Registration No. 333-124274
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
AMENDMENT NO. 4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ION NETWORKS, INC.
(Name of Small Business Issuer in Its Charter)
DELAWARE 754813 22-2413505
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification
Number)
120 CORPORATE BLVD.,
SOUTH PLAINFIELD, NJ 07080
(908) 546-3900
(Address and Telephone Number of Principal Executive Offices and
Principal Place of Business)
NORMAN E. CORN
CHIEF EXECUTIVE OFFICER
120 CORPORATE BLVD.,
SOUTH PLAINFIELD, NJ 07080
(908) 546-3900
(Name, Address and Telephone Number of Agent For Service)
Copies to:
JAMES ALTERBAUM
MOSES & SINGER LLP
1301 AVENUE OF THE AMERICAS
NEW YORK, NY 10019
(212) 554-7800
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: from time to time after the
effective date of this Registration Statement.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
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
an 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 this registration statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This Amendment No. 4 on Form SB-2/A to ION Networks, Inc. (the "Company" or the
"Registrant") to Form SB-2 ("Original Filing") which was filed with the
Securities and Exchange Commission on April 22, 2005, and Amended on June 15,
2005, July 12, 2005 and August 1, 2005 is being filed to amend the Original
Filing as follows:
-- Item 27 Exhibits, is amended to reflect the refilling of the legal
opinion of Moses & Singer LLP (Exhibit 5) to cover an additional
1,781,582 shares of common stock being registered here by.
Except for the amendment described above, this Form SB-2/A does not modify or
update other disclosures in, or exhibits to, the Original Filing as previously
amended.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The only statute, charter provision, by-law, contract, or other arrangement
under which any controlling person, director or officers of ION is insured or
indemnified in any manner against any liability which he may incur in his
capacity as such, is as follows:
Our certificate of incorporation limits the liability of our directors and
officers to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except liability for:
(i) breach of the directors' duty of loyalty; (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the law,
(iii) the unlawful payment of a dividend or unlawful stock purchase or
redemption, and (iv) any transaction from which the director derives an improper
personal benefit. Our certificate of incorporation also requires us to indemnify
our directors and officers to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware.
The effect of the foregoing is to require us to indemnify our officers and
directors for any claim arising against such persons in their official
capacities if such person acted in good faith and in a manner that he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
Insofar as indemnification for liabilities may be permitted to our directors,
officers and controlling persons pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy and is,
therefore, unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses of this offering in connection with the issuance and
distribution of the securities being registered, all of which are to be paid by
the Registrant, are as follows (all of such expenses, other than the SEC
registration fee are estimated):
Registration Fee $ 272
Legal Fees and Expenses 19,000
Accounting Fees and Expenses 15,000
Miscellaneous Expenses 1,000
---------------
Total $ 35,272
===============
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On March 31, 2005, ION Networks, Inc. ("ION") entered into a purchase agreement
with various accredited investors ("Investors"), pursuant to which Ion completed
a private placement of 4,411,764 shares of common stock and warrants to purchase
an additional 2,205,882 shares of common stock. Certain of the Investors
beneficially owned approximately 11% of Ion common stock prior to the
transaction. The total offering price was $750,000. The shares of common stock
were issued at $0.17 cents per share and the warrants are exercisable at a price
of $0.23 per share subject to certain anti-dilution adjustments. The warrants
will expire on March 31, 2010. In the event that the closing bid price of the
Company's common stock equals or exceeds $0.69 per share for a period of 20
consecutive trading days and certain other conditions are met, the Company may
redeem the warrants on 30 days prior written notice (during which periods the
warrants may be exercised) for a redemption price of $.001 per share of common
stock underlying such warrants. ION also agreed to file a registration
statement, registering for resale the shares of common stock as well as the
shares issued upon exercise of the warrants, within 45 days from March 31, 2005,
and thereafter to use commercially reasonably efforts to cause such registration
statement to become effective as soon as practicable. The registration statement
must be declared effective no later than the earlier of five business days after
the SEC determines that no review of the registration statement will be made and
120 days after March 31, 2005. If ION Networks, Inc. fail to meet these
registration obligations or to maintain the effectiveness of the registration
statement as required under the terms of the Agreements, then ION Networks, Inc.
will be obligated to make certain cash liquidated damage payments to the
Investors.
