<PAGE> 1
As filed with the Securities and Exchange Commission on May 4, 1999
Registration Statement No. 333-71381
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-3
FLEXIINTERNATIONAL SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 06-1309427
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
TWO ENTERPRISE DRIVE, SHELTON, CONNECTICUT 06484, (203) 925-3040
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
STEFAN R. BOTHE
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
FLEXIINTERNATIONAL SOFTWARE, INC.
TWO ENTERPRISE DRIVE, SHELTON, CONNECTICUT 06484, (203) 925-3040
(Name, address, including zip code, and telephone number, including area code,
of Agent for Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY 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),
SHALL DETERMINE.
================================================================================
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THE PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
----------
FLEXIINTERNATIONAL SOFTWARE, INC.
2,771,174 SHARES OF COMMON STOCK
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FlexiInternational Software, Inc. previously issued 863,494 shares of
common stock to former stockholders of The Dodge Group, Inc. in connection with
the acquisition of that company. This prospectus relates to resales of those
shares and 1,907,680 shares of common stock held by one other stockholder that
bought its shares in a previous financing. We will not receive any proceeds from
the sale of these shares. The selling stockholders are listed on page 12.
Our common stock is traded on the Nasdaq National Market under the symbol
FLXI. On April 23, 1999, the closing sale price of our common stock on Nasdaq
was $1.22 per share.
THE SECURITIES OFFERED INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.
- --------------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this prospectus is May 4, 1999.
<PAGE> 3
TABLE OF CONTENTS
PAGE
Summary of Our Business..................................................... 4
Risk Factors................................................................ 4
How to Get More Information................................................. 9
Incorporation of Documents By Reference..................................... 10
Special Note Regarding Forward-Looking Information.......................... 10
Use of Proceeds............................................................. 11
Selling Stockholders........................................................ 12
Plan of Distribution........................................................ 13
Legal Matters............................................................... 14
Experts..................................................................... 14
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<PAGE> 4
SUMMARY OF OUR BUSINESS
We design, develop, market and support the Flexi family of financial
application software and related applications and tools. The Flexi solution --
Flexi Financials, FlexiInfoAccess and FlexiTools -- is designed to address the
needs of users with sophisticated financial accounting requirements. We believe
our products provide significant advantages over traditional financial
accounting software. The Flexi solution:
* is designed to support new technologies as they develop, including the
Internet and corporate intranets,
* can be modified quickly and efficiently by users to create tailored
business solutions, and
* can seamlessly integrate with new applications to support evolving
business processes.
We believe our solution is particularly well-suited for adoption by users
with sophisticated financial accounting requirements, and we target our sales
and marketing efforts at these users. Our goal is to establish
FlexiInternational as a global leader in the financial accounting software
market. Key elements of our business strategy include:
* extending our technological leadership by continuing to invest in
research and development to strengthen the Flexi financial accounting
solution
* continuing to target the solution to users with sophisticated
financial accounting requirements
* delivering a reduced overall cost of ownership of financial accounting
systems to current and prospective customers
* leveraging strategic relationships, including our relationship with
Microsoft Corporation
* expanding our sales and distribution capabilities both in the U.S. and
internationally
Our executive offices are located at Two Enterprise Drive, Shelton,
Connecticut 06484, and our telephone number is (203) 925-3040. FlexiFinancials,
FlexiLedger, FlexiPayables and FlexiReceivables are registered trademarks of
FlexiInternational. The Flexilogo, FlexiAnalysis, FlexiAssets, FlexiDB,
FlexiDesigner, FlexiDeveloper, FlexiInfoCenter, FlexiInfoSuite,
FlexiInternational, FlexiInventory, FlexiObjects, FlexiOrders, FlexiPurchasing,
FlexiSecure, FlexiTools and FlexiWorks are trademarks of FlexiInternational. Any
other trademarks or trade names referred to in this prospectus are the property
of their respective owners.
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. These are risks and uncertainties presently known to us
that we currently deem material.
