FILED PURSUANT TO RULE 424(b)(3)
FILE NO. 333-120390
PROSPECTUS
MARKLAND TECHNOLOGIES, INC.
PROSPECTUS SUPPLEMENT NO. 2 DATED DECEMBER 30, 2004
TO
THE PROSPECTUS DATED DECEMBER 2, 2004
AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME
THIS PROSPECTUS SUPPLEMENT DATED DECEMBER 30, 2004 ("SUPPLEMENT NO. 2")
SUPPLEMENTS THE INFORMATION WE PROVIDED IN OUR PROSPECTUS DATED DECEMBER 2,
2004, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME (THE "PROSPECTUS"), RELATING
TO THE RESALE, FROM TIME TO TIME OF UP TO 35,193,346 SHARES OF OUR COMMON STOCK
BY THE SELLING STOCKHOLDERS NAMED THEREIN.
SUPPLEMENT NO. 2 IS BEING DELIVERED TO YOU ALONG WITH THE PROSPECTUS.
SUPPLEMENT NO. 2 SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS AND IS
QUALIFIED BY REFERENCE TO THE PROSPECTUS EXCEPT TO THE EXTENT THAT THE
INFORMATION IN SUPPLEMENT NO. 2 SUPERSEDES THE INFORMATION CONTAINED IN THE
PROSPECTUS. STOCKHOLDERS AND PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW THE
PROSPECTUS IN CONJUNCTION WITH SUPPLEMENT NO. 2 BEFORE MAKING AN INVESTMENT
DECISION.
RECENT DEVELOPMENTS
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This prospectus supplement reflects a change to the registration
statement on Form SB-2 dated December 2, 2004 (the "Prospectus") of Markland
technologies, Inc. with respect to the exercise price for the warrants held by
the selling stockholders identified in the Prospectus. The Warrant Amendments
were filed with the SEC on December 30, 2004 as exhibits to our current report
on Form 8-K filed on that date. These filings are public documents available on
the SEC's web site at www.sec.gov. We urge you to obtain and read carefully
copies of these documents and this registration statement before making an
investment decision.
On December 28, 2004, and December 29, 2004, the Company entered into
agreements to amend terms of certain of its warrant to purchase shares of the
Company's Common Stock. In the aggregate, the amended warrants represent the
right to purchase 7,818,750 shares of the Company's Common Stock. All of the
shares underlying the amended warrants are registered pursuant to the
Registration Statement of which the Prospectus and this prospectus supplement
are a part and each of the warrant holders is a selling shareholder identified
in the Prospectus.
Amendment to Warrants Issued to DKR Soundshore Oasis Holding Fund Ltd. and DKR
Soundshore Strategic Holding Fund Ltd.
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On December 28, 2004, we entered into agreements (the "DKR AMENDMENTS")
with DKR Soundshore Oasis Holding Fund Ltd. and DKR Soundshore Strategic Holding
Fund Ltd. (collectively "DKR") to amend terms of warrants issued to DKR on
September 21, 2004 (the "DKR WARRANTS"), for the purchase of up to 5,200,000
shares of our common stock, $0.0001 par value per share (the "COMMON STOCK")
issued in connection with our September 21, 2004, private placement.
Specifically, subject to the terms and conditions contained in the DKR
Amendment, the parties have agreed:
o To amend the DKR Warrants so that DKR may exercise all or any
portion of the Warrants for an exercise price of $0.60 per
share of the Common Stock, from December 28, 2004 until
February 28, 2005 (the "DKR EXERCISE PERIOD"). At the end of
the DKR Exercise Period, the amendment shall expire and the
exercise terms of the DKR Warrants existing prior to December
28, 2004, shall be effective.
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o That DKR shall exercise a minimum of $600,000 in exercise
price of the DKR Warrants, as amended, on or before the close
of business, New York City time, on December 31, 2004.
o That the number of shares of Common Stock subject to the DKR
Warrants shall not be adjusted as a result of the temporary
reduction in exercise price.
o That at the end of the DKR Exercise Period, we will issue to
DKR warrants to purchase a number of shares of Common Stock
equal to the number of shares purchased by DKR during the DKR
Exercise Period at an exercise price of $1.50 per share (the
"NEW DKR WARRANTS").
