-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LatkbCQ1eA1WC2U/AwtWFivv2IYktgHxCMdEAnn6DQsoee7MxtyMtcOE7an51DQP mH/fpzIwbIknLAM9oDQh4g== 0000807397-99-000034.txt : 19991221 0000807397-99-000034.hdr.sgml : 19991221 ACCESSION NUMBER: 0000807397-99-000034 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19991220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARK SOLUTIONS INC CENTRAL INDEX KEY: 0000807397 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 112864481 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-93119 FILM NUMBER: 99777677 BUSINESS ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 BUSINESS PHONE: 9738930500 MAIL ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 FORMER COMPANY: FORMER CONFORMED NAME: SHOWCASE COSMETICS INC DATE OF NAME CHANGE: 19920703 S-3 1 FORM S-3, DECEMBER 1999 Registration No. 333 - SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REGISTRATION STATEMENT ON FORM S-3 UNDER THE SECURITIES ACT OF 1933 MARK SOLUTIONS, INC. --------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 11-2864481 ---------------------- ------------------------- (State of Incorporation) (IRS Employer Identification Number) 1515 Broad Street Parkway Technical Center Bloomfield, New Jersey 07003 (973) 893-0500 -------------- (Address, including Zip Code and Telephone Number of Registrant's Principal Executive Offices) Carl Coppola, President Mark Solutions, Inc. 1515 Broad Street Bloomfield, New Jersey 07003 (973) 893-0500 -------------- (Name, Address, including Zip Code, and Telephone Number of Agent for Service) A copy to: Timothy J. McCartney, Esq. 9 Elsa Way Richboro, Pennsylvania 18954 (215) 396-7156 Calculation of Registration Fee - -------------------------------------------------------------------------------- Title of Each Amount to be Proposed Proposed Amount of Class of Registered (1) Maximum Maximum Registration Securities to be Offering Price Aggregate Fee (1) Registered - -------------------------------------------------------------------------------- Common Stock, $.01 par value 1,062,500 $3.21875 $3,419,922 $1,128.58 - -------------------------------------------------------------------------------- (1) Also registered hereby pursuant to Rule 416 are such additional indeterminate shares of Common Stock or other securities as may become issuable by reason of stock splits or other adjustments pursuant to antidilution provisions. (2) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) based on the last sales price as reported on Nasdaq within the prior five days. [COVER PAGE 1 OF 2 PAGES] Approximate date of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or 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, check the following box: [XX] 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, please 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 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. [COVER PAGE 2 OF 2 PAGES] Prospectus MARK SOLUTIONS, INC. 1,062,500 Shares of Common Stock Mark Solutions, Inc. sells modular steel cells for correctional institution construction and develops software applications under the name "IntraScan II" for medical diagnostic, picture archiving and communication computer systems (PACS). This Prospectus relates to the sale of o Up to 350,000 shares of Mark Common Stock, $.01 par value, which may be issued upon the conversion of Series D Preferred Stock, $10.00 par value issued in October 1999 (See "Series D Preferred Stock") and the payment of dividends on the Series D Preferred Stock; o 562,500 shares of Common Stock issuable in connection with the previous conversion of debentures; and o 150,000 shares issued in connection with the settlement of litigation. This Prospectus is part of a registration statement filed with the Securities and Exchange Commission. Mark is obligated to keep the Registration Statement effective until November 1, 2001. All of the Shares may be sold by the person(s) listed in the Section "Selling Shareholders" or by their transferees from time to time in the open market or in privately negotiated transactions at prices acceptable to the seller. See "Plan of Distribution". Mark will receive no proceeds from the sale of the Shares. Mark is bearing all costs (except for commissions) related to the Registration Statement. THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. You should carefully consider the "Risk Factors" beginning on page 5 when determining whether to purchase any of the Shares. The Common Stock is traded on the Nasdaq SmallCap Market under the symbol "MSOL". On December 16, 1999, the closing sales price of the Common Stock was $3.21875 per share. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISSAPPROVED OF THESE SECURITIES OR PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------------------------- The date of this Prospectus is December **, 1999. You should only rely on the information contained or incorporated by reference in this Prospectus. No one has been authorized to provide you with additional or different information. The Shares are not being offered in any jurisdiction where an offer is not permitted. You should assume the information in this Prospectus or any supplement is accurate as of any date other than the date of the document. TABLE OF CONTENTS Page ---- Forward Looking Statements . . . . . . . . . . . . . . . 2 Summary . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Company . . . . . . . . . . . . . . . . . . . . 3 Risk Factors . . . . . . . . . . . . . . . . . . . . 4 Summary Selected Financial Data . . . . . . . . . . 4 Risk Factors . . . . . . . . . . . . . . . . . . . . . . 5 Series D Preferred Stock . . . . . . . . . . . . . . . . 10 Selling Shareholders . . . . . . . . . . . . . . . . . . 13 Plan of Distribution . . . . . . . . . . . . . . . . . . 14 Legal Matters . . . . . . . . . . . . . . . . . . . . . . 15 Experts . . . . . . . . . . . . . . . . . . . . . . . . . 15 Where You Can Find More Information . . . . . . . . . . . 16 FORWARD LOOKING STATEMENTS This Prospectus and the documents incorporated by reference in the Prospectus contain forward-looking statements within the of the Private Securities Litigation Reform Act of 1995. These statements are made on current plans and expectation of Mark and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include whether modular steel cell projects and PACS projects are awarded to Mark and the timing of project completion, meeting current an future financial requirements, competition and changes in PACS technology. You are cautioned not place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. 