As filed with the Securities and Exchange Commission on November 18, 2002.
Registration No. 333-97869
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SECURITIES AND EXCHANGE COMMISSION
-------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
BILLSERV, INC.
(Exact name of registrant as specified in its charter)
NEVADA 98-0190072
(State of Incorporation) (I.R.S. Employer Identification No.)
211 North Loop 1604 East, Suite 200
San Antonio, Texas 78232
210.402.5000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
-------------
MARSHALL N. MILLARD
Secretary, Senior Vice President and General Counsel
Billserv, Inc.
211 North Loop 1604 East, Suite 200
San Antonio, Texas 78232
210.402.5000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
TIMOTHY N. TUGGEY, ESQ.
Loeffler Jonas & Tuggey LLP
755 East Mulberry, Suite 200
San Antonio, Texas 78212
210.354.4300
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than
i
securities offered only in connection with dividend or interest reinvestment
plans, check the following box. |_|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
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Title of each class of Amount to be Proposed maximum Proposed Amount of
securities to be registered offering price per maximumaggregate Registration Fee
registered share offering price
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Common Stock 3,846,154(1) $ 0.90 $3,461,539
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Common Stock 150,000(3) $0.936 $ 140,400(4)
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Common Stock 50,000(3) $0.975 $ 48,750(4)
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Common Stock 100,000(3) $ 1.17 $ 117,000(4)
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Total Offering = 4,146,154 $3,767.689 $346.63(2)
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(1) Represents 200% of our good faith estimate of the number of shares that are
issuable to the selling security holder following the conversion of interest
and/or principal of a convertible note held by the selling security holder or
our payment of the interest and/or principal of the convertible note held by the
selling security holder with shares of our common stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. The calculation of the
registration fee is based on the average of the high and low prices for our
common stock on August 7, 2002 as quoted through the NASDAQ National Market.
(3) Represents the number of shares that may be sold by the selling security
holder following the exercise of a warrant.
(4) Pursuant to Rule 457(g), calculated based upon the exercise price of the
warrant.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(A) of The
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(A),
may determine.
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ii
211 North Loop 1604 East, Suite 200
San Antonio, Texas 78232
210.402.5000
Billserv, Inc.
4,146,154 SHARES
COMMON STOCK
Our common stock is traded on the NASDAQ National Market under the symbol
"BLLS." On November 13, 2002, the closing bid quotation for the common stock was
$0.48. Our stock may be delisted bythe NASDAQ National Market. See "Risk
Factors" beginning on page 1. Delisting could negatively affect our stock price.
This prospectus covers the resale of a total of up to 4,146,154 shares of our
common stock that may be issued pursuant to a convertible note and warrant that
were issued to the selling security holder in exchange for a $1.5 million
financing. See "Recent Transactions" below for additional details of this
transaction. The shares covered by this prospectus are being offered by the
selling security holder. Therefore, we will not receive proceeds from the sale
of shares. The selling stockholder is deemed an underwriter of the shares of
common stock, which it is offering.
The number of shares registered here represents 200% of our good faith estimate
of the number of shares that are issuable to the selling security holding
following the conversion of principal and interest of a convertible note held by
the selling security holder. If all of these shares are actually issued, the
selling security holder would own 20.14% of the outstanding shares of Billserv,
at an average acquisition cost of $0.36 per share. Buying shares of our common
stock involves a high degree of risk. See "Risk Factors" beginning on page 1 of
this prospectus for a discussion of certain factors that should be considered by
prospective purchasers of shares of our common stock.
Neither The Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the SEC is effective. This prospectus is not an offer to
sell these securities and is not soliciting an offer to buy these securities in
any state where the offer or sales is not permitted.
The date of this prospectus is November 15, 2002.
iii
TABLE OF CONTENTS
Page
PART 1
AVAILABLE INFORMATION..........................................................1
SUMMARY OF THE OFFERING........................................................1
RISK FACTORS...................................................................1
THE COMPANY....................................................................8
USE OF PROCEEDS................................................................9
RECENT TRANSACTIONS............................................................9
THE SELLING SECURITY HOLDER...................................................10
PLAN OF DISTRIBUTION..........................................................10
LEGAL MATTERS.................................................................11
EXPERTS.......................................................................12
WHERE YOU CAN FIND MORE INFORMATION...........................................12
PART 2
INFORMATION NOT REQUIRED IN PROSPECTUS........................................12
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION..........................12
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS............................13
ITEM 16. EXHIBITS.............................................................13
ITEM 17. UNDERTAKINGS.........................................................13
SIGNATURES....................................................................14
POWER OF ATTORNEY.............................................................15
EXHIBIT INDEX.................................................................16
OPINION OF COUNSEL............................................................17
CONSENT OF INDEPENDENT AUDITORS...............................................19
iv
PART I
AVAILABLE INFORMATION
Prior to filing the registration statement on Form S-3 of which this Prospectus
is a part, the Company has been subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such,
Billserv, Inc. is a "reporting company."
The Company has filed with the Commission a registration statement on Form S-3
of which this Prospectus is a part. This registration statement or any part
thereof, together with all other reports and other information filed by
Billserv, Inc. may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street N.W., Judiciary Plaza,
Washington, D.C. 20549. Copies of such material may be obtained from the Public
Reference Section of the Commission's Washington, D.C. office at prescribed
rates. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov.
