FILED PURSUANT TO RULE 424(b)(3)
FILE NO. 333-120390
PROSPECTUS
MARKLAND TECHNOLOGIES, INC.
PROSPECTUS SUPPLEMENT NO. 4 DATED JANUARY 12, 2005
TO
THE PROSPECTUS DATED DECEMBER 2, 2004
AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME
THIS PROSPECTUS SUPPLEMENT DATED JANUARY 12, 2005, ("SUPPLEMENT NO. 4")
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. 4 IS BEING DELIVERED TO YOU ALONG WITH THE PROSPECTUS.
SUPPLEMENT NO. 4 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. 4 SUPERSEDES THE INFORMATION CONTAINED IN THE
PROSPECTUS. STOCKHOLDERS AND PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW THE
PROSPECTUS IN CONJUNCTION WITH SUPPLEMENT NO. 4 BEFORE MAKING AN INVESTMENT
DECISION.
RECENT DEVELOPMENTS
-------------------
DECEMBER 28, 2004, AMENDMENTS TO EXERCISE PRICES OF CERTAIN WARRANTS
- --------------------------------------------------------------------
SUPPLEMENT NO. 4 REFLECTS CHANGES TO OUR PROSPECTUS DATED DECEMBER 2,
2004, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, (THE "PROSPECTUS") OF
MARKLAND TECHNOLOGIES, INC. (THE "COMPANY" OR "WE") 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 and 29, 2004, the Company entered into agreements to
amend terms of certain of its warrants to purchase shares of the Company's
Common Stock. In the aggregate, the amended warrants represent the right to
purchase 6,518,750 shares of the Company's Common Stock. Unless otherwise noted,
all of the shares underlying the amended warrants 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), (the "December 2, 2004 Registration
Statement"), of which the Prosepctus, as amended and supplemented from time to
time is a part.
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.
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").
The DKR Amendments and the form of the New DKR Warrants have been filed
as Exhibits 99.1, 99.2 and 99.3 to our current report on Form 8-K dated December
30, 2004.
As of January 11, 2005, DKR has exercised the DKR Warrants to purchase
3,000,000 shares of Common Stock.
Relationship with DKR
- ---------------------
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 the December 2, 2004
Registration Statement . DKR are selling stockholders that may sell the shares
registered with the SEC pursuant to the December 2, 2004 Registration Statement.
A DESCRIPTION OF THE SEPTEMBER 21, 2004, PRIVATE PLACEMENT IS INCLUDED IN THE
PROSPECUTS. THE PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED IN
CONNECTION WITH THAT PRIVATE PLACEMENT WERE FILED AS EXHIBITS TO OUR CURRENT
REPORT ON 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.
-2-
Amendment to Warrants Issued to Greenfield Capital Partners LLC
- ---------------------------------------------------------------
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 21, 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.
The Greenfield Amendment has been filed as Exhibit 99.4 to our current
report on Form 8-K dated December 30, 2004. As of January 11, 2005,
Greenfield has exercised the Greenfield Warrant in full.
Relationship with Greenfield
- ----------------------------
On September 21, 2004, we issued 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 21, 2004, have been
registered with the SEC in the registration statement on Form SB-2 that was
declared effective on December 2, 2004 (File No. 333-120390). Greenfield is one
of the selling stockholders that may sells shares of our common stock registered
in the December 2, 2004 Registration Statement.
As previously reported in our registration statement on Form
SB-2 filed on November 10, 2004, on November 9, 2004, we also 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. The shares
underlying the warrants issued on November 9, 2004, are not covered by the
December 2, 2004 Registration Statement.
A DESCRIPTION OF THE SEPTEMBER 21, 2004, PRIVATE PLACEMENT IS INCLUDED IN THE
PROSPECTUS. THE PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED IN
CONNECTION WITH THAT PRIVATE PLACEMENT WERE FILED AS EXHIBITS TO OUR CURRENT
REPORT ON FORM 8-K FILED WITH THE SEC 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.
-3-
Amendment to Warrants issued to Southridge Partners LP
- ------------------------------------------------------
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.
The Southridge Amendment has been filed as Exhibit 99.5 to our current
report on Form 8-K dated December 30, 2004. As of January 11, 2005,
Southridge had exercised the Southridge Warrant in full.
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 investor"
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 the
registration statement on Form SB-2 that was declared effective on December 2,
2004 (File No. 333-120390). Southridge is one of the selling stockholders that
may sells shares of our common stock registered in the December 2, 2004
Registration Statement.
A DESCRIPTION OF THE NOVEMBER 9, 2004, PRIVATE PLACEMENT IS INCLUDED IN THE
PROSPECTUS. THE PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED IN
CONNECTION WITH THIS PRIVATE PLACEMENT WERE FILED AS EXHIBITS TO OUR
REGISTRATION STATEMENT ON FORM SB-2 FILED ON NOVEMBER 10, 2004 (FILE NO.
333-120390). 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.