2 SUMMARY This Summary does not contain all the information provided by this Prospectus, some of which may be important to you. You should carefully read the entire Prospectus and incorporated documents before you decide to buy any Shares. THE COMPANY Mark designs, manufactures and installs modular steel cells for correctional institution construction and develops software application under the name "IntraScan II" for medical diagnostic, picture, archiving and communication computer systems (PACS). Mark markets its modular steel products through public bids and by pursuing joint ventures and affiliations with other companies to solicit design, build and/or operate correctional facilities projects both domestically and internationally. Management believes that nationwide emphasis on easing overcrowded conditions in correctional institutions presents a significant growth opportunity; however, there can be no assurance of sustained business. Mark's modular cells can be manufactured and installed more efficiently than traditional housing alternatives by virtue of lower labor and construction costs and shorter installation time. Mark markets its IntraScan PACS software to radiology departments, large healthcare facilities, hospitals and outpatient imaging group practices, primarily through a marketing agreement with Data General Corporation. Management believes that it can capitalize on the development of the domestic and international PACS market; however, there can be no assurance that significant business will develop. The IntraScan PACS software interfaces with medical imaging devices to store and recall images digitally from modalities including x-ray, CAT Scan, MRI, ultrasound, computed radiography and nuclear medicine. The IntraScan PACS software is "platform independent" allowing the software to operate with most computer hardware and operating systems. Mark is a Delaware corporation formed in 1986 under the name "Showcase Cosmetics, Inc.". Mark's principal executive offices are located at 1515 Broad Street, Bloomfield, New Jersey 07003 and its phone number is (973) 893-0500. 3 RISK FACTORS The securities of Mark involve a high degree of risk. Mark has historically had operating losses and related working capital deficiencies. To date, sales of its modular steel cells has been sporadic and sales of its IntraScan PACS system have been immaterial. See "Risk Factors" beginning on Page 5. SUMMARY SELECTED FINANCIAL DATA The following summary selected financial data is based upon financial information appearing elsewhere herein and such summary information should be read in conjunction with such financial statements and notes thereto. Income Statement Data: (in thousands, except share and per share data) Three Months Ended September 30 Fiscal Years Ended June 30 ------------------- -------------------------------- 1999 1998 1999 1998 1997 ------------------- -------------------------------- Revenues $3,997 $ 689 $10,226 $ 12,922 $ 6,450 Cost and Expenses 3,835 1,153 12,695 14,913 10,192 Operating Income (Loss) 163 (464) (2,469) (1,991) (3,742) Net Other(Expenses) (30) (38) (241) (397) (1,697) Income Tax Benefit --- --- 1,000 --- --- Net Income (Loss) 133 (502) (1,710) (2,388) (5,439) Earnings (Loss)Per Share $.02 ($.10) ($.36) ($.58) ($1.53) Fully Diluted Income (Loss) Per Share $.02 ($.10) ($.36) ($.58) ($1.53) Weighted Average Shares Outstanding 5,535,999 4,820,419 4,945,257 4,145,101 3,555,402 Weighted Average Fully Diluted Shares Outstanding 6,498,742 4,820,419 4,945,257 4,145,101 3,555,402 Balance Sheet Data: (in thousands, except share and per share data) Three Months Ended September 30 Fiscal Years Ended June 30 ------------------- -------------------------------- 1999 1999 1998 1997 ------------------- -------------------------------- Working Capital $ 1,464 $ 1,032 $ 3,077 $ 923 Total Assets 8,444 9,070 5,174 5,432 Current Liabilities 4,663 5,832 999 3,245 Other Liabilities 561 505 1,060 2,340 Temporary Stockholders Equity --- --- 1,220 --- Stockholders' Equity (Deficiency) 3,220 2,733 1,895 (153) 4 RISK FACTORS Before you make a decision to purchase any of the Shares, you should carefully read and consider the following risks. 1. Poor Financial Condition. Mark has significant operating losses and working capital and liquidity deficiencies over the past several years. Mark had net losses of $1,710,000 and $2,388,099 for the fiscal years ended June 30, 1999 and 1998. In addition, Mark had an accumulated deficit of $31,917,000 at June 30, 1999. Mark has and will continue to experience financial difficulties unless there is a significant increase in the sale of modular cells and/or IntraScan PACS systems. Based on past operating results there can be no assurance that Mark will be able to operate profitably. Mark's poor financial condition could adversely affect its ability to raise additional working capital pursuant to private sales of its securities. 2. Working Capital Requirements. Mark's ultimate success may depend upon its ability to raise additional working capital by selling equity securities or obtaining debt financing until its operating results improve. Mark has primarily met its working capital requirements through private placements of its securities. Management believes that its available working capital from existing contracts and from anticipated contracts will be utilized by June 30, 2000. If Mark needs additional working capital from sources other than its operations, it will most likely attempt to privately sell additional equity or debt securities. While Mark has been successful in raising working capital in the past, no assurance can be given that such sources will be available, or, if available, on terms satisfactory to Mark. 3. Limited Market and Contract Procedure for Modular Cells. The substantial majority of Mark's revenues have been from the sale of its modular steel cells to correctional institutions. Management believes that the steel cells will continue to represent the majority of Mark's operating revenues for the next two fiscal years. The correctional institution market presents substantial sales obstacles. Unless the project is very small, correctional institutions, as a government agency, must submit proposed projects to public bidding by prospective suppliers. The purchasing agency is obligated to select from among the bidders based on objective criteria as compared to private sector purchases which generally do not require bidding. This public bidding process does not give Mark the opportunity to convince the purchaser to deal with Mark to the exclusion of competitors. Mark currently has contracts for it modular cells aggregating approximately $11,000,000 in revenue for the period beginning July 1, 1999 to June 30, 2000. 5 4. Limited Sales of IntraScan PACS Software. For the three fiscal years ended June 30, 1999, Mark's IntraScan PACS software revenues totaled $2,103,000. While Mark believes the domestic and international market for PACS systems is significant and growing, there can be no assurance that Mark will establish a material market share and operate its IntraScan business profitably. 