SUMMARY OF THE OFFERING
This prospectus covers the resale of a total of up to
4,146,154 shares of our common stock that may be issued pursuant to a
convertible note and warrant that were issued to the selling security holder in
exchange for a $1.5 million loan to the Company. See "Recent Transactions" below
for additional details of this transaction. The selling security holder may from
time to time sell any or all of the shares of common stock on any stock
exchange, market or trading facility in which the shares are traded, or in
private transactions. These sales may be at fixed or negotiated prices. See
"Plan of Distribution" below for additional details of subsequent sales of the
shares offered hereby. The Company intends to furnish its shareholders with
annual reports containing audited financial statements certified by its
independent public accountants and quarterly reports containing unaudited
financial statements for each of the first three quarters of each fiscal year.
RISK FACTORS
An investment in the securities is speculative and involves a high degree of
risk. You should carefully consider the following factors and other information
in this prospectus before deciding to invest in the securities. You should only
purchase the securities if you can afford to lose your entire investment. The
risks described below may not be the only risks facing the Company. The
Company's management has identified all known risks.
WE MAY NOT CONTINUE TO EXIST AS A GOING CONCERN.
Due to a material shortfall from anticipated revenues and the inability to
access its funds held as collateral to guarantee certain executive margin loans,
the Company believes that its current available cash and cash equivalents and
investment balances along with anticipated revenues may be insufficient to meet
its anticipated cash needs for the foreseeable future. Accordingly, the Company
reduced its workforce by 36 employees in November 2002 and is currently
aggressively pursuing strategic alternatives, including investment in or sale of
the Company. The sale of additional equity or convertible debt securities would
result in additional dilution to the Company's stockholders, and debt financing,
if available, may involve restrictive covenants which could restrict operations
or finances. There can be no assurance that financing will be available in
amounts or on terms acceptable to the Company, if at all. If the Company cannot
raise funds, on acceptable terms, or achieve positive cash flow, it may not be
able to continue to exist, conduct operations, grow market share, take advantage
of future opportunities or respond to competitive pressures or unanticipated
requirements, any of which would negatively impact its business, operating
results and financial condition.
1
WE ARE NOT CERTAIN THAT WE CAN OBTAIN ADDITIONAL CAPITAL TO MEET FUTURE
REQUIREMENTS.
The Company currently plans to meet its capital requirements primarily through
issuance of equity securities, equipment leasing and new borrowing arrangements,
and in the longer term, revenue from operations. If current cash, marketable
securities and cash that may be generated from operations are insufficient to
satisfy liquidity requirements, the Company may seek to sell additional equity
or secure borrowings. The sale of additional equity or convertible debt
securities would result in additional dilution to the Company's stockholders,
and debt financing, if available, may involve restrictive covenants which could
restrict their operations or finances. There can be no assurance that financing
will be available in amounts or on terms acceptable to the Company, if at all.
If the Company cannot raise funds, on acceptable terms, wemay not be able to
continue to exist, expand our operation, grow market share, take advantage of
future opportunities or respond to competitive pressures or unanticipated
requirements, any of which would negatively impact ourbusiness, operating
results and financial condition.
WE ARE NOT PROFITABLE AND WE MAY NEVER BE PROFITABLE.
The Company was organized in 1998 and began operations as a public company in
1999 offering electronic billing services to other companies. The Company has
not been profitable since inception and may never achieve profitability. Through
September 30, 2002, the Company's accumulated deficit was $42.5 million.
Therefore, all information included herein may not necessarily reflect the
results of operations, financial position and cash flows of the Company in the
future.
WE ARE NOT CERTAIN THAT ELECTRONIC COMMERCE WILL GROW AND OBTAIN CONSUMER
ACCEPTANCE.
The electronic commerce market is a relatively new and growing service industry.
If the electronic commerce market fails to grow or grows slower than
anticipated, or if the Company, despite an investment of significant resources,
is unable to adapt to meet changing customer requirements or technological
changes in this emerging market, or if the Company's services and related
products do not maintain a proportionate degree of acceptance in this growing
market, the Company's business, operating results, and financial condition could
be materially adversely affected. Additionally, the security and privacy
concerns of existing and potential customers may inhibit the growth of the
electronic commerce market in general, and the Company's customer base and
revenues in particular. Similar to the emergence of the credit card and
automatic teller machine ("ATM") industries, the Company and other organizations
serving the electronic commerce market must educate users that electronic
transactions use encryption technology and other electronic security measures
that make electronic transactions more secure than paper-based transactions.
While the Company believes that it is utilizing proven applications designed for
premium data security and integrity to process electronic transactions, there
can be no assurance that the Company's use of such applications will be
sufficient to address the changing market conditions or the security and privacy
concerns of existing and potential customers. Adverse publicity raising concerns
about the safety or privacy of electronic transactions, or widely reported
breaches of the Company's or another providers' security, have the potential to
undermine consumer confidence in the technology and thereby have a materially
adverse effect on the Company's business. In addition, there can be no guarantee
that the Internet will continue to grow in acceptance or maintain its
reliability, or that new technologies might supplant the Internet in part or in
whole.
OUR SUCCESS DEPENDS ON WIDE USE OF ELECTRONIC BILL PAYMENT.