The securities in this private placement were issued without registration in
reliance on Section 4(2) of the Securities Act of 1933, as amended ("1933 Act"),
as amended, and Rule 506 promulgated thereunder. The exemption was established
by the representation of each purchaser as to its status as an accredited
investor, that it was purchasing the securities for its own account and not with
a view to the resale or distribution of any part thereof in violation of the
1933 Act and the acknowledgment by each purchaser that resale of the securities
may not be made unless registered under the 1933 Act, or another exemption is
available. In addition, the securities bear a legend indicating such
restrictions on transferability.
On August 5, 2004, the Company issued, for $200,000 cash, a convertible
debenture (the "Debenture") to Stephen M. Deixler, one of the Company's
directors. The Debenture matures on August 5, 2008 and bears interest at five
(5%) percent per annum, compounded annually. The principal amount of the
Debenture is convertible into shares of the Company's common stock, $.001 par
value at a conversion price equal to $0.083 per share (the "Conversion Price"),
which is equal to the ten (10) day average of the closing prices of the
Company's common stock, as quoted on the OTC Bulletin Board during the five (5)
trading days immediately prior to and subsequent to August 5, 2004. The
principal amount of the Debenture is convertible at the Conversion Price at the
option of the holder, or after August 5, 2005 at the Company's option if the
Company's common stock trades at a price of at least $0.166 for twelve (12)
trading days in any fifteen (15) trading day period. The Company is also
entitled to prepay the principal amount of the Debenture, at any time after
August 5, 2005, but shall be required to pay a premium of two (2%) percent in
the second year after issuance of the Debenture of the principal amount prepaid,
for prepayments made during that period. The Company has granted certain
"piggyback" registration rights to the holder to register for resale the shares
issuable upon conversion of the Debenture. In 2004, the Company recorded $4,167
of related party interest expense as part of the statement of operations. The
securities in this private placement were issued without registration in
reliance on Section 4(2) of the Securities Act of 1933, as amended ("1933 Act"),
as amended, and Rule 506 promulgated thereunder. The exemption was established
by the representation of the purchaser as to his status as an accredited
investor, that it was purchasing the securities for his own account and not with
a view to the resale or distribution of any part thereof in violation of the
1933 Act and the acknowledgment by the purchaser that resale of the securities
may not be made unless registered under the 1933 Act, or another exemption is
available. In addition, the securities bear a legend indicating such
restrictions on transferability.
In January 2004, the Company issued options to certain officers to purchase
1,000,000 shares of the Company's Common Stock, which vested immediately. The
exercise price of the options ranged from $0.045 to $0.06. At December 31, 2004,
750,000 options were outstanding and exercisable. The securities in this private
placement were issued without registration in reliance on Section 4(2) of the
Securities Act of 1933, as amended ("1933 Act"), as amended, and Rule 506
promulgated thereunder, based on the fact that the options were issued to two
executive officers of the Company for their own account and not with a view to
the resale or distribution of any part thereof in violation of the 1933 Act and
the acknowledgment by the purchaser that resale of the securities may not be
made unless registered under the 1933 Act, or another exemption is available.
On September 13, 2002 the Company issued 166,835 Series A Preferred Stock to
certain officers and directors of the Company for a total purchase price of
$300,363. Each share of Series A Preferred Stock is convertible into ten shares
of common stock and has a liquidation preference of $1.80. The securities in
this private placement were issued without registration in reliance on Section
4(2) of the Securities Act of 1933, as amended ("1933 Act"), as amended, and
Rule 506 promulgated thereunder. The exemption was established by the
representation of each purchaser as to its status as an accredited investor,
that it was purchasing the securities for its own account and not with a view to
the resale or distribution of any part thereof in violation of the 1933 Act and
the acknowledgment by each purchaser that resale of the securities may not be
made unless registered under the 1933 Act, or another exemption is available. In
addition, the securities bear a legend indicating such restrictions on
transferability.
ITEM 27. EXHIBITS.