5. Bonding Qualifications. Many government construction projects require vendors like Mark to provide performance and completion bonds as a condition to participation in a correctional facility bid. Due to Mark's financial condition, it has generally been unable to obtain bonds without the assistance and guarantee of its president. Mark has not limited its bidding activity nor lost any projects due to its limited bonding capacity. However, as Mark is awarded multiple projects, the inability to obtain bonds may limit the number of additional projects Mark can pursue and have a material adverse effect on the operations of Mark. 6. Significant Contracts. For the fiscal year ended June 30, 1999, $7,127,500 (69.7%) of Mark's revenue was attributable to three modular steel cell projects. In addition, one of these projects is expected to represent $2,600,000 in revenue for fiscal 2000. 7. Competition. Mark competes in two industries which are highly competitive; government construction and computer software. Due to the use of concrete and other traditional construction methods in the substantial majority (approximately 90%) of correctional facilities construction, Mark competes for market share with a number of major national and regional construction companies in its efforts to convince the purchasing agency to utilize steel cell construction rather than traditional methods. With respect to those projects which incorporate modular steel cells in its design criteria, Mark competes against other regional metal fabricators, some of which have greater financial resources than Mark. In addition, other sheet metal manufacturers which have greater financial and marketing resources than Mark could enter the modular cell business. Accordingly, there can be no assurance that Mark will be able to successfully compete in the market for modular cells. With regard to the IntraScan PACS software, other companies, including several established film and medical equipment manufacturers, which are larger and better financed than Mark, offer PACS systems and the related software. As the PACS market develops, other large medical equipment, computer hardware or software companies could enter the PACS business. Accordingly, there can be no assurance that Mark will be able to successfully compete in the PACS market. 6 8. Rapid Technological Change in the Software Industry; Need for Continued Product Development. The application software industry is subject to rapid technological and industry standard changes that can quickly make existing products less desirable or obsolete. Consequently, Mark is required to continually develop, update and enhance its IntraScan II software applications to keep pace with industry changes and to respond to the changing needs of customers. These efforts require substantial capital investments. While Mark intends to allocate the necessary resources to the extent available, there can be no assurance that Mark will not experience difficulties in product development or that other companies will not develop software applications which will achieve greater acceptance in the PACS market. 9. Dependence on Key Person. Mark is dependent upon the continued services of Carl Coppola, its Chairman of the Board, President and Chief Executive Officer. The loss of Mr. Coppola could have a material adverse effect on Mark. Mark is the beneficiary of a term life insurance policy of $1,000,000 on the life of Mr. Coppola. 10. Nasdaq Listing Maintenance Requirements; Recent Trading Prices; Potential Application of Exchange Act "Penny Stock" Rules. Mark's Common Stock trades on the Nasdaq SmallCap Market. To be eligible for continued listing of its Common Stock, Mark is required to maintain, among other things: o a minimum bid price of $1.00 per share. o minimum net tangible assets of $2,000,000 or a market capitalization of $35 million. If Mark does not maintain its Nasdaq SmallCap Market listing, the liquidity of the Common Stock would be adversely affected. In addition, Mark's ability to raise additional working capital through sales of its equity securities would also be adversely affected. In response to the low trading price of its Common Stock, Mark effected a 1 for 4 reverse stock split in June 1999 to meet Nasdaq's minimum bid requirement. If Mark does not maintain its Nasdaq SmallCap Market listing, Mark's Common Stock would most likely be a "penny stock" as that term is defined in the Exchange Act. Brokers effecting transactions in a penny stock are subject to additional customer disclosure and record keeping obligations, including: o standardized risk disclosure document about the penny stock market prior to the transaction. o current bid and offer quotations for the penny stock. o the compensation of the broker and its salesperson for transactions in penny stocks. o monthly account statements showing the market value of each penny stock owned by the customer. 7 In addition, brokers effecting transactions in a penny stock are also subject to addition sales practice requirements under Rule 15g-9 of the Exchange Act including: o making an individualized written suitability determination of penny stock investments for each customer. o obtaining a prior written agreement for the specific penny stock purchase. Because of these additional obligations, certain brokers will not effect transactions in penny stocks, which could have an adverse effect on the liquidity of the security and make selling it more difficult. 11. Impact of Conversion Price of Preferred Stock and Debentures on the Trading Price of Common Stock. Mark currently has outstanding 20,000 shares of Series D Preferred Stock which are convertible into shares of Common Stock at the discounted rate of 70% of the market price. These discounted conversion rights may prevent rises in the trading price of the Common Stock due to the potential sale of the underlying Common Stock which would be acquired at below the then current trading price. In June 1998 a holder converted debentures in the principal amount of $750,000 provided Mark agree to issue additional shares of Common Stock to the extent the trading price falls below $1.25 on January 31, 2000. This adjustment provision may similarly affect the trading price of the Common Stock. Because of the discount to the current market price of the Common Stock, sales of the shares of Common Stock underlying the Preferred Stock may cause a downward trend in the trading price of the Common Stock until such shares are sold if the interest to buy the Common Stock by investors is weak. Based on the closing bid price of Mark's Common Stock on December 16, 1999 of $3.219, 651,266 shares of Common Stock are issuable on conversion of the outstanding Preferred Stock and as a result of the debenture adjustment. Because the conversion of the Preferred Stock is dependent on the price of the Common Stock at future dates, the actual number of shares of Common Stock which will be issued in undeterminable, and may exceed the assumed number given above. 