The Company's future financial performance will be materially affected by the
percentage of bill payments which can be cleared electronically. As compared
with making payment by paper check or by draft, the Company believes that
electronic payments: (i) cost much less to complete; (ii) give rise to fewer
errors, which are costly to resolve; and (iii) generate far fewer customer
inquiries and therefore consume fewer customer care resources. Accordingly, the
Company's inability to continue to decrease the percentage of remittances
effected by paper documents will result in flat or decreased margins, and a
reversal of the
2
current trend toward a smaller proportion of paper-based payments would have a
material adverse effect upon the Company's business, operating results, and
financial condition.
WE MAY NOT BE ABLE TO ADAPT RAPIDLY TO TECHNOLOGICAL CHANGE.
The Company's success is highly dependent on its ability to develop new and
enhanced services, and related products that meet changing customer
requirements. The market for the Company's services, however, is characterized
by rapidly changing technology, evolving industry standards, emerging
competition and frequent new and enhanced software, service and related product
introductions. In addition, the software market is subject to rapid and
substantial technological change. The Company, to remain successful, must be
responsive to new developments in hardware and semiconductor technology,
operating systems, programming technology and computer capabilities. In many
instances, the new and enhanced services, products, and technologies are in the
emerging stages of development and marketing, and are subject to the risks
inherent in the development and marketing of new software, services, and
products. The Company may not successfully identify new service opportunities,
and develop and bring new and enhanced services and related products to market
in a timely manner; there can be no assurance that any such services, products
or technologies will develop or will be commercially successful, that the
Company will benefit from such developments or that services, products, or
technologies developed by others will not render the Company's services, and
related products noncompetitive or obsolete. If the Company is unable, for
technological or other reasons, to develop and introduce new services and
products in a timely manner in response to changing market conditions or
customer requirements, or if new or enhanced software, services and related
products do not achieve a significant degree of market acceptance, the Company's
business, operating results and financial condition would be materially
adversely affected.
FEDERAL REGULATION OF ELECTRONIC COMMERCE AND FINANCIAL SERVICES COULD
SUBSTANTIALLY INCREASE OUR COSTS OF COMPLIANCE.
Management believes that the Company is not required to be licensed by the
Office of the Comptroller of the Currency, the Federal Reserve Board, or other
federal or state agencies that regulate or monitor banks or other types of
providers of electronic commerce services. There can be no assurance that a
federal or state agency will not attempt to regulate providers of electronic
commerce services, such as the Company, which could impede the Company's ability
to do business in the regulator's jurisdiction. The Company is subject to
various laws and regulations relating to commercial transactions generally, such
as the Uniform Commercial Code, and may also be subject to the electronic funds
transfer rules embodied in Regulation E, promulgated by the Federal Reserve
Board. Given the expansion of the electronic commerce market, it is possible
that the Federal Reserve might revise Regulation E or adopt new rules for
electronic funds transfer affecting users other than consumers. Because of
growth in the electronic commerce market, Congress has held hearings on whether
to regulate providers of services and transactions in the electronic commerce
market, and it is possible that Congress or individual states could enact laws
regulating the electronic commerce market. If enacted, such laws, rules and
regulations could be imposed on the Company's business and industry and could
have a material adverse effect on the Company's business, operating results, and
financial condition.
WE COULD LOSE ACCESS TO THE ELECTRONIC FUNDS TRANSFER SYSTEM THAT WE NEED TO RUN
OUR BUSINESS.
Billserv has a contractual relationship with Bank One, which is an Originating
Depository Financial Institution ("ODFI") in the Automated Clearinghouse (ACH)
Network. The ACH Network is a nationwide batch-oriented electronic funds
transfer system that provides for the interbank clearing of electronic payments
for participating financial institutions. An ODFI is a participating financial
institution that must abide by the provisions of the ACH Operating Rules and
Guidelines. Through its relationship with Bank One, Billserv is able to process
payment transactions on behalf of its customers and their consumers by
submitting payment instructions to Bank One in a prescribed ACH format. Billserv
pays volume-based fees to Bank One for debit and credit transactions processed
through Bank One each month, and pays fees for other transactions such as
returns, notices of change to bank accounts, test debits, file transmission and
depository fees. These fees are part of Billserv's cost structure. If the
Federal Reserve rules were to
3
change to restrict or modify access to the ACH, the Company's business could be
materially adversely affected.
OUR BUSINESS IS INTENSELY COMPETITIVE.
Portions of the electronic commerce market are becoming increasingly
competitive. The Company expects to face significant competition in all areas of
the EBPP market. Although few companies have focused their efforts as service
bureau consolidators in the EBPP industry, the Company expects that new service
bureau companies will emerge and compete for billers of all sizes. The Company
further believes that software providers, consumer front ends, banks and
Internet portals will provide increasingly competitive billing offerings for
billers of all sizes. In addition, a number of banks have developed, and others
in the future may develop, home banking services in-house. The Company believes
that banks will also compete for the EBPP business of billers.
The Company expects competition to increase from both established and emerging
companies and that such increased competition could result in reduced
transaction pricing that could materially adversely affect the Company's
business, operating results and financial condition.
Moreover, the Company's current and potential competitors, many of whom have
greater financial, technical, marketing, and other resources than the Company,
may respond more quickly than the Company to new or emerging technologies or
could expand to compete directly against the Company in any or all of its target
markets. Accordingly, it is possible that current or potential competitors could
rapidly acquire market share. There can be no assurance that the Company will be
able to compete against current or future competitors successfully or that
competitive pressures faced by the Company will not have a material adverse
effect on its business, operating results and financial condition.
WE DEPEND ON KEY PERSONNEL.