THERE IS A RELATIVELY SHORT OPERATING HISTORY ON WHICH INVESTORS MAY BASE
AN EVALUATION OF OUR FUTURE PROSPECTS
FlexiInternational began operations in 1991 and released its first products
in 1993. Most of our revenues so far have come from sales of our financial
accounting software products and the provision of related consulting, training
and software installation services. We expect our FlexiFinancials,
FlexiInfoSuite and FlexiTools financial accounting products to provide the
principal source of sales revenues for the foreseeable future. All these
products have a limited history of customer acceptance and use. Accordingly,
potential investors have a limited operating history with which to evaluate
FlexiInternational and its prospects.
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WE HAVE AN ACCUMULATED DEFICIT AND HAVE INCURRED NET LOSSES FOR RECENT
PERIODS
FlexiInternational had an accumulated deficit of $34.6 million at December
31, 1998 and incurred net losses of $2.6 million and $12.1 million during 1997
and 1998, respectively. To date, FlexiInternational has been profitable only
during the last two quarters of 1997, and the first two quarters of 1998,
excluding the one-time charge for in-process research and development in the
second quarter of 1998. We cannot assure you that FlexiInternational will regain
its profitability on a quarterly basis.
OUR REVENUES AND OPERATING RESULTS ARE LIKELY TO VARY SUBSTANTIALLY FROM QUARTER
TO QUARTER AND MAY RESULT IN UNANTICIPATED DECREASES IN OUR STOCK PRICE
Our revenues and quarterly operating results have varied substantially from
quarter to quarter, are difficult to forecast and may continue to fluctuate due
to a number of factors. Those factors include:
* the relatively long sales cycle for our products, typically ranging
between three and nine months
* the market acceptance of our new services or products and those of our
competitors
* product and price competition
* the mix of our revenues derived from license fees, services and
third-party channels
* changes in our operating and personnel-related expenses
* foreign currency exchange rates
The first of these factors, the timing, size and nature of individual
licensing transactions, is a particularly important one in our quarterly results
of operations. Many of these transactions involve large dollar amounts, and the
sales cycles for them are often lengthy and unpredictable. We recognize license
revenues upon installation of our software, and delays in the installation of
our software could materially adversely affect our quarterly results of
operations. In addition, because we derive a significant proportion of total
revenues from license revenues, we may realize a disproportionate amount of our
revenues and income in the last month of each quarter. This can cause the
magnitude of quarterly fluctuations to not be evident until late in, or at the
end of, a given quarter. Accordingly, delays in product delivery and
installation or in the closing of sales near the end of a quarter could cause
quarterly revenues and, to a greater degree, results of operations to fall
substantially short of anticipated levels.
In addition, our expense levels are based, in significant part, on
expectations as to future revenues and are largely fixed in the short term. As a
result, we may not be able to adjust spending in a timely manner to compensate
for any unexpected shortfall in revenues. If our results of operations for any
quarter fall short of expectations for any of these reasons, our stock price
and the value of your shares may materially decrease.
OUR REVENUES ARE SUBJECT TO SEASONAL FLUCTUATIONS
Our revenues have historically increased at higher rates in the fourth
quarter of the year and at lower rates in the next succeeding quarter, which we
believe is due to our quota-based compensation arrangements and year-end
budgetary pressures on our customers. We believe that this seasonal trend may
continue for the foreseeable future. In addition, in the second half of 1998, we
experienced a general slow down of business due primarily to delays in potential
customers' buying decisions, as they began to prepare for the new millennium. We
believe that 1998's seasonal trends may continue in 1999, as buying patterns and
decisions change given the impact of the year 2000, and its effects on
customers' ability to make commitments to new software products with limited
internal resources focused on year 2000 issues. For all these reasons, we
believe that period-to-period comparisons of our results of operations are not
necessarily meaningful and should not be relied on as indicators of future
performance.