12. Subcontractor Credit Risk. Mark's modular steel cells are only one component of correctional institution projects. Therefore, Mark may not be the prime contractor on a project, but a subcontractor. Under these circumstances, Mark usually will not have the direct financial obligation of the government agency or other purchaser, but will be primarily relying on the prime contractor regarding payment for its products. This presents a greater credit risk to Mark. 8 13. Related Party Transactions; Potential Conflicts of Interests. Mark has been a party to business transactions with certain officers, Directors or their affiliates. Mark intends to purchase goods and services in the ordinary course of business from related parties and may determine based upon circumstances at that time to engage in additional transactions with officers, Directors, principal shareholders or affiliates. While Mark believes these transactions have been on terms no less favorable than could be obtained from unaffiliated parties, such situations present potential conflicts of interest. 14. No Dividends. Mark has never paid a cash dividend on its Common Stock. Mark does not intend to pay in the foreseeable future, cash dividends on the Common Stock but intends to retain any earnings to finance growth. 15. Antitakeover Effects of Authorized and Unissued Preferred Stock. Mark's Board of Directors have the authority to issue up to 4,705,000 shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions including voting rights, of those shares without any further vote or action by Mark's shareholders. The rights of the holders of Common Stock will be subject to, and may be adversely affected by the rights of the holders of any preferred stock that may be issued. The issuance of preferred stock, while providing flexibility for possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of the outstanding voting stock of Mark. Mark has no present plans to issue additional shares of Preferred Stock. 9 SERIES D PREFERRED STOCK A portion of the Common Stock being offered under this Prospectus are issuable upon the conversion of 20,000 shares of Series D Preferred Stock purchased for $200,000 in a private placement. As of December 17, 1999, all of the Series D Preferred Stock remained issued and outstanding. The principal terms of the Series D Preferred Stock are: Conversion Rights. Each share of D Preferred Stock is convertible, at the option of the holder, into shares of Common Stock equal to $10.00 per share divided by 70% of the average per share closing bid price of the Common Stock for the five trading days immediately preceding the conversion date(s). Voting Rights. Except as otherwise required by law, the holders of D Preferred Stock have no voting rights. Dividends. Each share of Preferred Stock receives a quarterly dividend with an annual rate of $1.00 per share. The dividends of the Preferred Stock are payable in cash or Common Stock, at the option of Mark. Redemption Rights. Mark is not obligated to redeem the D Preferred Stock. In the event the D Preferred Stock is not converted into Common Stock, Mark may, at its option, redeem all or a portion of the D Preferred Stock at any time after September 30, 2000 at $10.00 per share plus accrued dividends. Liquidation Rights. In the event of any liquidation, the holders of the Preferred Stock will share equally in any balance of Mark's assets available for distribution to them up to $10.00 per share plus unpaid dividends, after satisfaction of creditors and the holders of Mark's senior securities, if any. Anti-dilution Provisions. The D Preferred Stock contains anti-dilution provisions in the event of stock dividends, stock splits, reverse stock splits and similar transactions. Restriction on Acquiring in Excess of Five (5%) of the Outstanding Common Stock. Each holder of the D Preferred Stock is prohibited from acquiring the beneficial ownership of over five (5%) percent of Mark's Common Stock through the conversion of the D Preferred Stock or otherwise. 10 Impact of Conversion Price of the Preferred Stock. The conversion price of the Preferred Stock is variable based on the current price of Mark's Common Stock at the time of conversion. Because of the discount to the current market price of the Common Stock, sales of the shares of Common Stock underlying the Preferred Stock may cause a downward trend in the trading price of the Common Stock until such shares are sold if the interest to buy the Common Stock by investors is weak. The Selling Shareholders are not prohibited from taking or maintaining a short position in the Common Stock. SELLING SHAREHOLDERS The up to 1,062,500 shares of Common Stock offered hereby are being offered for the account of the following person(s). The information regarding such person(s) and beneficial ownership of Common Stock has been provided by the Selling Shareholders. Shares of Shares of Shares Shares of Common Stock Common Stock of Common Common Stock Underlying D Beneficially Stock Beneficially Owned Name Preferred Stock Owned Offered After Offering - --------------- --------------------------------------------------------------- Frank Brosens 88,766 (1) 624,045(2) 651,266 61,545 Demien Construction Company 150,000 150,000 150,000 0 (1) Assumes dividends paid in cash. Based on a conversion rate of 70% of the closing sale price of $3.21875 on December 16, 1999. (2) Includes 562,500 shares of Common Stock issuable subject to owner being prohibited from beneficially owning in excess of five (5%) of Mark's Common Stock. 11 PLAN OF DISTRIBUTION The sale of shares of Common Stock by the Selling Shareholders may be effected from time to time in transactions on one or more exchanges or in the over-the-counter market, or otherwise in negotiated transactions, through the timing of options on the shares or through a combination of such methods of sale, at fixed prices, which may be charged at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Selling Shareholders may effect such transactions by selling the shares of Common Stock in an exchange distribution in accordance with the rules of such exchange to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of the shares of Common Stock for which such broker-dealer may act as agent or to whom they sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary compensation). The Selling Shareholders and any broker-dealers who act in connection with the sale of the shares of Common Stock hereunder may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, and any commissions received by them and profit on any sale of the shares of Common Stock as principal might be deemed to be underwriting discounts and commissions under the Securities Act. In addition any securities covered by the Prospectus which qualify may be sold under Rule 144 rather than pursuant to the Prospectus, as supplemented. From time to time the Selling Shareholders may engage in short sales, short sales against the box, puts and calls and other transactions in securities of Mark or derivatives thereof, and may sell and deliver the shares in connection therewith. From time to time Selling Shareholders may