JANUARY 4, 2005, AMENDMENTS TO EXERCISE PRICES OF CERTAIN WARRANTS
- ------------------------------------------------------------------
SUPPLEMENT NO. 4 REFLECTS CHANGES TO THE PROSPECTUS DATED DECEMBER 2,
2004, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, (THE "PROSPECTUS") OF
MARKLAND TECHNOLOGIES, INC. WITH RESPECT TO THE EXERCISE PRICE FOR THE WARRANTS
HELD BY CERTAIN SELLING STOCKHOLDERS IDENTIFIED IN THE PROSPECTUS THAT IS A PART
OF THE DECEMBER 2, 2004 REGISTRATION STATEMENT. THE WARRANT AMENDMENTS WERE
FILED WITH THE SEC ON JANUARY 7, 2005, 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.
-4-
On January 4, 2005, the Company entered into agreements to amend terms
of certain of its warrants to purchase shares of the Company's Common Stock. In
the aggregate, the amended warrants represent the right to purchase 2,375,000
shares of the Company's Common Stock. Unless otherwise noted, all of the shares
underlying the amended warrants have been registered with the SEC in the
December 2, 2004 Registration Statement, of which the prospectus is a part.
AMENDMENT TO WARRANTS ISSUED TO DAVID STEFANSKY
- -----------------------------------------------
On January 4, 2005, we entered into an agreement (the "STEFANSKY
AMENDMENT") with David Stefansky ("STEFANSKY") to amend the terms of a warrant
issued to him on September 21, 2004 (the "STEFANSKY WARRANTS"), for the purchase
of up to 375,000 shares of our common stock, $0.0001 par value per share (the
"COMMON STOCK") as compensation for consulting services performed by Stefansky
in connection with our September 21, 2004, private placement. Specifically,
subject to the terms and conditions contained in the Stefansky Amendment, the
parties have agreed:
o To amend the Stefansky Warrant so that Stefansky may exercise
all or any portion of the Stefansky Warrant for an exercise
price of $0.60 per share of Common Stock, from January 4,
2005, until January 7, 2005.
o That Stefansky shall exercise all of the of the Stefansky
Warrant, as amended, on or before the close of business, New
York City time, on January 7, 2005.
o That the number of shares of Common Stock subject to the
Stefansky Warrant shall not be adjusted as a result of the
temporary reduction in exercise price.
The Stefansky Amendment has been filed as Exhibit 99.1 to our current
report on Form 8-K dated January 7, 2005. As of January 11, 2005,
Stefansky has exercised the Stefansky Warrant in full.
RELATIONSHIP WITH STEFANSKY
- ---------------------------
We issued warrants to Stefansky in compensation for his services in
connection with our September 21, 2004, and November 9, 2004, private
placements. The September 21, 2004, transaction is described in our Current
report on Form 8-K filed on September 23, 2004. These warrants were issued in
reliance on Section 4(2) of Securities Act of 1933. The shares underlying the
warrants issued on September 21, 2004 have been registered with the SEC in the
December 2, 2004 Registration Statement. Mr. Stefansky is one of the selling
stockholders that may sells shares of our common stock registered in the
December 2, 2004 Registration Statement. The shares underlying the warrants
issued on November 9, 2004 have not been registered with the SEC.
A DESCRIPTION OF THE SEPTEMBER 21, 2004, PRIVATE PLACEMENT IS INCLUDED THE
PROSPECUTS. THE PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED IN
CONNECTION WITH THAT PRIVATE PLACEMENT WERE FILED AS EXHIBITS TO OUR CURRENT
REPORT ON 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 A COPY THIS CURRENT REPORT AND ITS
EXHIBITS.
-5-
Amendment to Warrants Issued to Richard Rosenblum
- -------------------------------------------------
On January 4, 2005, we entered into an agreement (the "ROSENBLUM
AMENDMENT") with Richard Rosenblum ("ROSENBLUM") to amend the terms of a warrant
issued to Rosenblum on September 21, 2004 (the "ROSENBLUM WARRANT"), for the
purchase of up to 375,000 shares of Common Stock as compensation for consulting
services performed by Rosenblum in connection with our September 21, 2004,
private placement. Specifically, subject to the terms and conditions contained
in the Rosenblum Amendment, the parties have agreed:
o To amend the Rosenblum Warrant so that Rosenblum may exercise
all or any portion of the Rosenblum Warrant for an exercise
price of $0.60 per share of Common Stock, from January 4,
2005, until January 7, 2005.
o That Rosenblum shall exercise all of the of the Rosenblum
Warrant, as amended, on or before the close of business, New
York City time, on January 7, 2005.
o That the number of shares of Common Stock subject to the
Rosenblum Warrant shall not be adjusted as a result of the
temporary reduction in exercise price.
The Rosenblum Amendment has been filed as Exhibit 99.2 to our current
report on Form 8-K dated January 7, 2005. As of January 11, 2005,
Rosenblum has exercised the Rosenblum Warrant in full.