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A SIGNIFICANT NUMBER OF OUR MANAGEMENT AND MARKETING PERSONNEL HAVE BEEN WITH
FLEXIINTERNATIONAL FOR LESS THAN A YEAR
All but one member of our senior management team and more than half of our
sales and marketing professionals have been with us for less than a year. These
individuals have not previously worked together and are only now become
integrated into the company. If the members of senior management or our
marketing professionals cannot rapidly begin performing effectively as a
management team, our ability to successfully manage our business and generate
growth will be adversely affected.
OUR SENIOR MANAGEMENT HAS HAD LIMITED EXPERIENCE IN MANAGING PUBLICLY TRADED
COMPANIES
FlexiInternational has only been a publicly traded company since December
1997. In addition, few of our senior management team have any other prior
experience in managing publicly traded companies.
WE DEPEND ON A LIMITED NUMBER OF KEY PERSONNEL, THE LOSS OF ANY OF WHICH MAY
ADVERSELY AFFECT OUR BUSINESS
Our performance depends substantially on the performance of our executive
officers, sales force, project managers and senior technical personnel. We do
not have employment contracts with any of our key personnel. The loss of the
services of any of our executive officers or other key employees could have a
material adverse effect on our business, financial condition and results of
operations.
WE RELY ON A RELATIVELY SMALL NUMBER OF PRODUCTS FOR OUR REVENUES
To date, substantially all of our revenues have been attributable to sales
of our FlexiFinancials, FlexiInfoAccess and FlexiTools financial accounting
products and related consulting, training and software installation services. We
expect to rely on these activities for a substantial portion of our revenues in
the foreseeable future. Factors adversely affecting the pricing or demand for
any one of these products or services, such as competition or technological
change, could have a material adverse effect on our business, financial
condition and results of operations.
HISTORICALLY, A LIMITED NUMBER OF CUSTOMERS HAVE ACCOUNTED FOR A SIGNIFICANT
PERCENTAGE OF OUR REVENUES IN EACH YEAR
During the years ended December 31, 1998, 1997 and 1996, two customers, two
customers and one customer, respectively, each represented 10% or more of our
total revenues (or an aggregate of 29.8%, 40.2% and 12.3% of total revenues,
respectively). Although our largest customers have varied from period to period,
we anticipate that our results of operations in any given period will continue
to depend to a significant extent upon revenues from a small number of
customers. Our failure to enter into one or more of these significant contracts
during a particular period could have a material adverse effect on our business,
financial condition and results of operations.
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INTERRUPTIONS IN THE AVAILABILITY OF THIRD-PARTY TECHNOLOGY COULD ADVERSELY
AFFECT OUR BUSINESS
Our proprietary software is currently designed, and may in the future be
designed, to work on or in conjunction with third-party hardware and/or software
products. If any of these current or third-party vendors limits the availability
of their products to us or to licensees of our software, or materially increases
the cost of acquiring, licensing or purchasing the third-party vendors'
products, or if a material problem arises in the compatibility of our software
with any of the third-party products, we may be required to identify additional
sources for those products. If so, interruptions in the availability or
functioning of our software and delays in the introduction of new products and
services may occur until equivalent technology is obtained.
WE RELY ON THIRD-PARTY SALES CHANNELS IN COMPLETING A SIGNIFICANT PORTION OF
OUR SALES
We address some vertical and geographic markets through our relationships
with industry-specific partners and distributors. We rely on these third-party
channels to provide sales and marketing presence and name recognition, as well
as the resources necessary for us to develop industry-specific financial
accounting solutions. Any of the following could result in a material adverse
effect on our business, financial condition and results of operations:
* Loss of an existing third-party channel
* Inability to identify and exploit new third-party channels
* Inability to adequately support new or existing channels
* A third-party channel's development of products or services that
compete with ours
* A third-party channel's formation of an alliance with our competitors
WE FACE RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
Our international sales represented 16.9% and 24.5% of total revenues
during 1997 and 1998, respectively. Our international sales are primarily
denominated in British pounds. An increase in the value of the British pound
relative to foreign currencies could make our products more expensive and,
therefore, potentially less competitive in those markets. Currently, we do not
employ currency hedging strategies to reduce this risk. In addition, our
international business may be subject to a variety of risks, including
difficulties in collecting international accounts receivable or obtaining U.S.
export licenses, potentially longer payment cycles, increased costs associated
with maintaining international marketing efforts, the introduction of non-tariff
barriers and higher duty rates and difficulties in enforcement of contractual
obligations and intellectual property rights.
