prospectus. However,
because the Selling Stockholders may sell all, some, or none of their shares
under this prospectus, or in another permitted manner, no assurances can be
given as to the actual number of shares that will be sold by the Selling
Stockholders or that will be held by the Selling Stockholders after completion
of the offering to which this prospectus relates.
This table is prepared based upon information supplied to us by the
listed Selling Stockholders. However, since the date on which the information in
this table is presented, the Selling Stockholders listed in this table may have
sold or transferred, in transactions exempt from registration requirements of
the Securities Act, some or all of their shares or may have acquired additional
shares. The shares covered by this prospectus may be offered from time to time
by the Selling Stockholders named below or by their pledgees, donees,
transferees, or other successors in interest. Information concerning the Selling
Stockholders may change from time to time and changed information will be
presented in a supplement to this prospectus if and when necessary or required.
----------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF NUMBER OF SHARES BENEFICIALLY
SHARES OWNED IF ALL
BENEFICIALLY OUTSTANDING REGISTERED SHARES
OWNED BEFORE SHARES WARRANT SHARES ARE SOLD
SELLING STOCKHOLDERS REGISTRATION(1) REGISTERED REGISTERED NUMBER PERCENT
----------------------------------------------------------------------------------------------------------------
Langley Partners, L.P. 1,098,000(1) 915,000 183,000 0 0
--------------------------------------------------------------------------------------------------- ------------
(1) Includes warrants to purchase 183,000 shares of common stock.
According to information supplied to us by the foregoing entities, none
of the Selling Stockholders listed above is a broker-dealer and each such
Selling Stockholder that is an affiliate of a broker-dealer purchased the common
shares covered by this prospectus in the ordinary course of business and, at the
time
12
of such purchase, did not have any agreements or understandings, directly or
indirectly, with any person to distribute those shares.
To our knowledge, none of the Selling Stockholders nor any of their
affiliates, officers, directors, or principal equity holders has held any
position or office or has had any material relationship with us within the past
three years.
PLAN OF DISTRIBUTION
The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of the shares
covered by this prospectus. The Selling Stockholders will act independently of
us in making decisions with respect to the timing, manner and size of each sale.
The Selling Stockholders may sell shares of common stock directly to
purchasers from time to time. Alternatively, they may from time to time offer
the common stock to or through underwriters, broker-dealers or agents, who may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholder or the purchasers of such common stock
for whom they may act as agents.
Such sales may be made on any stock exchange, quotation system
(including the NASDAQ National Market), market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange or quotation system (including the NASDAQ
National Market);
o privately negotiated transactions;
o settlement of short sales entered into after the date of this
prospectus;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale;
o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
or
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
13
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Each Selling Stockholder does not expect these commissions and
discounts relating to its sales of shares to exceed what is customary in the
types of transactions involved.
In connection with the sale of our common stock or interests therein,
the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholder has
informed us that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the common stock. There is no
underwriter or coordinating broker acting in connection with the proposed sale
of our common stock by the Selling Stockholders. Because Selling Stockholders
may be deemed to be "underwriters" within the meaning of the Securities Act,
they will be subject to the prospectus delivery requirements of the Securities
Act.
We are required to pay certain fees and expenses incurred by us
incident to the registration of the shares. We have agreed to indemnify the
Selling Stockholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
We have agreed to keep this prospectus effective until the earlier of
the date on which (i) the shares may be resold by the Selling Stockholders
without registration and without regard to any volume limitations by reason of
Rule 144(k) under the Securities Act or any other rule of similar effect or (ii)
all of the shares have been sold pursuant to the prospectus or Rule 144 under
the Securities Act or any other rule of similar effect. The shares will be sold
only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the shares may
not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of the distribution. In addition, the
Selling Stockholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may
limit the timing of purchases and sales of shares of our common stock by the
Selling Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of
the sale.
14
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
Our consolidated financial statements incorporated in this prospectus
by reference to our Annual Report on Form 10-K filed on March 15, 2004, as
amended on Form 10-K/A filed on April 28, 2004, for the fiscal year ended
December 31, 2003 have been so incorporated in reliance on the report of Grant
Thornton LLP, independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any document we file at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
request copies of these documents by writing to the SEC and paying a fee for the
copying cost. Please call the SEC at 1-800-SEC-0330 for more information about
the operation of the public reference room. Our SEC filings are also available
to the public at the SEC's web site at http://www.sec.gov. In addition, our
stock is listed for trading on The Nasdaq National Market. You can read and copy
reports and other information concerning us at the offices of the National
Association of Securities Dealers, Inc. located at 1735 K Street, Washington,
D.C. 20006.