Relationship with Rosenblum
- ---------------------------
We issued warrants to Rosenblum in compensation for his services in
connection with our September 21, 2004, and November 9, 2004, private
placements. The September 21, 2004, transaction is described in our Current
report on Form 8-K filed on September 23, 2004. These warrants were issued in
reliance on Section 4(2) of Securities Act of 1933. The shares underlying the
warrants issued on September 21, 2004, have been registered with the SEC in the
December 2, 2004 Registration Statement. Mr. Rosenmblum is one of the selling
stockholders that may sells shares of our common stock registered in the
December 2, 2004 Registration Statement. The shares underlying the warrants
issued on November 9, 2004 have not been registered with the SEC.
A DESCRIPTION OF THE SEPTEMBER 21, 2004, PRIVATE PLACEMENT IS INCLUDED IN THE
PROSPECTUS. THE PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED IN
CONNECTION WITH THAT PRIVATE PLACEMENT WERE FILED AS EXHIBITS TO OUR CURRENT
REPORT ON 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 A COPY OF THIS CURRENT REPORT AND ITS
EXHIBITS.
AMENDMENT TO WARRANT ISSUED TO HARBORVIEW MASTER FUND LP
- --------------------------------------------------------
On January 4, 2005, we entered into an agreement (the "HARBORVIEW
AMENDMENT") with Harborview Master Fund LP ("HARBORVIEW") to amend the terms of
a warrant issued to Harborview on November 9, 2004 (the "HARBORVIEW WARRANT")
for the purchase of up to 1,625,000 shares of Common Stock in connection with
our November 9, 2004, private placement. Specifically, subject to the terms and
conditions contained in the Harborview Amendment, the parties have agreed:
o To amend the Harborview Warrant so that Harborview may
exercise all or any portion of the Harborview Warrant for an
exercise price of $0.60 per share of Common Stock, from
January 4, 2005 until February 28, 2005, after which time the
exercise price will return to its original level.
o That Harborview shall exercise the Harborview Warrant to
purchase not less than 250,000 share of Common Stock on or
before the close of business, New York City time, on January
7, 2005.
o That the number of shares of Common Stock subject to the
Harborview Warrant shall not be adjusted as a result of the
temporary reduction in exercise price.
-6-
The Harborview Amendment has been filed as Exhibit 99.3 to our current
report on Form 8-K dated January 7, 2005. As of January 11, 2005,
Harborview has exercised the Harborview Warrant to purchase 850,000
shares of Common Stock.
RELATIONSHIP WITH HARBORVIEW
- ----------------------------
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
Harborview in a private placement made in reliance on Section 4(2) of Securities
Act of 1933. Harborview holds our Common Stock and is an "accredited investor"
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 the
December 2, 2004 Registration Statement The shares underlying these warrants
have been registered with the SEC in the December 2, 2004 Registration
Statement. Harborview is one of the selling stockholders that may sells shares
of our common stock registered in the December 2, 2004 Registration Statement.
A DESCRIPTION OF THE NOVEMBER 9, 2004, PRIVATE PLACEMENT IS INCLUDED IN THE
PROSPECTUS. THE PURCHASE AGREEMENT AND THE FORMS OF NOTE AND WARRANT EXECUTED IN
CONNECTION WITH THAT PRIVATE PLACEMENT HAVE BEEN FILED AS EXHIBITS TO THE
REGISTRATION STATEMENT ON FORM SB-2 FILED ON NOVEMBER 10, 2004 (FILE NO.
333-120390). 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.
JANUARY 5, 2005, PREFERRED STOCK RESTRICTION AGREEMENT
- ------------------------------------------------------
THIS PROSPECTUS SUPPLEMENT REFLECTS CHANGES TO THE PROSPECTUS DATED
DECEMBER 2, 2004, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME (THE
"PROSPECTUS") OF MARKLAND TECHNOLOGIES, INC. (THE "COMPANY" OR "WE") WITH
RESPECT TO OUR SERIES D CUMULATIVE CONVERTIBLE PREFERRED STOCK. THE PREFERRED
STOCK RESTRICTION AGREEMENT WAS FILED WITH THE SEC ON JANUARY 11, 2005, AS AN
EXHIBIT 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.
Preferred Stock Restriction Agreement
- -------------------------------------
On January 5, 2005, the Company entered into a preferred stock
restriction agreement (the "AGREEMENT") with James LLC (the "SERIES D HOLDER"),
to restrict the sale of shares of the Company's series D cumulative convertible
preferred stock (the "SERIES D PREFERRED STOCK") and shares of the Company's
common stock, par value $0.0001 per share (the "COMMON STOCK") issuable upon
conversion of the Series D Preferred Stock (the "CONVERSION SHARES" and,
collectively with the Series D Preferred Stock, the "SUBJECT SECURITIES") .
Specifically, subject to the terms and conditions contained in the Agreement,
the parties have agreed that the Series D Holder will not transfer or dispose of
any of the Subject Securities prior to March 15, 2005. Beginning on March 15,
2005, the Series D Holder may sell its Conversion Shares in broker's
transactions subject to Rule 144 promulgated under the Securities Act of 1933.