pledge their shares pursuant to the margin provisions of their respective customer agreements with their respective brokers. Upon a default by a Selling Shareholder, the broker may offer and sell the pledged shares of the Common Stock from time to time. 12 LEGAL MATTERS Timothy J. McCartney, Esq. has acted as counsel for Mark and has rendered an opinion on the validity of the shares of Common Stock to be sold pursuant to this Prospectus. EXPERTS Mark's consolidated balance sheet as of June 30, 1998 and 1999 and the consolidated statements of operations, stockholders' equity (deficiency) and cash flows for the years ended June 30, 1998 and 1999 incorporated into this Prospectus, have been included in reliance on the report of Holtz Rubenstein & Co., LLP, independent certified public accountants, given on the authority of that firm as experts in accounting and auditing. Mark's consolidated statement of operations, stockholders' equity and cash flows for the year ended June 30, 1997 incorporated into this Prospectus, have been included in reliance on the report of Sax Macy Fromm & Co., P.C., independent certified public accountants, given on the authority of that firm as experts in accounting and auditing. 13 WHERE YOU CAN FIND MORE INFORMATION Registration Statement and SEC Filing. This Prospectus is part of a Registration Statement filed with the SEC and omits certain information contained in that Registration Statement. Mark also files annual, quarterly, special reports and other information with the SEC. You may read and copy any document that Mark files at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for information on the operations of its Public Reference Rooms. In addition, the SEC maintains an Internet site (http:// www.sec.gov) where Mark's SEC filings are available free of charge. Mark's Web Site. Mark maintains its own Internet site (www.mark-solutions.com), which contains other information About Mark. Information Incorporated by Reference. Mark is permitted to incorporate by reference into this Prospectus information and reports that are filed with the SEC. The following documents filed by Mark (Commission File No. 0-17118) are incorporated and made a part of this Prospectus by reference: (1) Mark's Annual Report on Form 10-K for the year ended June 30, 1999. (2) Mark's definitive proxy statement for its Annual Shareholders Meeting to be held on December 17, 1999. Mark's Annual Report on Form 10-K for the year ended June 30, 1999. (3) Mark's Quarterly Report on Form 10-Q for the period ended September 30, 1999. Mark's Quarterly Report on Form 10-Q for the period ended September 30, 1999. (4) Mark's Current Report on Form 8-K for the event date of December 16, 1999. (5) The description of the Common Stock contained in the Registration Statement on Form S-1 (File No. 333-62513) declared effective on December 31, 1999. In addition, all documents subsequently filed by Mark under Section 13(a), 13(c), 14 or 15(d)of the Securities Exchange Act of 1934 and prior to the termination of the offering of Shares are deemed to be incorporated by reference into and made a part of this Prospectus from the date of filing. Information contained in these subsequent filings automatically modifies or supersedes previously filed information, including information contained in this Prospectus. You may obtain free copies of these filings. Requests for copies should be directed to Ms. Cheryl Gomes, Mark Solutions, Inc. 1515 Broad Street, Bloomfield, New Jersey 07003, Telephone Number (973) 893-0500. 14 PART II INFORMATION NOT REQUIRED IN FORM S-3 PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The following is a list of the estimated expenses to be incurred by the Registrant in connection with the issuance and distribution of the securities being registered hereby, other than underwriting discounts and commissions. Item Amount - ---- ------ Registration Fee . .. . . . . . . . . . . . . . . $ 1,128.58 Accountants' Fees and Expenses . . . . . . . . . 5,000.00 Blue Sky Filing Fees and Expenses . . . . . . . 3,000.00 Legal Fees and Expenses . . . . . . . . . . . . 15,000.00 Miscellaneous . . . . . . . . . . . . . . . . . 4,000.00 ---------- Total . . . . . . . . . . . . . . . . . . . . . . $28,128.58 ========== Item 15. Indemnification of Directors and Officers. Reference is made to Article Seven of the Certificate of Incorporation of the Registrant and Section 145 of the Delaware General Corporation Law. Article Seventh of the Certificate of Incorporation of the Registrant provides for indemnification to the full extent permitted by Delaware law of all persons whom it shall have the power to indemnify thereunder. Section 145 of the General Corporation Law of the State of Delaware ("GCL") contains provisions entitling directors and officers of the Registrant to indemnification from judgments, fines, amounts paid in settlement and reasonable expenses, including attorney's fees, as the result of being or having been a director or officer of the Registrant provided said officers or directors acted in good faith. GCL Section 145 provides broad powers of indemnification of directors and officers by their corporation. For example, the board of directors, the shareholders, or independent legal counsel in some circumstances may authorize the corporation to indemnify any officer or director again expenses (including attorneys' fees), judgments, fines and amounts paid in settlement, actually and reasonable incurred by him in connection with any "threatened, pending or completed action, suit or proceeding other than an action by or in the right of the corporation, whether civil, criminal, administrative or investigative- by reason of the fact that he is or was II-1 a director or officer of the corporation, if such director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. With respect to any threatened, pending or completed action or suit by or in the right of a Delaware corporation, the corporation may in like manner indemnify any officer or director against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such personal shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation, but only if and to the extent that the Court of Chancery or the court in which the action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Should a director or officer defend litigation arising out of his office and be successful on the merits or otherwise in defense of the action, GCL Section 145 provides that such officer or director shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Finally, a corporation organized under the GCL shall have power to purchase and maintain insurance on behalf of any director or officer against any liability asserted against him and incurred by him in such capacity or arising out of his status as an officer or a director, whether or not the corporation would have the power to indemnify him against such liability under the before described provisions of Section 145 of the GCL. Item 