UNDETECTED YEAR 2000 PROBLEMS COULD ADVERSELY AFFECT OUR BUSINESS
The year 2000 issue relates to computer programs and systems that recognize
dates using two-digit year data rather than four-digit year data. These programs
and systems may fail or provide incorrect information when using dates after
December 31, 1999. If the year 2000 issue disrupts our internal information
technology systems, or the information technology systems of companies with whom
we have significant commercial relationships, our business and financial
condition could be materially adversely affected.
The year 2000 issue may affect three areas of our business: (1) the design
of our products, (2) our internal computer systems, and (3) the computer systems
of our significant suppliers or customers. Each area is addressed below.
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1. Year 2000 compliance of our products
In as much as no test of year 2000 compliance can simulate the actual
change of the millennium, we cannot assure you that our products will
be unaffected by the year 2000. From the beginning, our products have
been designed and tested to be year 2000 compliant, and we design new
products, and any updates of existing products, to be year 2000
compliant. However, failures that cannot be detected using currently
available compliance testing could have a material adverse effect on
our business and financial condition.
2. Year 2000 compliance of our internal systems.
Our internal computer programs and operating systems relate to
virtually all segments of our business, including:
* merchandising
* customer database management
* marketing
* order processing
* order fulfillment
* contract management
* inventory management
* customer service
* financial reporting
These applications are currently, or are expected to be, year 2000
compliant. Nonetheless, we are requesting compliance statements from
any parties that service and supply these applications. We intend to
evaluate any risks disclosed in their responses and, if necessary,
consider possible alternative sources.
3. Year 2000 compliance of third-party systems
The computer programs and operating systems used by entities with whom
we have commercial relationships pose potential problems relating to
the year 2000 issue, which may affect our operations in a variety of
ways. These risks are more difficult to assess than those posed by
internal programs and systems. We rely on third parties for some of
the software code or programs that are embedded in, or work with, our
products. We are assessing whether the functionality of our products
would be materially diminished by a failure of such third-party
software to be year 2000 compliant. There can be no assurance that we
may not experience unanticipated expenses or be otherwise adversely
impacted by a failure of third-party systems or software to be year
2000 compliant. The most reasonably likely worst-case scenarios may
include: (i) corruption of data contained in our internal information
systems, (ii) hardware failure, and (iii) failure of infrastructure
services provided by utilities or government. We intend to include an
evaluation of these scenarios in our plan for assessing the programs
and systems of the entities with whom we have commercial
relationships.
We have formed a management team assigned with the task of assessing the
programs and systems of the entities with whom we have commercial relationships;
questionnaires have been sent out and responses are being evaluated for possible
next steps. We expect to
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complete this phase of assessment and identify related risks and uncertainties
by the end of the second quarter of fiscal 1999. Once we have identified the
risks and uncertainties, we intend to resolve any material risks and
uncertainties by communicating further with the relevant vendors and providers,
by working internally to identify alternative sourcing and by formulating
contingency plans to deal with those risks and uncertainties. To date, however,
we have not formulated such a contingency plan. We expect the resolution of
material risks and uncertainties to be an ongoing process until all year 2000
problems are satisfactorily resolved. We do not currently anticipate that the
total cost of any year 2000 remediation efforts that may be needed will be
material.