However, beginning on June 15, 2005, the Series D Holder's sales of the
Conversion Shares shall be limited to not more than $600,000 per calendar month.
Beginning on September 13, 2005, the monthly limit on the Series D Holder's
sales of the Conversion Shares shall be increased to $750,000 per calendar
month.
-7-
The Agreement calls for the Company to enter into a Private Equity
Credit Agreement with an investor Brittany Capital Management, Ltd. (the
"INVESTOR"), for an equity line of credit in the amount of $10,000,000 (the
"EQUITY Line"). The Equity Line shall be subject to certain conditions
enumerated in Section 4.8 of that certain Purchase Agreement, dated September
21, 2004, between the company and investors named therein. The Company is
required, within twenty-one (21) days of the execution of the Private Equity
Credit Agreement, to file a registration statement with the Securities and
Exchange Commission (the "SEC") providing for the resale by the Investor of the
shares of Common Stock sold to the Investor pursuant to the Equity Line (the
"EQUITY LINE REGISTRATION STATEMENT"). In the event that the Equity Line
Registration Statement has not been declared effective by the SEC prior to June
15, 2005, the Company shall pay a cash penalty of $50,000 per month to the
Investor.
In connection with the execution of the Agreement, the Company agreed
to issue warrants to purchase one million eighty-eight thousand one hundred
sixty (1,088,160) shares of Common Stock as set forth in the Lock-Up agreement
with the Series D Holder dated September 21, 2004, at an exercise price of $0.60
per share. The Series D Holder is entitled to have the shares subject to these
warrants included in the first registration statement filed by the Company with
the SEC following the Equity Line Registration Statement. These warrants are
unregistered securities and are being issued in reliance on Section 4(2) of the
Securities Act of 1933.
On January 12, 2005, the Agreement was amended to reflect that the
Agreement will terminate when the Series D Holder no longer holds any shares of
the Series D Preferred Stock, or on February 28, 2005, in the event that the
Company has not closed on the transaction referenced in Item 7.01 of the
Company's Current Report on Form 8-K filed on December 30, 2004 (File No.
000-28863), on or before February 28, 2005.
Relationship with the James LLC
- -------------------------------
James LLC is the sole holder of our Series D Cumulative Convertible
Preferred Stock. As reported in our Current report on Form 8-K filed with the
SEC on September 23, 2004, on September 21, 2004, the Company and James LLC
entered into a lock-up agreement wherein James LLC agreed not to sell, transfer
or otherwise dispose of any of its shares of Series D Preferred Stock, except
through conversion and sale of the Conversion Shares under Rule 144. As
consideration for this lock-up agreement, the Company agreed to issue warrants
to purchase one million eighty-eight thousand one hundred sixty (1,088,160)
shares of Common Stock with an exercise price of $0.80 per share.
A DESCRIPTION OF THE SEPTEMBER 21, 2004, LOCK UP AGREEMENT IS INCLUDED IN
POST-EFFECTIVE AMENDMENT No. 4 TO THE REGISTRATION STATEMENT ON FORM SB-2 FILE
No. 333-15395).THE LOCK UP AGREEMENT AND THE FORM OF WARRANT EXECUTED IN
CONNECTION WITH THAT LOCK UP AGREEMENT WERE FILED AS EXHIBITS TO OUR CURRENT
REPORT ON FROM 8-K FILED ON SEPTEMBER 23, 2004 (File No. 000-28863). THE
AMENDMENT TO THE LOCK UP AGREEMENT WAS FILED AS AN EXHIBIT TO OUR UCRRENT REPORT
ON FORM 8-K FILED ON JANUARY 12, 2005 (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.
Appointment of our new CFO and COO
- ----------------------------------
On December 7, 2004, we appointed Gino Pereira as our Chief Financial
Officer. Since August of 2004, Mr. Pereira had been acting as a paid consultant
to us in matters involving finances. As of November 18, 2004, Mr. Pereira had
received $62,497 for his consulting services.
As part of this transaction Mr. Kenneth P. Ducey, Jr., resigned as the
Chief Financial Officer of Markland Technologies, Inc., in order to concentrate
on his duties as President of our company. This action was not a result of a
disagreement on any matter relating to our operations, policies or practices.
-8-
On December 7, 2004, we appointed Dr. Joseph P. Mackin as our chief
operating officer. Dr. Mackin is a member of our Board of Directors as well as
that of our wholly owned subsidiary, EOIR Technologies, Inc., (EOIR). He has
been employed by EOIR since 2000, and is currently serving as EOIR's president.
Dr. Mackin is responsible for strategic technology development and Homeland
Security initiatives as well as a key participant in corporate day-to-day
operations at EOIR.
Our board of directors consists of the following members: Robert
Tarini, Kenneth P. Ducey, Jr. and Joseph P. Mackin.
DECEMBER 30, 2004, CONTRACTS WITH PRINCIPAL EXECUTIVE OFFICERS AND VERDI
CONSULTING, INC. AND ASSET GROWTH COMPANY, INC.