Relationship with DKR
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As previously reported in our Current report on Form 8-K filed on
September 23, 2004, on September 21, 2004, we issued notes and warrants to DKR
in a private placement made in reliance on Section 4(2) of Securities Act of
1933. DKR holds our Common Stock and are "accredited investors" within the
meaning of Regulation D. The shares underlying these Notes and warrants issued
on September 21, 2004 have been registered with the SEC in a registration
statement on Form SB-2 that was declared effective on December 2, 2004 (File No.
333-120390).
A DESCRIPTION OF THE SEPTEMBER 21, 2004, PRIVATE PLACEMENT IS INCLUDED IN OUR
CURRENT REPORT ON FORM 8-K FILED ON SEPTEMBER 23, 2004 (FILE NO. 000-28863). THE
PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED IN CONNECTION WITH
THAT PRIVATE PLACEMENT WERE FILED AS EXHIBITS THERETO. A DESCRIPTION OF OUR
AGREEMENT TO REGISTER 4,400,000 SHARES OF COMMON STOCK UNDERLYING THE WARRANTS
ISSUED ON DECEMBER 7, 2004 IS INCLUDED IN OUR CURRENT REPORT ON FORM 8-K FILED
ON DECEMBER 9, 2004 (FILE NO. 000-28863). THESE FILINGS ARE PUBLIC DOCUMENTS
AVAILABLE ON THE SEC'S WEB SITE AT WWW.SEC.GOV. WE URGE YOU TO OBTAIN AND READ
CAREFULLY COPIES OF THESE DOCUMENTS AND THIS CURRENT REPORT AND ITS EXHIBITS.
Amendment to Warrants Issued to Greenfield Capital Partners LLC
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On December 29, 2004, we entered into an agreement (the "GREENFIELD
AMENDMENT") with Greenfield Capital Partners LLC ("GREENFIELD") to amend the
terms of a warrant issued to Greenfield on September 22, 2004 (the "GREENFIELD
WARRANT") for the purchase of up to 750,000 shares of Common Stock as
compensation for consulting services performed by Greenfield in connection with
our September 21, 2004, private placement. Specifically, subject to the terms
and conditions contained in the Greenfield Amendment, the parties have agreed:
o To amend the Greenfield Warrants so that Greenfield may
exercise all or any portion of the Greenfield Warrant for an
exercise price of $0.60 per share of Common Stock, from
December 29, 2004 until January 31, 2005 (the "GREENFIELD
EXERCISE PERIOD").
o That Greenfield shall exercise a minimum of 400,000 of the
Greenfield Warrant, as amended, on or before the close of
business, New York City time, on December 31, 2004, and
350,000 of the Greenfield Warrants, as amended, on or before
the close of business, New York City time, on January 31, 2004
o That the number of shares of Common Stock subject to the
Greenfield Warrant shall not be adjusted as a result of the
temporary reduction in exercise price.
o That section 2(b) of the Greenfield Warrant shall be amended
so as to prohibit the exercise of the Greenfield Warrants to
the extent that such issuance would result in Greenfield
beneficially owning more than 9.99% of the outstanding shares
of Common Stock.
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Relationship with Greenfield
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On September 22, 2004, we issued warrants, substantially the same in
form as the DKR Warrants, to Greenfield as compensation for consulting services
performed by Greenfield in connection with the our September 21, 2004, private
placement. This issuance was made in reliance on Section 4(2) of Securities Act
of 1933. Greenfield holds our Common Stock and is an "accredited investor"
within the meaning of Regulation D. The shares underlying the warrants issued on
September 22, 2004, have been registered with the SEC in a registration
statement on Form SB-2 that was declared effective on December 2, 2004 (File No.
333-120390).
As previously reported in our registration statement on Form SB-2 filed
on November 10, 2004, on November 9, 2004, we issued warrants to Greenfield as
compensation for consulting services performed by Greenfield in connection with
the our November 9, 2004, private placement. This issuance was made in reliance
on Section 4(2) of Securities Act of 1933.