The Company's success depends to a significant degree upon the continued
contributions of its key management, marketing, service and related product
development and operational personnel, including its Chairman and Chief
Executive Officer, Michael R. Long; its President and Chief Operating Officer,
Louis A. Hoch; and its Chief Marketing Officer, Tony Diamond. All of these key
personnel are under contract with the Company. However, the Company has not
obtained key man insurance on any of these individuals. The Company's operations
could be affected adversely if, for any reason, any of these officers ceased to
be active in the Company's management. The Company maintains proprietary
nondisclosure and non-compete agreements with all of its key employees. The
success of the Company depends to a large extent upon its ability to retain and
continue to attract highly skilled personnel. Competition for employees in the
electronic commerce industry is intense, and there can be no assurance that the
Company will be able to attract and retain enough qualified employees. If the
Company experiences significant growth, it may become increasingly difficult to
hire, train and assimilate the new employees needed.
The Company's inability to retain and attract key employees could have a
material adverse effect on the Company's business, operating results, and
financial condition. To date, the Company has not experienced any of these
difficulties.
OUR QUARTERLY RESULTS MAY FLUCTUATE SUBSTANTIALLY.
The Company's quarterly results of operations may fluctuate significantly as a
result of a number of factors, including changes in the Company's pricing
policies or those of its competitors, relative rates of acquisition of new
customers, delays in the introduction of new or enhanced services, software and
related products by the Company or by its competitors or market acceptance of
such services and products, other changes in operating expenses, personnel
changes and general economic conditions. These factors will impact the Company's
operating results. Fluctuations in operating results could result in volatility
in the price of the Company's common stock.
4
PRODUCT DEFECTS COULD NEGATIVELY AFFECT OUR BUSINESS.
The software products utilized by the Company could contain errors or "bugs"
that could adversely affect the performance of services or damage a user's data.
In addition, as the Company increases its share of the electronic commerce
services market, software reliability and security demands will increase. The
Company attempts to limit its potential liability for warranty claims through
SAS 70 technical audits and limitation-of-liability provisions in its customer
agreements. There can be no assurance that the measures taken by the Company
will prove effective in limiting the Company's exposure to warranty claims.
Despite the existence of various security precautions, the Company's computer
infrastructure may also be vulnerable to viruses or similar disruptive problems
caused by its customers or third parties gaining access to the Company's
processing system.
EROSION OF REVENUE FROM SERVICES WOULD ADVERSELY AFFECT OUR BUSINESS.
One of the Company's customers that accounted for approximately 23% and 40% of
total consolidated revenues for the years ended December 31, 2001 and 2000,
respectively, is planning to develop an in-house EBPP offering during 2002. To
the extent that this potential loss of revenue is not mitigated by fees
generated from consulting services provided to this customer related to the
transition of their EBPP capabilities to an in-house offering, the Company's
revenues and profits will be adversely affected. The profitability of the
Company's business depends, to a substantial degree, upon billers electing to
continue to periodically renew contracts and receive services under existing
contracts. In the event that a substantial number of these customers were to
decline to renew these contracts or choose to discontinue receiving services for
any reason, the Company's revenues and profits would be adversely affected.
Sales of the Company's services are dependent upon customer demand for the
services, which is affected by pricing decisions, the competition of similar
products and services, and reputation of the products and services for
performance. Most of the Company's services are likely to be sold within the
utilities and financial services industries, and poor performance by the Company
in performing its services has the potential to undermine the Company's
reputation and affect future sales of other services. A substantial decrease in
revenue from services would have a material adverse effect upon the Company's
business, operating results, and financial condition.
WE FACE RISK OF LOSS FROM RETURNED TRANSACTIONS, MERCHANT FRAUD OR ERRONEOUS
TRANSMISSIONS.
The Company relies upon the Federal Reserve's ACH for electronic fund transfers
and conventional paper check and draft clearing systems for settlement of
payments by check or drafts. In its use of these established payment clearance
systems, the Company generally bears the same credit risks normally assumed by
other users of these systems arising from returned transactions caused by
insufficient funds, stop payment orders, closed accounts, frozen accounts,
unauthorized use, disputes, theft or fraud. In addition, the Company also
assumes the risk of merchant fraud and transmission errors when it is unable to
have erroneously transmitted funds returned by an unintended recipient. Merchant
fraud includes such actions as inputting false sales transactions or false
credits.
SYSTEMS FAILURE WOULD DISRUPT OUR BUSINESS.
The Company's operations are dependent on its ability to protect its computer
equipment against damage from fire, earthquake, power loss, telecommunications
failure or similar event. Any damage or failure that causes interruptions in the
Company's operations could have a material adverse effect on the Company's
business, operating results, and financial condition. The Company's property and
business interruption insurance may not be adequate to compensate the Company
for all losses that may occur.
WE HAVE ONLY LIMITED PROTECTION OF PROPRIETARY SERVICES.
The Company regards some of its services as proprietary and relies primarily on
a combination of trademark and trade secret laws, employee and third party
non-disclosure agreements, and other intellectual property protection methods to
protect its services. Existing intellectual property laws afford only limited
5
protection, and it may be possible for unauthorized third parties to copy the
Company's services and related products or to reverse engineer or obtain and use
information that the Company regards as proprietary. There can be no assurance
that the Company's competitors will not independently develop services and
related products that are substantially equivalent or superior to those of the
Company.
WE MAY BE DELISTED BY THE NASDAQ NATIONAL MARKET.