- --------------------------------------------------------------------------------
SUPPLEMENT NO.4 REFLECTS CHANGES TO THE PROSPECTUS DATED DECEMBER 2,
2004, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME(THE "PROSPECTUS") OF
MARKLAND TECHNOLOGIES, INC. WITH RESPECT TO CONTRACTS BETWEEN THE COMPANY AND
OUR PRINCIPAL EXECUTIVE OFFICERS, ASSET GROWTH COMPANY AND VERDI CONSULTING,
INC. THE CONTRACTS WERE FILED WITH THE SEC ON JANUARY 7, 2005, 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 30, 2004, the Company, entered into employment agreements with four
members of its senior management team. Robert Tarini, Chief Executive Officer,
Ken Ducey, President, Joseph Mackin, Chief Operating Officer, and Gino Pereira,
Chief Financial Officer.
NEW EMPLOYMENT AGREEMENT WITH MR. TARINI
The employment agreement for Mr. Tarini provides for a term of five years,
beginning January 2, 2004. Mr. Tarini's cash salary is set at $300,000; this
amount does not include shares of Common Stock issued to Mr. Tarini pursuant to
the employment agreement.
The employment agreement provides for periodic grants of the Company's Common
Stock to Mr. Tarini, the amount of such grants to be determined as a percentage
of the Company's outstanding securities as described below:
- ---------------------- ------------------------- --------------------------
Grant Stock Percentage Final Date
- ---------------------- ------------------------- --------------------------
Grant One 2.5% April 1, 2004
- ---------------------- ------------------------- --------------------------
Grant Two 1.0% July 1, 2004
- ---------------------- ------------------------- --------------------------
Grant Three 1.0% October 1, 2004
- ---------------------- ------------------------- --------------------------
Grant Four 2.0% January 3, 2005
- ---------------------- ------------------------- --------------------------
Grant Five 1.0% July 1, 2005
- ---------------------- ------------------------- --------------------------
As reported in our current report on Form 8-K filed on January 7, 2005, the
first grant, made on January 3, 2005, was for 2,867,458 shares. These shares
have not been registered with the SEC and were granted in reliance on Section
4(2) of the Securities Act of 1933.
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The employment agreement contains a change in control provision that
provides for an acceleration of stock grants and cash salary to Mr. Tarini upon
a change in control resulting in the voluntary or involuntary termination of a
majority of the current board of directors, the current chief executive officer
or the current president. In the event of such a change in control, all pending
stock grants will immediately be granted and an amount equal to the lesser of
three times his then current cash salary or the cash salary owed through the end
of the employment agreement will be placed in an escrow account for distribution
to Mr. Tarini.
The employment agreement provides that in the event that Mr. Tarini's
engagement with the Company is terminated by the Company without cause (as that
term is defined in Section 8 of the agreement), or by Mr. Tarini for "Good
Reason" (as that term is defined in Section 8(f) of the agreement, the Company
shall continue to provide Mr. Tarini's cash salary and provide health insurance
through the earlier of (a) three months from the date of termination or (b)
until Mr. Tarini shall find other full time employment. In the event that Mr.
Tarini's employment with the Company is terminated for any other reason, there
shall be no continuation of cash salary payments or health insurance.
The employment agreement provides a mechanism whereby the Company may, at the
Company's discretion, acquire all or a portion of the Common Stock granted to
Mr. Tarini, at a price of $0.01 per share, in the event that Mr. Tarini's
engagement with the Company is terminated prior to the registration, or sale
pursuant to Rule 144, of those shares. This agreement supplants a previous
employment agreement with Mr. Tarini dated May 12, 2004, which was terminated.
Employment Agreement with Ken Ducey
- -----------------------------------
The employment agreement for Mr. Ducey provides for a term of five
years, beginning January 2, 2004. Mr. Ducey's cash salary is set at $180,000;
this amount does not include shares of Common Stock issued to Mr. Ducey pursuant
to the employment agreement.
The employment agreement provides for periodic grants of the Company's
Common Stock to Mr. Ducey, the amount of such grants to be determined as a
percentage of the Company's outstanding securities as described below:
- ----------------- ------------------------------ -------------------------
Grant Stock Percentage Final Date
- ----------------- ------------------------------ -------------------------
Grant One 0.5% April 1, 2004
- ----------------- ------------------------------ -------------------------
Grant Two 0.25% July 1, 2004
- ----------------- ------------------------------ -------------------------
Grant Three 0.25% October 1, 2004
- ----------------- ------------------------------ -------------------------
Grant Four 0.50% January 3, 2005
- ----------------- ------------------------------ -------------------------
Grant Five 0.50% July 1, 2005
- ----------------- ------------------------------ -------------------------
As reported in our current report on Form 8-K filed on January 7, 2005, the
first grant, made on January 3, 2005, was for 716,864 shares. These shares have
not been registered with the SEC and were granted in reliance on Section 4(2) of
the Securities Act of 1933.