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 Selling 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.
INCORPORATION OF DOCUMENTS BY REFERENCE
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 Selling Stockholders sell all of the shares
covered by this prospectus:
1. Our annual report on Form 10-K for the year ended December 31, 2003,
filed on March 15, 2004, as amended on April 28, 2004.
15
2. Our quarterly report on Form 10-Q for the quarter ended March 31, 2004,
filed on May 5, 2004.
3. Our following current reports on Form 8-K:
(a) Form 8-K dated May 5, 2004; and
(b) Form 8-K dated May 28, 2004.
4. The description of our common stock contained in the registration
statement on Form 8-A (File No. 0-22810) filed by us to register such securities
under the Exchange Act, 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 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:
o 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;
o a statement contained in any accompanying prospectus supplement
relating to a specific offering of shares; or
o 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. Requests for copies should be directed to:
Louis D. Paolino, Jr.
Chief Executive Officer
Mace Security International, Inc.
1000 Crawford Place, Suite 400
Mt. Laurel, New Jersey 08054
(856) 778-2300
16
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.............................$ 865
Accounting Fees and Expenses.................................................... 6,000
Legal Fees and Expenses.......................................................... 17,500
Miscellaneous Expenses........................................................... 2,500
------------
Total...........................................................................$ 26,865
============
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
II-1
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
-------- --------
4.1 The Company's Amended and Restated Certificate of Incorporation
4.2+ The Company's Amended and Restated Bylaws
4.3 Warrant dated May 26, 2004 to purchase 183,000 shares of the Company's common stock,
issued to the Selling Stockholder
5 Opinion of Drinker Biddle & Reath LLP
10.1 Securities Purchase Agreement dated May 26, 2004 between the Company and the
Purchasers set forth on the signature pages thereof
10.2 Registration Rights Agreement dated May 26, 2004 between the Company and the
Purchasers set forth on the signature pages thereof
10.3 First Amendment to the Securities Purchase Agreement, dated June 8, 2004
23 Consent of Grant Thornton LLP
24 Power of Attorney (included in signature page)
+ Incorporated by reference from Exhibit 3.3 to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1999, filed with the SEC on March
29, 2000.
II-2
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. 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 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 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 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
II-3
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) 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.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 June 16, 2004.
MACE SECURITY INTERNATIONAL, INC.
By: /s/ Louis D. Paolino, Jr.
----------------------------------------------------
Louis D. Paolino, Jr.
Chairman of the Board, Chief Executive Officer and
President
Date: June 16, 2004
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, 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. June 16, 2004
---------------------------
Louis D. Paolino, Jr. Chief Executive Officer,
Chairman of the Board and President
(Principal Executive Officer)
/s/ Gregory M. Krzemien June 16, 2004
---------------------------
Gregory M. Krzemien Chief Financial Officer
and Treasurer (Principal
Financial Officer)
/s/ Ronald R. Pirollo June 16, 2004
---------------------------
Ronald R. Pirollo Chief Accounting Officer
and Corporate Controller
(Principal Accounting Officer)
/s/ Matthew J. Paolino June 16, 2004
---------------------------
Matthew J. Paolino Director, Vice President
/s/ Constantine N. Papadakis June 16, 2004
---------------------------
Constantine N. Papadakis Director
/s/ Mark S. Alsentzer June 16, 2004
---------------------------
Mark S. Alsentzer Director
/s/ Burton Segal June 16, 2004
---------------------------
Burton Segal Director
EXHIBIT INDEX
Exhibit Number Document
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4.1 The Company's Amended and Restated Certificate of Incorporation
4.2+ The Company's Amended and Restated Bylaws
4.3 Warrant dated May 26, 2004 to purchase 183,000 shares of the Company's common stock,
issued to Selling Stockholder
5 Opinion of Drinker Biddle & Reath LLP
10.1 Securities Purchase Agreement dated May 26, 2004 between the Company and the
Purchasers set forth on the signature pages thereof
10.2 Registration Rights Agreement dated May 26, 2004 between the Company and the
Purchasers set forth on the signature pages thereof
10.3 First Amendment to the Securities Purchase Agreement, dated June 8, 2004
23 Consent of Grant Thornton LLP
24 Power of Attorney (included in signature page)
+ Incorporated by reference from Exhibit 3.3 to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1999, filed with the SEC on March
29, 2000.