WE FACE RISKS ASSOCIATED WITH EUROPEAN MONETARY UNION (EMU)
Our internal business information systems are comprised of the same
commercial application software products we generally offer to end user
customers. Our latest software release contains EMU functionality that allows
for dual currency reporting and information management. We are not aware of any
material operational issues or costs associated with preparing internal systems
for the EMU. However, we utilize other third-party vendor network equipment, and
other third-party software products that may or may not be EMU compliant.
Although we are currently taking steps to address the impact, if any, of EMU
compliance for third party products, failure of any critical technology
components to operate properly post EMU may have an adverse impact on business
operations or require us to incur unanticipated expenses to remedy any problems.
HOW TO GET MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the Securities and Exchange Commission and with Nasdaq. This
additional information is also available to you on the SEC's Internet site. Here
are ways you can access these resources:
WHAT IS AVAILABLE WHERE TO GET IT
------------------------------ ------------------------------
SEC's Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W., Room
1024
Washington, D.C. 20549
Hard copies of information
The Nasdaq Stock Market, Inc.
1735 K Street, N.W.
Washington, D.C. 20006
----------------------------- ------------------------------
On-line information SEC's Internet website at
http://www.sec.gov
----------------------------- ------------------------------
Call the SEC for more
information
about its Public Reference 1-800-SEC-0330
Room
------------------------------ ------------------------------
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This prospectus is part of a registration statement that we filed with the
SEC. The registration statement contains more information than this prospectus
regarding FlexiInternational and its common stock, including a number of
exhibits and schedules. You can get a copy of the registration statement from
any of the sources shown above.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus, and information that we file after May 4, 1999 (the
filing date of the amended registration statement containing this prospectus)
with the SEC will automatically update and may supersede this information. We
are incorporating by reference the documents listed below and any future filings
we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to the sale of all the shares covered by this
prospectus.
* Our annual report on Form 10-K for the year ended December 31, 1998,
filed with the SEC on March 31, 1999
* Our proxy statement for the 1999 Annual Meeting of Stockholders, filed
with the SEC on April 12, 1999
* The description of our common stock contained in our registration
statement on Form 8-A, as amended, filed with the SEC on December 3,
1997, including any amendments or reports filed for the purpose of
updating that description.
You may request a copy of these documents, at no cost, by writing to:
FlexiInternational Software, Inc.
Two Enterprise Drive
Shelton, Connecticut 06484
Attention: Corporate Secretary
Telephone: (203) 925-3040
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus contains or incorporates forward-looking statements within
the meaning of section 27A of the Securities Act and section 21E of the Exchange
Act. You can identify these forward-looking statements by our use of the words
"believes,"
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"anticipates," "plans," "expects," "may," "will," "intends," "estimates" and
similar expressions, whether in the negative or affirmative. Although we believe
that these forward-looking statements reasonably reflect our plans, intentions
and expectations, we can give no assurance that we actually will achieve these
plans, intentions or expectations. Our actual results could differ materially
from the plans, intentions and expectations disclosed in these forward-looking
statements. We have included important factors in the cautionary statements
below that we believe could cause our actual results to differ materially from
our forward-looking statements. We do not intend to update information contained
in any of our forward-looking statements.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the selling
stockholders. Also, we will bear most of the costs of registering the shares
covered by this prospectus. Those costs include:
* registration and filing fees and Nasdaq listing fees
* fees and expenses of our counsel and accountants
* fees and expenses relating to our complying with state securities laws
We have also agreed to indemnify the selling stockholders against
liabilities under federal securities laws. However, the selling stockholders
will be responsible for any underwriting discounts and commissions or expenses
incurred by the selling stockholders for brokerage, accounting, tax or legal
services.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THE SELLING STOCKHOLDERS ARE OFFERING TO SELL, AND
SEEKING OFFERS TO BUY, SHARES OF FLEXIINTERNATIONAL COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE SHARES.
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SELLING STOCKHOLDERS
The shares will be sold by the selling stockholders listed below, or by
their pledgees, donees, transferees or other successors in interest. All but one
of the selling stockholders are former stockholders of the international
subsidiary we acquired in June 1998 (formerly known as The Dodge Group, Inc.).