The employment agreement contains a change in control provision that
provides for an acceleration of stock grants and cash salary to Mr. Ducey upon a
change in control resulting in the voluntary or involuntary termination of a
majority of the current board of directors, the current chief executive officer
or the current president. In the event of such a change in control, all pending
stock grants will immediately be granted and an amount equal to the lesser of
three times his then current cash salary or the cash salary owed through the end
of the employment agreement will be placed in an escrow account for distribution
to Mr. Ducey.
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The employment agreement provides that in the event that Mr. Ducey's
engagement with the Company is terminated by the Company without cause (as that
term is defined in Section 8 of the agreement), or by Mr. Ducey for "Good
Reason" (as that term is defined in Section 8(f) of the agreement, the Company
shall continue to provide Mr. Ducey's cash salary and provide health insurance
through the earlier of (a) three months from the date of termination or (b)
until Mr. Ducey shall find other full time employment. In the event that Mr.
Ducey's employment with the Company is terminated for any other reason, there
shall be no continuation of cash salary payments or health insurance.
The employment agreement provides a mechanism whereby the Company may,
at the Company's discretion, acquire all or a portion of the Common Stock
granted to Mr. Ducey, at a price of $0.01 per share, in the event that Mr.
Ducey's engagement with the Company is terminated prior to the registration, or
sale pursuant to Rule 144, of those shares. This agreement supplants a previous
employment agreement with Mr. Ducey dated May 12, 2004, which was terminated.
STRATEGIC OPERATIONS CONTRACTOR AGREEMENT WITH ASSET GROWTH COMPANY
- -------------------------------------------------------------------
The Company also entered in to a Strategic Operations Contractor
Agreement with Asset Growth Company, Inc ("ASSET GROWTH"), on December 30, 2004.
The Company's president, Ken Ducey, is a director, officer and controlling
shareholder of Asset Growth. The Strategic Operations Contractor Agreement
provides for a term of engagement of five years beginning on January 2, 2004, to
perform duties related to business development and administrative services.
Under the terms of the agreement, Asset Growth received payment of
$120,000 per year, payable in equal monthly installments, as well as periodic
grants of the Company's Common Stock. The amount of the grants is calculated as
a percentage of the Company's outstanding securities, and described below:
- ------------------- --------------------------- -------------------------
Grant Stock Percentage Final Date
- ------------------- --------------------------- -------------------------
Grant One 2.0% April 1, 2004
- ------------------- --------------------------- -------------------------
Grant Two 0.75% July 1, 2004
- ------------------- --------------------------- -------------------------
Grant Three 0.75% October 1, 2004
- ------------------- --------------------------- -------------------------
Grant Four 1.5% January 3, 2005
- ------------------- --------------------------- -------------------------
Grant Five 0.5% July 1, 2005
- ------------------- --------------------------- -------------------------
As reported in our current report on Form 8-K filed on January 7, 2005, the
first grant, made on January 3, 2005, was for 2,150,593 shares. These shares
have not been registered with the SEC and were granted in reliance on Section
4(2) of the Securities Act of 1933.
The Strategic Operations Contractor Agreement provides for an
acceleration of stock grants and payment to Asset Growth upon a change in
control resulting in the voluntary or involuntary termination of a majority of
the current board of directors, the current chief executive officer, the current
president or the current chief financial officer. In the event of such a change
in control, all pending grants of stock will immediately be granted and an
amount equal to the lesser of three times its then annual payment or the
payments owed through the end of the Strategic Operations Contractor Agreement
will be placed in an escrow account for distribution to Asset Growth.
The Strategic Operations Contractor Agreement provides that in the
event that Asset Growth Company's engagement with the Company is terminated by
the Company without cause (as that term is defined in Section 8 of the
agreement), or by Asset Growth Company for "Good Reason" (as that term is
defined in Section 8(f) of the agreement, the Company shall continue to provide
Asset Growth Company's cash payments and provide health insurance benefits
through the earlier of (a) three months from the date of termination or (b)
until Asset Growth Company shall find other full time employment. In the event
that Asset Growth Company's engagement with the Company is terminated for any
other reason, there shall be no continuation of cash salary payments or health
insurance.
-11-
The agreement provides a mechanism whereby the Company may, at the
Company's discretion, acquire all or a portion of the Common Stock granted to
Asset Growth, at a price of $0.01 per share, in the event that its engagement
with the Company is terminated prior to the registration, or sale pursuant to
Rule 144, of those shares. This agreement supplants a previous Strategic
Operations Contractor agreement with Asset Growth dated May 12, 2004, which was
terminated.