The Company and its stockholders benefit from identification with NASDAQ
National Market as a high caliber market. The Company received notification from
NASDAQ that its stock is subject to delisting in late November 2002 if listing
maintenance requirements are not met. We are not certain that we will meet these
requirements. In the event that the Company's shares are delisted, the liquidity
and price of our common stock may be negatively affected.
PENNY STOCK DISCLOSURE REQUIREMENTS MAY DISCOURAGE TRADING OF OUR STOCK.
Our stock may be subject to penny stock rules which regulate broker-dealer use
of mail or any other instrument of interstate commerce in penny stock
transactions. The penny stock rules also require broker-dealers to provide the
customer with comprehensive risk disclosure documents. As a result, a high
burden is placed on broker-dealers to discourage penny stock trades. Because we
rely on broker-dealers for our stock sales, we may not be able to promote our
stock adequately. These rules could discourage sales of the Company's stock.
OUR STOCK PRICE MAY FLUCTUATE SIGNIFICANTLY.
The market price of the Company's common stock is subject to significant
fluctuations in response to variations in quarterly operating results, the
failure of the Company to achieve operating results consistent with securities
analysts' projections of the Company's performance, and other factors. The stock
market has experienced extreme price and volume fluctuations and volatility that
has particularly affected the market prices of many technology, emerging growth,
and developmental stage companies. Since the Company becomes a "reporting
company", its stock price has fluctuated to a high of approximately three times
its opening trading price in December 1999 and a low of approximately one-third
of such price. To illustrate, and as a comparison with broader market
fluctuations, the table set forth below indicates this volatility in years 2000
and 2001, indexed to the NASDAQ Composite.
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12/31/99 6/30/00 12/31/00
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BILLSERV 100 283 32
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NASDAQ COMPOSITE 100 112 55
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12/31/99 6/30/00 12/31/00
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BILLSERV 100 80 42
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NASDAQ COMPOSITE 100 84 76
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Factors such as announcements of the introduction of new or enhanced services or
related products by the Company or its competitors, announcements of joint
development efforts or corporate partnerships in the electronic commerce market,
market conditions in the technology, banking, telecommunications and other
emerging growth sectors, and rumors relating to the Company or its competitors
may have a significant impact on the market price of the Company's common stock.
OUR PRINCIPAL STOCKHOLDERS EXERCISE SIGNIFICANT INFLUENCE OVER OUR COMPANY.
As of September 30, 2002, the directors and officers of the Company and their
affiliates collectively own approximately 9% of the outstanding shares of the
Company's common stock. As a result, these stockholders are able to exercise
significant influence over matters requiring stockholder approval,
6
including the election of directors and approval of significant corporate
transactions. Such concentration of ownership may have the effect of delaying or
preventing a change in control of the Company.
FUTURE SALES OF OUR SHARES MAY ADVERSELY AFFECT OUR STOCK MARKET PRICE.
As of September 30, 2002, the Company has 20,603,799 shares of common stock
outstanding. If the Company needs future equity financing to meet its
operational and strategic requirements, future equity financing may have a
significant dilutive effect on the Company's stock price.
CERTAIN ANTI-TAKEOVER PROVISIONS; PROVISIONS OF NEVADA LAW; CERTIFICATE OF
INCORPORATION, BYLAWS, AND STOCKHOLDER RIGHTS PLAN, MAY DISCOURAGE CORPORATE
ACTIONS.
On October 4, 2000, the Company approved a stockholder rights plan to protect
stockholders in the event of an unsolicited attempt to acquire the Company in
manner that would not be in the best interests of its stockholders. This
stockholders rights plan could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from attempting to
acquire, control of the Company.
The Company's Board of Directors is also classified into three classes of
directors serving staggered three-year terms. Such classification of the Board
of Directors expands the time required to change the composition of a majority
of directors and may tend to discourage a proxy contest or other takeover bid
for the Company. The issuance of common stock under a stockholder rights plan
could decrease the amount of earnings and assets available for distribution to
the holders of the Company's common stock or could adversely affect the rights
and powers, including voting rights, of the holders of the Company's common
stock. In certain circumstances, such issuance could have the effect of
decreasing the market price of the Company's common stock.
IT MAY BE DIFFICULT TO MANAGE OUR GROWTH.
The Company may experience a period of rapid growth that could place a
significant strain on its resources. The Company is at risk if the management is
unable to manage growth effectively. We may, for instance, need to make new
investments in equipment and personnel if consumer adoption rates of electronic
bill presentment and payment increase substantially. Any such personnel
deficiencies must be addressed by hiring needed personnel in a potentially high
demand market; computer infrastructure, financial systems and controls must all
be expanded and improved with the risk that time delays and increased costs will
not be offset by future profits.
FUTURE ACQUISITIONS COULD ADVERSELY AFFECT OUR BUSINESS.
In the future, the Company may pursue acquisitions of complementary service or
product lines, technologies, or businesses. Future acquisitions by the Company
could result in potentially dilutive issuance of equity securities, the
incurrence of debt and contingent liabilities, and amortization expenses related
to goodwill and other intangible assets, any of which could materially adversely
affect the Company's business, operating results, and financial condition. In
addition, acquisitions involve numerous risks, including difficulties in the
assimilation of the operations, technologies, services, and products of the
acquired companies, the diversion of management's attention from other business
concerns, risks of entering markets in which the Company has no or limited
direct prior experience, and the potential loss of key employees of the acquired
company. From time to time, the Company evaluates potential acquisitions of
businesses, services, products, or technologies. The Company has no present
commitments or agreements with respect to any material acquisition of other
businesses, services, products, or technologies. In the event that such an
acquisition was to occur, however, there can be no assurance that the Company's
business, operating results, and financial condition would not be materially
adversely affected.