We issued the shares being sold by these stockholders in connection with that
acquisition, and agreed that we would register their shares once we became
eligible to register them on Form S-3. None of these selling stockholders holds
any position or office with, has been employed by, or has otherwise had a
material relationship with, FlexiInternational within the past three years. The
only other selling stockholder, Furman Selz SBIC, L.P., bought its shares in a
private financing we conducted before our initial public offering. Furman Selz
currently holds approximately 12% of our stock, Brian Friedman, President of the
general partner of Furman Selz, is a member of our board of directors and James
L. Luikart, an affiliate of Furman Selz, is a former member of our board of
directors. No other selling stockholder holds any position or office with, has
been employed by, or has otherwise had a material relationship with,
FlexiInternational within the past three years. The following table sets forth,
to our knowledge, information about the selling stockholders as of December 31,
1998.
<TABLE>
<CAPTION>
Number of Number of Percent of
Shares of Number of Shares of Common
Common Stock Shares of Common Stock Stock
Beneficially Common Beneficially Owned
Owned Prior to Stock Owned After to After the
Name of Selling Stockholder Offering Offered Offering Offering
- -------------------------- -------------- --------- -------------- -----------
<S> <C> <C> <C> <C>
Furman Selz SBIC, L.P. 2,385,180 1,907,680 477,500 2.8%
J.P. Morgan Investment Corporation 248,722 248,722 0 --
SBIC Partners, L.P. 201,298 201,298 0 --
Highland Capital Partners II, Limited Partnership 61,516 61,516 0 --
St. Paul Fire & Marine Insurance Company 85,241 85,241 0 --
Brentwood Associates VI, L.P. 56,734 56,734 0 --
Morgan Stanley Venture Capital Fund, L.P. 49,843 49,843 0 --
Greylock Limited Partnership 32,758 32,758 0 --
Accel III L.P. 32,397 32,397 0 --
Pearson Investments Limited LLC 28,451 28,451 0 --
Sixty Wall Street SBIC Fund, L.P. 18,390 18,390 0 --
CRB Corporation 11,380 11,380 0 --
Frank Dodge 9,170 9,170 0 --
Simone Dodge 5,690 5,690 0 --
David M. and Diane B. Stoner 5,690 5,690 0 --
Essex Special Growth Opportunities Fund, L.P. 4,302 4,302 0 --
John J. Lynch 3,300 3,300 0 --
John Allen 3,582 82 3,500 *
Accel Japan L.P. 3,013 3,013 0 --
D.L. and V.S. Berger 2,845 2,845 0 --
Accel Investors `92 L.P. 2,260 2,260 0 --
Jeremy Wood 412 412 0 --
</TABLE>
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For purposes of this table, we have assumed that after completion of the
offering, none of the shares covered by this prospectus will be held by the
selling stockholders, except for Furman Selz SBIC, L.P. and John Allen who own
shares not covered by this prospectus. However, we do not know when or in what
amounts a selling stockholder may offer shares for sale. The selling
stockholders may sell any or all of the shares offered by this prospectus.
Because the selling stockholders may offer all or some of the shares in this
offering, and because there are currently no agreements, arrangements or
understandings about the sale of any of the shares that will be held by the
selling stockholders after completion of the offering, we cannot estimate the
number of the shares that will be held by the selling stockholders after
completion of the offering.
The number of shares listed in the table for Furman Selz includes a total
of 300,000 shares held by Brian Friedman, a director of FlexiInternational and
an affiliate of Furman Selz, and James L. Luikart, a former director of
FlexiInternational and an affiliate of Furman Selz. The number of shares listed
in the table for St. Paul Fire & Marine Insurance Company includes 28,339 shares
held by its subsidiary, St. Paul Venture Capital IV LLC.