EMPLOYMENT AGREEMENT WITH DR. MACKIN
- ------------------------------------
The employment agreement for Dr. Mackin provides for a term of five
years, beginning January 3, 2005. Dr. Mackin's cash salary is set at $300,000 as
well as periodic grants of the Company's Common Stock. The employment agreement
accelerated the vesting date for options previously granted to Dr. Mackin and
provides for periodic grants of the Company's Common Stock to Dr. Mackin, as
described in the table below, with an initial grant of 2,000,000 shares, as
reported in our current report on Form 8-k filed on January 7, 2005. The shares
granted on January 3, 2005, shares have not been registered with the SEC and
were granted in reliance on Section 4(2) of the Securities Act of 1933
- -------------------- ----------------------- ---------------------------
Grant Number of Shares Grant Date
- -------------------- ----------------------- ---------------------------
Grant One 2,000,000 January 3, 2005
- -------------------- ----------------------- ---------------------------
Grant Two 1,250,000 January 3, 2006
- -------------------- ----------------------- ---------------------------
Grant Three 1,250,000 January 3, 2007
- -------------------- ----------------------- ---------------------------
Grant Four 750,000 January 3, 2008
- -------------------- ----------------------- ---------------------------
Grant Five 750,000 January 3, 2009
- -------------------- ----------------------- ---------------------------
Grant Six 750,000 January 3, 2010
- -------------------- ----------------------- ---------------------------
The employment agreement contains a change in control provision that
provides for an acceleration of stock grants and cash salary to Dr. Mackin upon
a change in control resulting in the voluntary or involuntary termination of a
majority of the current board of directors or the current chief executive
officer. In the event of such a change in control, all pending stock grants will
immediately be granted and an amount equal to the lesser of three times his then
current cash salary or the cash salary owed through the end of the employment
agreement will be placed in an escrow account for distribution to Dr. Mackin.
The employment agreement provides that in the event that Dr. Mackin's
engagement with the Company is terminated by the Company without cause (as that
term is defined in Section 8 of the agreement), or by Dr. Mackin for "Good
Reason" (as that term is defined in Section 8(f) of the agreement, the Company
shall continue to provide Dr. Mackin's cash salary and provide health insurance
through the earlier of (a) the expiration of the agreement or (b) until Dr.
Mackin shall find equivalent full time employment. In the event that Dr.
Mackin's employment with the Company is terminated for any other reason, there
shall be no continuation of cash salary payments or health insurance.
The employment agreement provides a mechanism whereby the Company may,
at the Company's discretion, acquire all or a portion of the Common Stock
granted to Dr. Mackin, at a price of $0.01 per share, in the event that Dr.
Mackin's engagement with the Company is terminated prior to the registration, or
sale pursuant to Rule 144, of those shares.
-12-
EMPLOYMENT AGREEMENT WITH MR. PEREIRA
- -------------------------------------
The employment agreement for Mr. Pereira provides for a term of five
years, beginning December 1, 2004. Mr. Pereira's cash salary is set at $225,000,
not including shares of the Company's Common Stock granted pursuant to the
employment agreement, with a provision that such cash salary shall be increased
to $300,000 on January 15, 2005.
The employment agreement provides for a grant of 3,000,000 shares of
the Company's Common Stock to Mr. Pereira on the date of signing. As reported on
our current report on Form 8-K, filed on January 7, 2005, we granted 3,000,000
to Mr. Pereira on December 30, 2004. These shares have not been registered with
the SEC and were granted in reliance on Section 4(2) of the Securities Act of
1933.
The employment agreement contains a change in control provision that
provides for an acceleration of stock grants and cash salary to Mr. Pereira upon
a change in control resulting in the voluntary or involuntary termination of a
majority of the current board of directors or the current chief executive
officer. In the event of such a change in control, all pending stock grants will
immediately be vested and an amount equal to the lesser of three times his then
current cash salary or the cash salary owed through the end of the employment
agreement will be placed in an escrow account for distribution to Mr. Pereira.
The employment agreement provides that in the event that Mr. Pereira's
engagement with the Company is terminated by the Company without cause (as that
term is defined in Section 8 of the agreement), or by Mr. Pereira for "Good
Reason" (as that term is defined in Section 8(f) of the agreement, the Company
shall continue to provide Mr. Pereira shall find equivalent full time
employment. In the event that Mr. Pereira's employment with the Company is
terminated for any other reason, there shall be no continuation of cash salary
payments or health insurance.
The employment agreement provides a mechanism whereby the Company may,
at the Company's discretion, acquire all or a portion of the Common Stock
granted to Mr. Pereira, at a price of $0.01 per share, in the event that Mr.
Pereira engagement with the Company is terminated prior to the registration, or
sale pursuant to Rule 144, of those shares.
Agreement with Verdi Consulting
- -------------------------------
On January 3, 2005, the Company also entered in to a Consultant
Agreement with Verdi Consulting, Inc ("Verdi"). Chad Verdi, a shareholder of the
Company, is the sole shareholder of Verdi. For additional information regarding
Verdi and Chad Verdi, please refer to the section of the Prospectus entitled
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, TRANSACTIONS WITH CHAD VERDI".
The Consultant Agreement provides for a term of engagement of five
years beginning on January 1, 2004, to perform duties related to business
development and financing.