Exhibit
No. Description
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3.1 (i)Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware on August 5,
1998./(2)/
(ii)Certificate of Amendment of the Certificate of Incorporation,
as filed with the Secretary of State of the State of Delaware on
December 11, 1998./(2)/
(iii)Certificate of Amendment of the Certificate of
Incorporation, as filed with the Secretary of state of the State
of Delaware an October 12, 1999./(3)/
(iv)Amended and Restated Certificate of Designation of Rights
Preferences, Privileges and Restrictions of Series A Preferred
Stock of ION Networks, Inc. /15/
3.2 By-Laws of the Company./(19)/
3.3 Form of Specimen Common Stock Certificate of the
Company./(4)/
4.1 1994 Stock Option Plan of the Company. /(1)/
4.2 1998 Stock Option Plan of the Company./(2)/
4.3 1998 U.K. Sub-Plan of the Company, as amended./(2)/
4.4 2000 Stock Option Plan of the Company./(12)/
4.5 Form of Warrant Agreement dated July 17, 2001./(11)/
4.6 Form of Warrant Agreement dated February 14, 2002./(11)/
4.7 Convertible Debenture dated August 5, 2004./19/
4.8 Form of Warrant Agreement dated March 31, 2005. /(22)/
5.0 Opinion of Moses & Singer LLP. *
10.3 Agreement dated as of December 19, 1994 by and between LeeMAH
DataCom Security Corporation and Siemens Rolm Communications
Inc./(4)/
10.4 Equipment Lease Agreements dated October 29, 2003 by and between
the Company and GE Capital Corporation. /(21)/
10.5 (i)Non-negotiable Promissory Note in the principal amount of
$750,000 issued by Stephen B. Gray to the Company./(5)/
Exhibit
No. Description
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(ii)First Amendment to Promissory Note dated as of August 5, 2000
by and between the Company and Stephen B. Gray./(5)/
10.6 (i) Separation and Forbearance Agreement made as of October 5,
2000 between the Company and Stephen B. Gray./(6)/
(ii)Promissory Note in the amount of $163,000 dated October 5,
2000 made by Stephen B. Gray to the Company./(6)/
10.7 Materials and Services Contract dated January 16, 2001, between
the Company and SBC Services, Inc./(7)/
10.8 Stock Purchase Agreement dated August 11, 2000 by and between the
Company and the parties identified therein./(7)/
10.9 Purchase Agreement by and between the Company and the Selling
Shareholders set forth therein dated February 7, 2002./(13)/
10.10 Employment Agreement dated October 4, 2001 between the Company
and Kam Saifi./(9)/+
10.11 Employment Agreement dated October 17, 2001 between the Company
and Cameron Saifi./(10)/+
10.12 Employment Agreement dated February 25, 2002, between the Company
and William Whitney./15/+
10.13 Amended and Restated Employment Agreement dated August 15, 2003,
between the Company and Norman E. Corn./16/
10.14 Employment Agreement dated September 15, 2003, between the
Company and Patrick E. Delaney./14/
10.15 Lease Agreement dated July 21, 2003 by and between the Company
and 116 Corporate Boulevard, LLC, Inc. /(17)/
10.16 Separation Agreement dated March 29, 2004 between the Company and
Kam Saifi. /(21)/
10.17 Separation Agreement dated October 14, 2004 between the Company
and Cameron Saifi. /(21)/
10.18 First Amendment to the Amended and Restated Employment Agreement
dated September 8, 2003 by and between the Company and Norman E.
Corn dated November 10, 2004 /(21)/
10.19 First Amendment to the Employment Agreement dated September 15,
2003 by and between the Company and Patrick E. Delaney dated
November 10, 2004. /(21)/
10.20 Employment Agreement dated August 31, 2004 by and between the
Company and Henry A. Hill. /20/
10.21 Severance Agreement dated September 2, 2004 by and between the
Company and William Whitney. /(21)/
Exhibit
No. Description
------- -----------
10.22 Severance Agreement dated September 2, 2004 by and between the
Company and Henry Gold. /(21)/
10.23 Option Agreement dated January 28, 2004 by and between the
Company and Norman E. Corn. /(21)/
10.24 Option Agreement dated January 28, 2004 by and between the
Company and Patrick E. Delaney. /(21)/
10.25 Agreement dated February 25, 2005 by and between the Company and
Sprint/Untied Management Company. /(21)/
10.26 Agreement dated October 28, 2004 by and between the Company and
General Dynamics Network Systems. /(21)/
10.27 Purchase Agreement dated March 31, 2005 by and between the
Company And the selling stockholders identified therein. /(22)/
10.28 Registration Rights Agreement dated March 31,2005, by and between
the Company and the Selling Shareholders identified therein.