PLAN OF DISTRIBUTION
The selling stockholders will act independently in the timing, manner and
size of each sale. Sales may be made in the over-the-counter market or
otherwise, at prices and under terms then prevailing, or at prices related to
the then current market price, or in negotiated transactions. Shares may be sold
in:
* purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account pursuant to this prospectus,
* ordinary brokerage transactions and transactions in which the broker
solicits purchasers,
* block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction, or
* privately negotiated transactions.
The selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, who may engage in short sales of
the common stock in the course of hedging the positions they assume with selling
stockholders. The selling stockholders may also sell the common stock short and
redeliver the shares to close out such short positions. The selling stockholders
may also enter into option or other transactions with broker-dealers or other
financial institutions that require the delivery to the broker-dealer or other
financial institution of shares offered by this prospectus, which they may then
resell under this prospectus. The selling stockholders may also pledge shares to
a broker-dealer or other financial institution, and upon a default the
broker-dealer or other financial institution may sell the pledged shares under
this prospectus. In addition, any shares that qualify for the exemption from
registration that Rule 144 provides may be sold under that rule instead of this
prospectus. We may amend or add to this prospectus from time to time to describe
a specific plan of distribution.
14
<PAGE> 14
Broker-dealers or agents engaged to sell the shares may arrange for other
broker-dealers to participate. Broker-dealers or agents may receive commissions,
discounts or concessions in amounts to be negotiated immediately prior to the
sale.
The selling stockholders, or their successors in interest and any
broker-dealers and any participating broker-dealers who execute sales for the
selling stockholders may be deemed to be "underwriters" within the meaning of
the Securities Act, and any profits realized by the selling stockholders and the
compensation of a broker-dealer may be deemed to be underwriting discounts and
commissions.
In order to comply with the securities laws of some states, the shares must
be sold only through registered or licensed brokers or dealers. In addition, the
shares may not be sold in some states unless they have been registered or
qualified for sale in that state.
We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares and to the
activities of the selling stockholders and their affiliates. In addition, we
have informed the selling stockholders that they must deliver copies of this
prospectus to purchasers at or before any sale of the shares. The selling
stockholders may indemnify any broker-dealer that participates in transactions
involving the sale of the shares against liabilities arising under the
Securities Act.
We will keep the registration statement of which this prospectus is a part
effective until all of the shares covered by this prospectus are sold or until
one year after the registration statement becomes effective, whichever comes
first. If required, a prospectus supplement will be distributed that will
contain the number of shares being offered and the terms of the offering.
LEGAL MATTERS
Hale and Dorr LLP will pass on the validity of the shares offered by this
prospectus.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the annual report on Form 10-K for the year ended December 31, 1998, have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
- --------------------------------------------------------------------------------
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED
IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF A VARIETY OF FACTORS, INCLUDING
THOSE SET FORTH IN THE FOLLOWING RISK FACTORS AND ELSEWHERE IN, OR INCORPORATED
BY REFERENCE INTO, THIS PROSPECTUS.
- --------------------------------------------------------------------------------
15
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by FlexiInternational Software, Inc. (except
expenses incurred by the selling stockholders for brokerage, accounting, tax or
legal services or any other expenses incurred by the selling stockholders in
disposing of the shares). All amounts shown are estimates except the Securities
and Exchange Commission registration fee.
Filing Fee - Securities and Exchange Commission ... $ 1,638
Legal fees and expenses of the company ............ $ 35,000
Accounting fees and expenses ...................... $ 5,000
Miscellaneous expenses ............................ $ 8,362
----------
Total Expenses .................................... $ 50,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation (the "Restated Certificate of Incorporation) provides that no
director of the Registrant shall be personally liable for any monetary damages
for any breach of fiduciary duty as a director, except to the extent that the
Delaware General Corporation Law prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
Article NINTH of the Registrant's Restated Certificate of Incorporation
provides that a director or officer of the Registrant (a) shall be indemnified
by the Registrant against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement incurred in connection with any litigation
or other legal proceeding (other than an action by or in the right of the
Registrant) brought against him by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful and (b) shall be
indemnified by the Registrant against all expenses (including attorneys' fees)
and amounts paid in settlement incurred in connection with any action by or in
the right of the Registrant brought against him by virtue of his position as a
director or officer of the Registrant if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Registrant, except that no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the
Registrant, unless a court determines that, despite such adjudication but in
view of all of the circumstances, he is entitled to indemnification of such
expenses. Notwithstanding the foregoing, to the extent that a director or
officer has been successful, on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, he is required to be
indemnified by the Registrant against all expenses (including attorneys' fees)
incurred in connection therewith. Expenses shall be advanced to a director or
officer at his request, provided that he undertakes to repay the amount advanced
if it is ultimately determined that he is not entitled to indemnification for
such expenses.