Under the terms of the agreement, Verdi is to receive payment of $300,000
per year, payable in equal monthly installments, as well as periodic grants of
the Company's Common Stock. The amount of the grants is calculated as a
percentage of the Company's outstanding securities and is described below:
- --------------------- -------------------------- -------------------------
Grant Stock Percentage Final Date
- --------------------- -------------------------- -------------------------
Grant One 2.5 April 1, 2004
- --------------------- -------------------------- -------------------------
Grant Two 1.00% July 1, 2004
- --------------------- -------------------------- -------------------------
Grant Three 1.00% Oct 1, 2004
- --------------------- -------------------------- -------------------------
Grant Four 2.5% January 3, 2005
- --------------------- -------------------------- -------------------------
Grant Five 0.5% July 1, 2005
- --------------------- -------------------------- -------------------------
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As reported on our current report on Form 8-K dated January 7, 2005,
the first grant, made on January 3, 2005, was for 3,584,322 shares. These shares
have not been registered with the SEC and were granted in reliance on Section
4(2) of the Securities Act of 1933. The result of this grant is that Chad Verdi
is the beneficial owner of 4,210,328 shares of our Common Stock, which is 5.06%
of our outstanding Common Stock.
The Consultant Agreement provides for an acceleration of stock grants
and payment to Verdi upon a change in control resulting in the voluntary or
involuntary termination of a majority of the current board of directors, the
current chief executive officer or the current president. In the event of such a
change in control, all pending stock grants will immediately be granted and an
amount equal to the lesser of three times its then annual payment or the
payments owed through the end of the Consultant Agreement will be placed into an
escrow account for distribution to Verdi. This agreement supplants a previous
Consultant agreement with Verdi dated May 12, 2004.
The consultant agreement provides that in the event that Verdi's
engagement with the Company is terminated by the Company without cause (as that
term is defined in Section 8 of the agreement), or by Verdi for "Good Reason"
(as that term is defined in Section 8(f) of the agreement, the Company shall
continue to provide Verdi's base payments and provide health insurance benefits
through the earlier of (a) three months from the date of termination or (b)
until Verdi shall find other full time employment. In the event that Asset
Growth Company's engagement with the Company is terminated for any other reason,
there shall be no continuation of cash salary payments or health insurance.
The Employment Agreements with Mr. Tarini, Mr. Ducey, Dr. Mackin and
Mr. Pereira have been filed as Exhibits 99.4, 99.5, 99.6 and 99.7 to our current
report on Form 8-k January 7, 2005.
The Strategic Operations Contractor Agreement and the Consultant
Agreement have been filed as Exhibits 99.8 and 99.9 respectively to our current
report Form 8-k January 7, 2005.
ASSIGNMENT OF SHARES BY GREENFIELD CAPITAL PARTNERS LLC TO SOUTHRIDGE PARTNERS
LP
- --------------------------------------------------------------------------------
We have been notified that on January 7, 2005, Greenfield Capital Partner LLC
("Greenfield"), a selling stockholder pursuant to the December 2, 2004
Registration Statement, assigned all right, title and interest in 750,000 shares
of our Common Stock (the "Assigned Shares"), to Southridge Partners LP
("Southridge"), also a selling stockholder pursuant to the December 2
Registration Statement.
Greenfield received the Assigned Shares pursuant to the exercise of a warrant
issued to Greenfield as compensation in connection with the Company's September
21, 2004 private placement. The Assigned Shares have been registered with the
SEC in the December 2 Registration Statement. After giving effect to this
assignment, Greenfield will no longer have any shares to be offered pursuant to
this Prospectus.
Supplement No. 4 is being filed to reflect the foregoing change in the number of
shares offered under this Prospectus by Greenfield and Southridge. The aggregate
number of shares offered and the dollar amount of the shares registered under
this Prospectus has not changed.
We have included a description of each of Greenfield's and Southridge's
relationship to Markland Technologies, Inc. and how each acquired the shares to
be sold in this offering in the Selling Stockholder Table and in the notes to
the Selling Stockholder Table in the December 2 Registration Statement. Other
than as may be stated in such registration statement or any supplement and/or
amendment, neither Greenfield or Southridge has had any material relationship
with us or our affiliates within the past three years.
A DESCRIPTION OF THE SEPTEMBER 21, 2004, PRIVATE PLACEMENT IS INCLUDED IN THE
PROSPECTUS. THE FORM OF WARRANT EXECUTED IN CONNECTION WITH THAT PRIVATE
PLACEMENT WAS FILED AS AN EXHIBIT TO OUR CURRENT REPORT ON FORM 8-K FILED ON
SEPTEMBER 23, 2004 (FILE NO. 000-28863). A complete description of the agreement
to amend the Greenfield Warrant is included in our Current Report on Form 8-K
filed on December 30, 2004 (file # 000-28863). THE AMENDMENT TO THE WARRANT IS
FILED AS AN EXHIBIT THERETO.
-14-
-------------------
Our common stock is quoted on the OTC Bulletin Board by the National
Association of Securities Dealers, Inc. under the symbol "MRKL.OB." On January
10, 2005, the last reported sale price of our common stock on the OTC Bulletin
Board was $0.835 per share.
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.
-------------------
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.
-------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE RISK FACTORS BEGINNING ON PAGE 5 AND ELSEWHERE IN THE PROSPECTUS.
-------------------
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.
--------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JANUARY 12, 2005
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