7
IT IS UNLIKELY THAT WE WILL PAY DIVIDENDS.
The Company has paid no cash dividends and has no present plan to pay cash
dividends, intending instead to reinvest its earnings, if any. However, payment
of future cash dividends will be determined from time to time by its board of
directors, based upon its future earnings, financial condition, capital
requirements and other factors. The Company is not presently subject to any
restriction on its present or future ability to pay such dividends.
WE DEPEND UPON CONTRACTS WITH BILLERS.
The Company depends upon its agreements with customers that process billing
information. There can be no assurance that any of our customers will maintain
their relationships with us. Our customers could for a variety of reasons choose
to work with our competitors or develop an in-house electronic billing process.
There can be no assurance that we will maintain all of our customer
relationships, notwithstanding the existence of service contracts.
WE DEPEND UPON CONTRACTS WITH TRADING PARTNERS.
The Company's business is dependent upon executing and maintaining agreements
with distribution and payment partners such as CheckFree Services Corporation
and Paymentech, Inc. to provide dependable financial services for customers of
billers. Such financial services include ACH processing through the customer's
bank and delivery of good funds to the Company for remittance to the billers.
There can be no assurance that any of the distribution or payment partners will
be able to perform under these agreements in the future.
WE ANTICIPATE SIGNIFICANT BILLING SYSTEM EXPENDITURES.
To facilitate and support the growth anticipated in its business, the Company
plans to make certain expenditures in its operations over the next one to three
years. These expenditures are expected to be made in the areas of software
development, licensing, hardware and related staffing. The Company believes that
it will be able to fund these expenditures with internally generated funds and
financing, but there can be no assurance that such funds will be generated or
spent in these areas.
OUR FORWARD LOOKING STATEMENTS MAY PROVE INACCURATE.
This private placement memorandum contains certain forward-looking statements
and information relating to the Company that are based on the beliefs of the
Company's management as well as assumptions made by and information currently
available to the Company's management. When used in this document, the words
"anticipate," "believe," "estimate," "expect," and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current views
of the Company with respect to future events and are subject to certain risks,
uncertainties and assumptions, including the risk factors described in this
private placement memorandum. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described herein as anticipated, believed,
estimated, expected or intended.
THE COMPANY
We provide electronic bill presentment and payment ("EBPP") and related services
to companies generating recurring paper-based bills. EBPP is the process of
sending bills to consumers securely through the Internet and processing Internet
payment of bills utilizing an electronic transfer of funds.
Our service offering allows companies to outsource their electronic billing
process, providing them a single point of contact for developing, implementing
and managing their EBPP process. We offer services to consolidate customer
billing information and then securely deliver an electronic bill to the biller's
own Billserv-hosted payment Web site, the consumer's e-mail inbox and numerous
Internet bill consolidation
8
Web sites, such as those sponsored by financial institutions. Our EBPP services
allow billers to establish an interactive, online relationship with their
consumers by integrating Internet customer care and direct marketing with the
electronic bill. We provide professional services to assist with the
implementation and maintenance of an electronic billing offering. In addition,
we offer consumer marketing support to assist billers in encouraging their
consumers to switch from paper to electronic billing.
Our stock is traded on the NASDAQ National Market under the symbol BLLS. Our
corporate offices are located at 211 North Loop 1604 East, Suite 200, San
Antonio, Texas, 78232. Our phone number is (210) 402-5000.
USE OF PROCEEDS
The shares covered by this prospectus are being offered by the selling security
holder and not by us. Therefore, we will not receive proceeds from the sale of
shares.
RECENT TRANSACTIONS
On July 25, 2002, the Company executed a financing agreement with Laurus Master
Fund, Ltd. in exchange for proceeds of a $1.5 million convertible note bearing
interest at 7% annually and a three-year warrant to purchase 300,000 shares of
the Company's common stock at exercise prices of $0.936 for the first 150,000
shares, $0.975 for the next 50,000 shares, and $1.17 for the remaining 100,000
shares. The Company issued this stock under exemption available through Rule 506
of Regulation D. The Company received proceeds of $1.5 million before closing
costs and a management fee to the selling shareholder of approximately $159,432.
The Company intends to use the proceeds of the note to support general corporate
purposes and operations.
Laurus may convert the convertible note at any time into shares of our common
stock at a fixed conversion price of $0.78, subject to certain restrictions in
the purchase agreement. We may pay the principal and interest on the convertible
note, which has a one-year term, in cash, shares of our common stock or a
combination of cash and stock, except prior to the date of this prospectus we
must make such payments solely in cash unless Laurus consents to payment in
stock. If we choose to use our common stock to pay the note, the conversion
price will be the lesser of (i) $0.78 and (ii) 88% of the average of the 7
lowest closing prices during the 22 trading days prior to the date we give
notice of payment. We make no payments under the note until November 1, 2002, at
which time we will pay interest and one-ninth of the principal on the first
business day of each calendar month and on the maturity date of July 1, 2003.
However, Laurus has opted to delay the repayment of principal until no later
than December 1, 2002. If the monthly payments are made in cash, the amount paid
will be 105% of the monthly amount due. We granted Laurus a security interest in
our assets.