16
<PAGE> 16
Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Registrant
notice of the action for which indemnity is sought and the Registrant has the
right to participate in such action or assume the defense thereof.
Article NINTH of the Registrant's Restated Certificate of Incorporation
further provides that the indemnification provided therein is not exclusive, and
provides that in the event that the Delaware General Corporation Law is amended
to expand the indemnification permitted to directors or officers the Registrant
must indemnify those person to the fullest extent permitted by such law as so
amended.
Section 102 of the Delaware General Corporation Law, as amended, allows a
corporation to eliminate the personal liability of directors of a corporation to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except where the director breached his duty of
loyalty, failed to act in good faith, engaged in intentional misconduct or
knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit.
Section 145 of the General Corporation Law of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have 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, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Amended and Restated Certificate of Incorporation
4.2 Amended and Restated By-laws
4.3 Specimen stock certificate
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
17
<PAGE> 17
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed herewith.
24.1 Power of Attorney (See page II-4 of this registration statement).
ITEM 17. UNDERTAKINGS.
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 this 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 this
registration statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in this registration
statement.
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities
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<PAGE> 18
offered therein and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
The Registrant hereby undertakes to deliver or cause to be delivered with
the prospectus, to each person to whom the prospectus us sent or given, the
latest annual report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the requirements of Rule
14a-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 is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, 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 the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment of
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Shelton, Connecticut, on this 28th day of April, 1999.
FLEXIINTERNATIONAL SOFTWARE, INC.
By: /s/Stefan R. Bothe
----------------------------------------
Stefan R. Bothe, Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment of registration statement has been signed by the following
persons in the capacities and on the 28th day of April 1999.
Signature Title
--------- -----
* Chairman of the Board and Chief Executive
- ------------------------------- Officer (Principal Executive Officer)
Stefan R. Bothe
* Chief Financial Officer (Principal Financial
- ------------------------------- and Accounting Officer)
David P. Sommers
* Director
- -------------------------------
Jennifer V. Cheng
Director
- -------------------------------
John B. Landry
* Director
- -------------------------------
A. David Tory
* Director
- -------------------------------
Brian Friedman
* Director
- -------------------------------
Thomas C. Theobald
* By: /s/ Stefan R. Bothe
-------------------------
Stefan R. Bothe
Attorney-in-fact
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<PAGE> 20
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Amended and Restated Certificate of Incorporation of the Registrant is
incorporated herein by reference to Exhibit 3.2 to the Registrant's
registration statement on Form S-1, as amended (File No. 333-38403)
(the "Form S-1").
4.2 Amended and Restated By-laws of the Registrant are incorporated herein
by reference to Exhibit 3.4 to the Form S-1.
4.3 Specimen certificate for shares of Common Stock is incorporated
herein by reference to Exhibit 4 to the Form S-1.
5.1 Opinion of Hale and Dorr LLP (previously filed).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1.
24.1 Power of Attorney (previously filed).
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 2 to Registration Statement on Form S-3
of our report dated January 26, 1999, except as to Note 13 which is as of
February 26, 1999, appearing on page F-2 of FlexiInternational Software, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1998. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedule, which appears on page F-19 of such Form 10-K. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PricewaterhouseCoopers LLP
Stamford, Connecticut
April 29, 1999