16. Exhibits. Exhibit Number Description ------ ------------------------------------------ 2. a)-- Stock purchase Agreement between Mark and Ian Baverstock, Jonathan Newth, David Payne and Joanna Tubbs dated April 5, 1996. (Incorporated by reference to Exhibit 1 to Mark's Form 8-K-Dated of Report May 28, 1996 referred to herein as "Mark's May 1996 Form 8-K") b)-- Stock Purchase Agreement between Mark and Christopher Cummins and Moria Addington dated April 24, 1996. (Incorporated by reference to Exhibit 2 to Mark's May 1996 Form 8-K) 3. a)-- Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3(i)1 to Mark's Form 10-Q for the period ended December 31, 1998 ) II-2 Exhibit Number Description ------ ----------------------------------------- b)-- Certificate of Designation of Series "D" Preferred Stock c)-- By-laws (Incorporated by reference to Exhibit 3 b) to Mark's Form 10-K for the fiscal year ended June 30, 1998) 4. a)-- Specimen Stock Certificate (Incorporated by reference to Exhibit 4 a) to Mark's Form 10-K for the fiscal year ended June 30, 1998) 5. Opinion of Timothy J. McCartney, Esq. 21. Subsidiaries of Mark (Incorporated by reference to Exhibit 21. to Mark's Form 10-K for the fiscal year ended June 30, 1998) 23. a) -- Consents of Holtz Rubenstein & Co., LLP, Sax Macy Fromm & Co., P.C., Chantrey Vellacott and Baker Tilly (included on pages II-7 to II-8) 23. b) -- Consent of Timothy J. McCartney, Esq. (included in Exhibit 5) 24. Power of Attorney (included on page II-5) Item 17. Undertakings. (A) Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons, if any, of the Registrant pursuant to the foregoing provisions, 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 any 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 of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 (B) With respect to the Common Stock, the undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10 (a) (3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total 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 the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee " Table in the effective registration statement; (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, the paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the information required to be included in a post-effective amendment by such paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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. (C) The undersigned registrant hereby undertakes that, for purposes of determining liability under the Securities Act, each of the registrant's annual reports pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and where applicable, each filing of an employee benefit's plan annual report pursuant to Section 15(d) of the exchange Act) that is incorporated by reference in the 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. II-4 (D) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnish pursuant to and meeting the requirements of Rule 14-a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, to cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly that is specifically incorporated by reference in the prospectus to provide such interim financial information. POWER OF ATTORNEY Mark Solutions, Inc., and each of the undersigned do hereby appoint Carl Coppola, its or their true and lawful attorney to execute on behalf of Mark Solutions, Inc. and the undersigned any and all amendments (including post-effective amendments) to this Registration Statement and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission. II-5 SIGNATURES Pursuant to 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 S-3 and that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Bloomfield, State of New Jersey, on December 17, 1999. MARK SOLUTIONS, INC. By: /s/ Carl Coppola ------------------------------------- (Carl Coppola, Chief Executive Officer and President) Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated. Signature Title Date - ----------------------- --------------------------------- ------------- /s/ Carl Coppola Chief Executive Officer, President December 17, 1999 - ---------------------- and Director (Principal Executive (Carl Coppola) Officer) /s/ Michael Nafash Chief Financial Officer, Vice December 17, 1999 - ---------------------- President- Finance and Director (Michael Nafash) (Principal Financial and Accounting Officer) /s/ Richard Branca Director December 17, 1999 - ---------------------- (Richard Branca) /s/ Yitz Grossman Director December 17, 1999 - ---------------------- (Yitz Grossman) /s/ Ronald E. Olszowy Director December 17, 1999 - ---------------------- (Ronald E. Olszowy) /s/ William Westerhoff Director December 17, 1999 - ---------------------- (William Westerhoff) II-6 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We hereby consent to the incorporation into this Registration Statement on Form S-3 of our report dated September 2, 1999 with respect to the consolidated financial statements of Mark Solutions, Inc. as of June 30, 1998 and 1999 and for the years ended included in its Annual Report on Form 10-K for the year ended June 30, 1999. We also consent to the reference to us under the heading "Experts" in the Prospectus which is part of the Registration Statement. HOLTZ RUBENSTEIN & CO., LLP Certified Public Accountants Melville, New York December 17, 1999 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We consent to the inclusion into this Registration Statement on Form S-3 of our report dated August 22, 1997 (except for Note 1, as to which date is September 23, 1997), on our audits of the consolidated statements of operations, shareholders equity (deficiency) and cash flows of Mark Solutions, Inc. ("Mark") for the year ended June 30, 1997. We also consent to the reference to us under the heading "Experts" in the Prospectus which is part of the Registration Statement. Sax Macy Fromm & Co., P.C. Certified Public Accountants Clifton, New Jersey December 17, 1999 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS II-7 We consent to the inclusion into this Registration Statement on Form S-3 of our report dated October 11, 1999, on our audits of the financial statements of MarkCare Medical Systems Limited as of June 30, 1998 and 1999 and for the years ended June 30, 1998 and 1999. Chantrey Vellacott Chartered Accountants Registered Auditors London, England December 17, 1999 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We consent to the inclusion into this Registration Statement on Form S-3 of our report dated September 25, 1997, on our audits of the financial statements of MarkCare Medical Systems Limited for the period ending 30 June 1997. Baker Tilly Chartered Accountants London, England December 17, 1999 II-8 EX-3.(I) 2 SERIES D CERTIFICATE OF DESIGNATION, NUMBER, POWERS, PREFERENCES AND OTHER RIGHTS AND QUALIFICATIONS, LIMITATIONS, RESTRICTIONS AND OTHER CHARACTERISTICS OF SERIES "D" PREFERRED STOCK OF MARK SOLUTIONS, INC. It is hereby certified that: 1. The name of the corporation is Mark Solutions, Inc. (hereinafter called the "corporation"). 