We expect to record a debt discount as a result of the issuance of the warrant
to Laurus of approximately $259,000, which amount will be charged to interest
expense over the term of the convertible note using the effective yield method.
Furthermore, upon the date of this prospectus, we expect to record an additional
debt discount as a result of the beneficial conversion feature of approximately
$283,000, which amount will be charged to interest expense at the date of
issuance. The amount related to the beneficial conversion feature was determined
by dividing the note proceeds allocated to the convertible security of
approximately $1,241,000 by the number of shares into which the note is
convertible. The resulting effective conversion price was then compared to the
fair value of the Company's stock on the issuance date. The difference between
the fair value of the stock and the effective conversion price was then
multiplied by the number of shares the convertible security was convertible into
at the date of issuance, taking into account the limitation on the number of
shares that Laurus could convert at that time. If the number of issued and
outstanding shares increases, additional expense will be recognized to reflect
the increase in the number of shares that Laurus is able to acquire through
conversion. The exemption relied upon was Rule 506 of Regulation D.
Laurus contractually agreed to restrict its ability to convert the convertible
note and/or exercise its warrants and receive shares of our common stock such
that the number of shares of common stock held by it and its affiliates after
such conversion and/or exercise does not exceed 4.9% of the then issued and
outstanding
9
shares of our common stock. However, in the event we redeem the
convertible note, default on the note, and other limited circumstances, the 4.9%
limitation shall not apply.
We also agreed to file with the Securities and Exchange Commission, and have
declared effective by November 25, 2002, a registration statement registering
the resale of the shares of our common stock issuable to Laurus upon conversion
or payment of the note and exercise of the warrant.
THE SELLING SECURITY HOLDER
One of our security holders may sell, from time to time, an estimated 4,146,154
shares of our common stock pursuant to this prospectus, including 300,000 shares
of our common stock issuable upon the exercise of a warrant and an estimated
3,846,154 shares of our common stock (which represents 200% of the shares
obtained upon conversion at the fixed conversion price of $0.78), and may be
issued to the selling security holder upon either the conversion of a
convertible note or issuance by us as payment of interest and/or principal of a
convertible note. The table below identifies the selling security holder and
indicates the number of shares that the selling security holder may sell
pursuant to this prospectus.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME OF NUMBER OF SHARES NUMBER OF SHARES PERCENT OF CLASS OWNED
SELLING OWNED PRIOR TO OWNED AFTER OFFERING AFTER OFFERING
SECURITY HOLDER OFFERING
- --------------------------------------------------------------------------------
Laurus Master 4,146,154(2) 0 0
Fund, Ltd. (1)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934,
Laurus Capital Management, L.L.C., a Delaware limited liability company, may be
deemed a control person of the shares owned by Laurus Master Fund, Ltd. David
Grin and Eugene Grin are the principals of Laurus Capital Management, L.L.C.
(2) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares as to which
the selling security holder has sole or shared voting power or investment power
and also any shares, which the selling stockholder has the right to acquire
within 60 days. The actual number of shares of common stock issuable upon the
conversion or payment of the convertible note is subject to the future market
price of our common stock, and could be materially less or more than the number
estimated in the table. Furthermore, the selling stockholder has contractually
agreed to restrict its ability to convert the convertible note or exercise its
warrants and receive shares of our common stock such that the number of shares
of common stock held by it and its affiliates after such conversion or exercise
does not exceed 4.9% of the then issued and outstanding shares of common stock.
PLAN OF DISTRIBUTION
The selling security holder and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, 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 security holder 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 the purchaser;
10
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;
o privately-negotiated transactions;
o broker-dealers may agree with the selling stockholder to sell a
specified number of such shares at a stipulated price per share; and
o a combination of any such methods of sale.
In the event sales are made to broker-dealers as principals, we would be
required to file a post-effective amendment to the registration statement of
which the prospectus forms a part. In such post-effective amendment, we would be
required to disclose the names of any participating broker-dealers and the
compensation arrangements relating to such sales. In addition, if any shares of
common stock or warrants offered for sale pursuant to this prospectus are
transferred, subsequent holders could not use this prospectus until a
post-effective amendment is filed, naming such holders.
The selling security holder may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling security holder may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling security holder defaults
on a margin loan, the broker may, from time to time, offer and sell the pledged
shares.
Broker-dealers engaged by the selling security holder may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling security holder (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling security holder does not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling security holder shall be deemed to be an "underwriter" 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.
We are required to pay all fees and expenses incident to the registration of the
shares, including fees and disbursements of counsel to the selling security
holder, but excluding brokerage commissions or underwriter discounts. We and the
selling security holder have agreed to indemnify each other against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters relating to the shares of common stock that may be offered
pursuant to this prospectus have been passed upon for us by Loeffler Jonas &
Tuggey LLP, counsel to the Company.
11
EXPERTS
The consolidated financial statements of the Billserv, Inc. appearing in the
Annual Report (Form 10-K/A) for the year ended December 31, 2001 have been
audited by Ernst & Young, LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements referred to above are incorporated herein by reference in
reliance upon such report given on authority of such firm as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and special reports, proxy statements, and other
information with the SEC. 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
on the public reference rooms. Our SEC filings are also available on the SEC's
Website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" information from other documents
that we file with them, which means that we can disclose important information
by referring to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to the sale of all the shares covered by this
prospectus:
o Annual Report on Form 10-K for the year ended December 31, 2001,
filed on April 1, 2002; and as amended and filed on November 18,
2002.
o Quarterly Report on Form 10-Q for the three months ended September 30,
2002, filed on November 14, 2002;
o Definitive Proxy Statement or Schedule 14A filed April 12, 2002; and
o Our Current Report on Form 8-K dated July 25, 2002, filed on August 1,
2002.