/(22)/
16.1 Letter dated October 31,2003, from Deloitte & Touche, LLP. To the
Securities and Exchange Commission./(8)/
21.1 List of Subsidiaries. /(21)/
23.1 Independent Registered Public Accounting Firm's Consent./(24)/
23.2 Consent of Moses & Singer LLP (incorporated by reference to
Opinion Of Moses & Singer filed as Exhibit 5).
24 Power of Attorney./(23)/
(1) Incorporated by reference to the Company's Registration Statement on Form
S-8 filed on August 15, 1995.
(2) Incorporated by reference to the Company's Registration Statement on Form
S-8 filed on April 22, 1999.
(3) Incorporated by reference to the Company's Registration Statement on Form
S-8 filed on March 17, 2000.
(4) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1999.
(5) Incorporated by reference to the Company's Annual Report on Form 10-KSB
filed on June 28, 2000.
(6) Incorporated by reference to the Company's Quarterly report on Form 10-QSB
filed on November 14, 2000
(7) Incorporated by reference to the Company's Annual report on Form 10-KSB
filed on June 29, 2001.
(8) Incorporated by reference to the Company's Annual report on Form 8-KSB filed
on October 31, 2003.
(9) Incorporated by reference to the Company's Current Report on Form 8-K filed
on October 23, 2001.
(10) Incorporated by reference to the Company's Current Report on Form 8-K filed
on October 24, 2001.
(11) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 2002, as filed on July 1, 2002.
(12) Incorporated by reference to the Company's Registration Statement on Form
S-8 filed on January 11, 2002.
(13) Incorporated by reference to the Company's Registration Statement on Form
S-3 filed on March 4, 2002.
(14) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
filed on November 17, 2003.
(15) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2002, as filed on April 15, 2003.
(16) Incorporated by reference to the Company's Quarterly Report on Form 10QSB
filed on September 12, 2003.
(17) Incorporated by reference to the Company's Annual Report on Form 10-KSB
filed for the year ended December 31, 2003.
(18) Incorporated by reference to the Company's Annual Report on Form 10-KSB/A,
Amendment No.2, for the fiscal year ended March 31, 2002, as filed on August 2,
2002.
(19) Incorporated by reference to the Company's Quarterly Report on Form 10QSB
filed on August 13, 2004.
(20) Incorporated by reference to the Company's Quarterly Report on Form 10QSB
filed on November 15, 2004
(21) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2004.
(22) Incorporated by reference to the Company's Current Report on Form 8-K filed
on April 5, 2005.
(23) Incorporated by reference to the Company's Registration Statement on Form
SB-2 filed on April 22, 2005.
(24) Incorporated by reference to the Company's Registration Statement on Form
SB-2 Amendment No. 3 filed on August 1, 2005.
* Filed herewith
ITEM 28. 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, as amended (the "Securities Act").
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of a prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the change in volume and
price represents no more than a 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 additional or changed material information with
respect to the plan of distribution.
(2) that, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at the 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) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions of its Certificate of Incorporation, By-Laws, the
Delaware General Corporation Law 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 Securities Act and
is, therefore, unenforceable. In 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 of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Amendment No. 4
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in South Plainfield, New Jersey, on the 8th day of
August, 2005.
ION NETWORKS, INC,
By: /s/ Norman E. Corn
-------------------------------------------
Norman E. Corn
CEO
Pursuant to the requirements of the Securities Act of 1933, registration
statement has been signed below by or on behalf of the following persons in the
capacities date indicated.
SIGNATURE TITLE
By: /s/ Norman E. Corn* Chairman of the Board and August 8, 2005
------------------------ Director
Stephen Deixler
By: /s/ Norman E. Corn Chief Executive Officer August 8, 2005
------------------------
Norman E. Corn
By: /s/ Patrick E. Delaney Chief Financial Officer and August 8, 2005
------------------------ Principal Accounting Officer
Patrick E. Delaney
By: /s/ Norman E. Corn* Director August 8, 2005
------------------------
Frank S. Russo
By: /s/ Norman E. Corn* Director August 8, 2005
------------------------
Harry F. Immerman
* As attorney-in-fact