2. The certificate of incorporation, as amended, of the corporation authorizes the issuance of 5,000,000 shares of Preferred Stock, $1.00 par value, and expressly vests in the Board of Directors of the corporation the authority provided therein to issue any or all of said shares in one or more series and by resolution or resolutions, the designation, number, full or limited voting powers, or the denial of voting powers, preferences and relative, participating, optional, and other special rights and the qualifications, limitations, restrictions, and other distinguishing characteristics of each series to be issued. 3. The Board of Directors of the corporation, pursuant to the authority expressly vested in it as aforesaid, has adopted the following resolutions creating a Series "D" issue of Preferred Stock: RESOLVED, that the Board of Directors hereby fixes and determines the designation of the number of shares and the rights, preferences, privileges and restrictions relating to the Series "D" Preferred Stock: (a) Designation. The series of Preferred Stock created hereby shall be designated the Series "D" Preferred Stock (the "Series D Preferred Stock"). (b) Authorized Shares. The number of shares of Series D Preferred Stock shall be 20,000 shares. (c) Liquidation Rights. In the event of any liquidation, dissolution or winding up of the corporation, either voluntary or involuntary, after setting apart or paying in full the preferential amounts due to holders of senior capital stock, if any, the holders of Series D Preferred Stock and parity capital stock, if any, shall be entitled to receive, prior and in preference to any distribution 1 of any of the assets or surplus funds of the corporation to the holders of junior capital stock, including Common Stock, an amount equal to $10.00 per share, plus accrued and unpaid dividends (the "Liquidation Preference"). If upon such liquidation, dissolution or winding up of the corporation, the assets of the corporation available for distribution to the holders of the Series D Preferred Stock and parity capital stock, if any, shall be insufficient to permit in full the payment of the Liquidation Preference, then all such assets of the corporation shall be distributed ratably among the holders of the Series D Preferred Stock and parity capital stock, if any. Neither the consolidation or merger of the corporation nor the sale, lease or transfer by the corporation of all or a part of its assets shall be deemed a liquidation, dissolution or winding up of the corporation for purposes of this Section (c). For purposes of this Section (c), the corporation's Series A and Series B Preferred Stock are deemed "senior capital stock". (d) Dividends. The holders of the then outstanding Series D Preferred Stock shall be entitled to receive a dividend, payable quarterly on the first day of each calendar quarter commencing January 1, 2000, which accrues from the date of issuance at an annual rate of $1.00 per share. The dividends shall be payable, at the option of the corporation, either in cash or in shares of Common Stock, which on the date of the dividend payment have a value equal to the dividend, provided that dividends may be paid in Common Stock only if such shares shall have been registered or are otherwise eligible for resale in compliance with the Securities Act of 1933. The value of each share of Common Stock for purposes of any dividend payment shall be equal to the average of the Closing Price [as defined in paragraph (e)(i)] on the last five Trading Days [as defined in paragraph (e)(i)] prior to the dividend payment date. "Common Stock" means shares now or hereafter authorized of the class of Common Stock, $.01 par value, of the corporation and stock of any other class into which such shares may hereafter have been reclassified or changed. (e) Conversion Rights. Each share of Series D Preferred Stock shall be convertible, at the option of the holder, into fully paid and nonassessable shares of the corporation's Common Stock equal to $10.00 per share divided by the Conversion Price (as defined in paragraph (e)(i)]. (i) Conversion Price. The Conversion Price means 70% of the average per share closing bid price of the Common Stock during the five Trading Days prior to such conversion. The "Closing Price" on any Trading Day shall mean the last reported bid price of the Common Stock as reported on The Nasdaq National Market or the Nasdaq SmallCap Market, as applicable, on such date or, if the Common Stock is neither so listed nor so reported, the last reported bid price of the Common Stock as quoted by a registered broker-dealer for which such quotes are 2 available on such date. A "Trading Day" means (a) a day on which the Common Stock is traded on The Nasdaq Stock Market or (b) if the Common Stock is not listed on The Nasdaq Stock Market or any stock exchange, a day on which the Common Stock is traded in the over-the-counter market, as reported by Nasdaq, or (c) if the Common Stock is not quoted on the Nasdaq Stock Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices). (ii) Conversion Procedure. The holder shall effect conversions by surrendering the certificate(s) representing the Series D Preferred Stock to be converted to the corporation, together a form of conversion notice satisfactory to the corporation, which shall be irrevocable. If the holder is converting less than all of the shares of Series D Preferred Stock represented by the certificate tendered, the corporation shall promptly deliver to the holder a new certificate representing the Series D Preferred Stock not converted. Not later than four (4) trading days after the conversion date, the corporation will deliver to the holder (i) a certificate or certificates, which shall be subject to restrictive legends and trading restrictions required by law, representing the number of shares of Common Stock being acquired upon the conversion; provided, however, that the corporation shall not be obligated to issue such certificates until the Series D Preferred Stock is delivered to the corporation. If the corporation does not deliver such certificate(s) by the date required under this paragraph (e)(ii), the holder shall be entitled by written notice to the corporation at any time on or before receipt of such certificate(s), to rescind such conversion. (iii) Adjustments on Stock Splits, Dividends and Distributions. If the corporation, at any time while any Series D Preferred Stock is outstanding, (a) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock payable in shares of its capital stock (whether payable in shares of its Common Stock or of capital stock of any class), (b) subdivide outstanding shares of Common Stock into a larger number of shares, (c) combine outstanding shares of Common Stock into a smaller number of shares, or (d) issue reclassification of shares of Common Stock any shares