Amendment to Warrants issued to Southridge Partners LP
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On December 29, 2004, we entered into an agreement (the "SOUTHRIDGE
AMENDMENT") with Southridge Partners LP ("SOUTHRIDGE") to amend the terms of a
warrant issued to Southridge on November 9, 2004 (the "SOUTHRIDGE WARRANT") for
the purchase of up to 568,750 shares of Common Stock in connection with our
November 9, 2004, private placement. Specifically, subject to the terms and
conditions contained in the Southridge Amendment, the parties have agreed:
o To amend the Southridge Warrant so that Southridge may
exercise all or any portion of the Southridge Warrant for an
exercise price of $0.60 per share of Common Stock, from
December 29, 2004 until December 31, 2004 (the "SOUTHRIDGE
EXERCISE PERIOD").
o That Southridge shall exercise all of the of the Southridge
Warrant, as amended, on or before the close of business, New
York City time, on December 31, 2004.
o That the number of shares of Common Stock subject to the
Southridge Warrant shall not be adjusted as a result of the
temporary reduction in exercise price.
o That section 11(a) of the Southridge Warrant shall be deleted
in its entirety so as to eliminate restrictions on the ability
of Southridge to exercise the Southridge Warrants based on the
number of shares of Common Stock beneficially owned by
Southridge.
Relationship with Southridge
- ----------------------------
As previously reported in our registration statement on Form SB-2 filed
on November 10, 2004, on November 9, 2004 we issued Notes and warrants to
Southridge in a private placement made in reliance on Section 4(2) of Securities
Act of 1933. Southridge holds our Common Stock and is an "accredited investors"
within the meaning of Regulation D. The shares underlying these Notes and
warrants issued on November 9, 2004 have been registered with the SEC in a
registration statement on Form SB-2 that was declared effective on December 2,
2004 (File No. 333-120390).
A DESCRIPTION OF THE NOVEMBER 9, 2004, PRIVATE PLACEMENT IS INCLUDED IN OUR
REGISTRATION STATEMENT ON FORM SB-2 FILED ON NOVEMBER 10, 2004 (FILE NO.
333-120390). THE PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED
IN CONNECTION WITH THAT PRIVATE PLACEMENT ARE SUBSTANTIALLY THE SAME AS THOSE
ISSUED IN OUR SEPTEMBER 21, 2004, PRIVATE PLACEMENT AND FILED AS EXHIBITS WITH
THE COMPANY'S CURRENT REPORT OF FORM 8-K FILED ON SEPTEMBER 23, 2004 (FILE NO.
000-28863). THESE FILINGS ARE PUBLIC DOCUMENTS AVAILABLE ON THE SEC'S WEB SITE
AT WWW.SEC.GOV. WE URGE YOU TO OBTAIN AND READ CAREFULLY COPIES OF THESE
DOCUMENTS AND THIS CURRENT REPORT AND ITS EXHIBITS.
Our common stock is quoted on the OTC Bulletin Board by the
National Association of Securities Dealers, Inc. under the symbol "MRKL.OB." On
December 29, 2004, the last reported sale price of our common stock on the OTC
Bulletin Board was $0.785 per share.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Except for historical facts, the statements in this supplement are
forward-looking statements. Forward-looking statements are merely our current
predictions of future events. These statements are inherently uncertain, and
actual events could differ materially from our predictions. Important factors
that could cause actual events to vary from our predictions include those
discussed under the headings "Risk Factors," "Management's Discussion and
Analysis of Our Financial Condition and Results of Operations" and "Business" in
our Prospectus. We assume no obligation to update our forward-looking statements
to reflect new information or developments. We urge readers to review carefully
the risk factors described in this prospectus and the other documents that we
file with the Securities and Exchange Commission. You can read these documents
at www.sec.gov.
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WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS WHETHER AS A RESULT OF NEW INFORMATION, NEW EVENTS OR
ANY OTHER REASON, OR REFLECT ANY EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS
PROSPECTUS OR THE DATE OF ANY APPLICABLE PROSPECTUS SUPPLEMENT OR THE DATE OF
DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS THAT INCLUDE
FORWARD-LOOKING STATEMENTS.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE RISK FACTORS BEGINNING ON PAGE 5 AND ELSEWHERE IN THE PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS SUPPLEMENT IS DECEMBER 30, 2004
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