You may request a copy of these or any other filings, at no cost, by writing or
telephoning us using the following contact information:
Billserv, Inc.
Attn: Investor Relations
211 North Loop 1604 East, Suite 200
San Antonio, Texas 78232
210.402.5000
You should rely only on the information incorporated by reference or provided in
this prospectus or any supplement. We have not authorized anyone else to provide
you with different information. You should not assume that the information in
this prospectus or any supplement is accurate as of any date other than the date
on the front of those documents.PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Expenses in connection with the offering of the shares will be borne by the
registrant and are estimated as follows:
SEC Registration Fee................................. $ 364.63
Legal fees and expenses.............................. 2,500.00
Accounting fees and expenses......................... 2,500.00
---------
Total................................................ $5,364.63
12
(1) Pursuant to Rule 457(c) promulgated by the Commission under the
Securities Act, the registration fee was calculated based upon the
average of the high and low price per share of the Company's common
stock, as reported by the NASDAQ National Market, on August 7, 2002.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers or persons controlling
the Company, the Company has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
The Company has agreed to indemnify Laurus, its officers, directors and
constituent partners, if any, and each person controlling (within the meaning of
the Securities Act) Laurus, against all claims, losses, damages or liabilities
(or actions in respect thereof) suffered or incurred by any of them, to the
extent such claims, losses, damages or liabilities arise out of or are based
upon any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus or any related registration statement incident to
this Registration, or any omission (or alleged omission) to state therein a
material fact required to be stated herein or necessary to make the statements
herein not misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
actions or inaction required of the Company in connection with any such
Registration. The Company has agreed to reimburse each selling stockholder, its
officers, directors and constituent partners, if any, and each person who
controls Laurus, for any reasonable, documented legal and other expenses
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action.
Laurus has agreed to indemnify the Company, each of its directors and officers,
each placement agent and underwriter, if any, of the Company's securities
covered by this Registration Statement, each person who controls the Company or
such underwriter within the meaning of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) suffered or
incurred by any of them and arising out of or based upon any untrue statement
(or alleged untrue statement) of a material fact contained in this Registration
Statement or related prospectus, or any omission (or alleged omission) to state
herein a material fact required to be stated herein or necessary to make the
statements herein not misleading, but solely to the extent that either of the
foregoing occurs in reliance upon and conformity with information provided by
Laurus expressly for use in connection with any such Registration, or any
violation by Laurus of any rule or regulation promulgated under the Securities
Act applicable to Laurus and relating to actions or inaction required of Laurus
in connection with any such Registration and will reimburse the Company, such
directors, officers, partners, persons, placement agent, underwriters and
controlling persons for any reasonable, documented legal and other expenses
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action.
ITEM 16. EXHIBITS
See Exhibit Index immediately following the signature page hereof.
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
13
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 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, 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 provisions referred to in Item 15 hereof, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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, thereunto duly
authorized, in the City of San Antonio, State of Texas, on this 14th day of
November, 2002.
Billserv, Inc.
By: /s/ Terri A. Hunter
----------------------------------------
Terri A. Hunter
Director, Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer
14
POWER OF ATTORNEY
We, the undersigned officers and directors of Billserv, Inc., hereby severally
constitute and appoint Michael R. Long and Louis A. Hoch, and each of them
singly, our true and lawful attorneys, with full power to them in any and all
capacities, to sign any amendments to this Registration Statement on Form S-3
(including any Pre- and Post-Effective Amendments), and any related Rule 462(b)
registration statement or amendment thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof. 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 indicated
as of November 14th, 2002.
SIGNATURE TITLE
/s/ Michael R. Long Chairman of the Board and Chief
- ------------------------------------ Executive Officer
Michael R. Long
/s/ Louis A. Hoch Director, President and Chief
- ------------------------------------ Operating Officer
Louis A. Hoch
/s/ Terri A. Hunter Director, Executive Vice President,
- ------------------------------------ Chief Financial Officer and
Terri A. Hunter Principal Accounting Officer
/s/ Anthony L. Diamond Senior Vice President and Chief
- ------------------------------------ Marketing Officer
Anthony L. Diamond
/s/ Marshall N. Millard Secretary, Senior Vice President
- ------------------------------------ and General Counsel
Marshall N. Millard
/s/ E. Scott Crist Director
- ------------------------------------
E. Scott Crist
/s/ Peter G. Kirby Director
- ------------------------------------
Peter G. Kirby
/s/ Richard B. Bergman Director
- ------------------------------------
Richard B. Bergman
/s/ Mitchell D. Hovendick Director
- ------------------------------------
Mitchell D. Hovendick
15
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
5.1 Opinion of Loeffler, Jonas & Tuggey LLP. Filed herewith.
23.1 Consent of Ernst & Young, LLP, independent auditors to the registrant.
Filed herewith.
23.2 Consent of Loeffler, Jonas & Tuggey LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page of this Registration
Statement).
99.1 Certification of Chief Executive Officer
99.2 Certification of Chief Financial Officer
16