of capital stock of the corporation, the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock of the corporation outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this paragraph (e)(iii) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or 3 reclassification. Whenever the Conversion Price is adjusted pursuant to this paragraph, the corporation shall promptly mail to the Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. (iv) Adjustments on Reclassifications, Consolidations and Mergers. In case of reclassification of the Common Stock, any consolidation or merger of the corporation with or into another person, the sale or transfer of all or substantially all of the assets of the corporation or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, then each holder of Series D Preferred Stock then outstanding shall have the right thereafter to convert such Series D Preferred Stock only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification, consolidation, merger, sale, transfer or share exchange, and the Holder shall be entitled upon such event to receive such amount of securities or property as the shares of the Common Stock into which such Series Preferred Stock could have been converted immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange would have been entitled. The terms of any such consolidation, merger, sale, transfer or share exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this paragraph (e)(iv) upon any conversion following such consolidation, merger, sale, transfer or share exchange. This provision shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. (v) Fractional Shares; Issuance Expenses. Upon a conversion of Series D Preferred Stock, the corporation shall not be required to issue stock certificates representing fractions of shares of Common Stock, but shall issue that number of shares of Common Stock rounded to the nearest whole number. The issuance of certificates for shares of Common Stock on conversion of Series D Preferred Stock shall be made without charge to the Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder, and the corporation shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the corporation the amount of such tax or shall have established to the satisfaction of the corporation that such tax has been paid. (vi) Limitation on Conversion. Notwithstanding anything herein to the contrary, the holder shall not be entitled to convert the Series D Preferred 4 Stock to the extent that such conversion would result in the holder becoming the "beneficial owner" of five percent (5%) or more of the outstanding Common Stock as that term is defined in Section 13(d) of the Securities Exchange Act of 1934. The opinion of legal counsel to the holder, in form and substance satisfactory to the corporation and its counsel, shall prevail in all matters relating to the determination of holder's beneficial ownership. (f) Voting Rights. Except as otherwise expressly provided herein or as required by law, the holders of shares of Series D Preferred Stock shall not be entitled to vote on any matters considered and voted upon by the corporation's Common Stock. In the event the holders of the Series D Preferred Stock are entitled to vote on a matter as required by law, the holders shall be entitled to one vote per share of Series D Preferred Stock. Except as otherwise expressly provided herein or as required by law, the holders of the Series D Preferred Stock and the Common Stock shall vote together and not as separate classes. (g) Reservation of Shares of Common Stock. The corporation covenants that it will at all times reserve and keep available out of its authorized and unissued Common Stock solely for the purpose of issuance upon conversion of Series D Preferred Stock as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the holders of Series D Preferred Stock, such number of shares of Common Stock as shall be issuable upon the conversion of the aggregate principal amount of all outstanding Series D Preferred Stock. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all outstanding Series D Preferred Stock, the corporation will take such corporate action necessary to increase its authorized shares of Common Stock to such number as shall be sufficient for such purpose. The corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable. (h) No Reissuance of Series D Preferred Stock. No shares of the Series D Preferred Stock acquired by the corporation by reason of redemption, purchase, conversion or otherwise shall be reissued, and all such shares shall be cancelled, retired and eliminated from the shares of capital stock which the corporation shall be authorized to issue. (i) Redemption. The corporation shall not be obligated to redeem the Series D 5 Preferred Stock. In the event the Series D Preferred Stock is not converted into shares of Common Stock, the corporation, at its option may redeem all or a portion of the Series D Preferred Stock at any time after September 30, 2000 at a redemption price equal to $10.00 per share plus accrued dividends. and be it further RESOLVED, that the statements contained in the foregoing resolutions creating and designating the Series D Preferred Stock and fixing the number, voting powers, preferences and relative, participating, optional, and other special rights and the qualifications, limitations, restrictions, and other distinguishing characteristics thereof, upon the effective date of such series, be deemed to be included in and be a part of the certificate of incorporation of the corporation pursuant to the provisions of Section 104 and 151 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, the undersigned has executed this Certificate on October 27, 1999. /s/ Carl Coppola - ------------------------------ Carl Coppola, President 6 EX-5 3 LETTER FROM TIMOTHY MCCARTNEY, ESQUIRE Exhibit 5 TIMOTHY J. McCARTNEY* Attorney-at-Law 9 Elsa Way Richboro, Pennsylvania 18954 ------ Telephone (215) 396-7156 Facsimile (215) 396-7157 * Member of N.Y. Bar December 17, 1999 Mark Solutions, Inc. 1515 Broad Street Bloomfield, New Jersey 07003 Gentlemen: I have acted as counsel to Mark Solutions, Inc. ("Mark") in connection with the registration on Form S-3 (the "Registration Statement") by Mark under the Securities Act of 1933, as amended (the Securities Act") of 1,062,500 shares of Mark Common Stock, $.01 par value (the "Shares") and the related prospectus. On the basis of such investigation as I have deemed necessary, I am of the opinion that: The Shares (i)underlying the Preferred Stock, (ii) issuable in connection with previous debenture conversions and (iii) related to the litigation settlement have been duly authorized, reserved or issued by Mark and, upon such issuance will be duly authorized, validly issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to my name under the caption "Legal Matters" set forth in the prospectus. Very Truly Yours, Timothy J. McCartney -----END PRIVACY-ENHANCED MESSAGE-----