As filed with the Securities and Exchange Commission on December 17, 1999
Registration No. 333-______
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Containing a Reoffer Prospectus on Form S-3
Industri-Matematik International Corp.
(Exact name of registrant as specified in its charter)
Delaware No. 51-0374596
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
901 Market Street
Suite 475
Wilmington, Delaware 19801
(302) 777-1608
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
Industri-Matematik International Corp. Restricted Stock Program
(Full title of the plan)
----------------
Marvin S. Robinson, Esq.
Tannenbaum Dubin & Robinson, LLP
1140 Avenue of the Americas
New York, New York 10036
(212) 302-2900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
Approximate date of commencement 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 interest reinvestment plans, please check the
following box. [_]
If any 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. [X]
CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed Proposed
Maximum Maximum
Title of Each Amount Offering Aggregate Amount of
Class of Securities to be Price Per Offering Registration
to be Registered Registered Share Price Fee
- ------------------------------------------------------------------------------
Industri-Matematik International
Corp. Restricted Stock Program
Common Stock (par value $0.01) 50,000 $14.375(1) $ 718,750 $ 200(2)
- ------------------------------------------------------------------------------
(1) All such shares have been issued pursuant to the Company's Restricted
Stock Program at the indicated proposed maximum offering price per share.
(2)Pursuant to Rule 429 of the Securities Act of 1933, as amended, the
Prospectus included in this Registration Statement will be used in connection
with the sale of certain securities registered pursuant to a Registration
Statement on Form S-8 (File No. 333-81905) filed on June 30, 1999. A total of
340,000 shares are being carried forward from that Registration Statement, and
the filing fees previously paid with respect to such shares was $1,207.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1933, as amended, and, in accordance therewith,
files reports, proxy statements, and other information with the Securities and
Exchange Commission ("Commission"). Such reports, proxy statements, and other
information are available for inspection and copying at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the following regional offices of the
Commission: 7 World Trade Centre, Suite 1300, New York, New York 10048 and
500 West Madison Street, Suite 1400, Chicago, Illinois 60621. Copies of such
material also can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 at
prescribed rates. The Common Stock of the Company is quoted on the Nasdaq
National Market and such material also may be inspected at the offices of
Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006.
The Company will provide without charge to each person to whom a copy of
the Prospectus included in this Registration Statement is delivered, upon
written or oral request of such person, a copy of any and all of the
information that has been incorporated by reference in such Prospectus and any
Registration Statement containing such Prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference in the information that such Prospectus
and any Registration Statement containing such Prospectus incorporates). Such
requests should be made to Marvin S. Robinson, Tannenbaum Dubin & Robinson,
LLP, 1140 Avenue of the Americas, New York, New York 10036, (212) 302-2900.
EXPLANATORY NOTE
This Registration Statement has been prepared in accordance with the
requirements of Form S-8 which relates to the Company's Common Stock offered
pursuant to the Company's Restricted Stock Program. The securities registered
pursuant to this Registration Statement consist of additional securities of
the same class as certain securities registered pursuant to a Registration
Statement on Form S-8 (File No. 333-81905) which was filed on June 30, 1999,
and the contents of such earlier Registration Statement is incorporated herein
by reference. This Registration Statement also includes a Prospectus prepared
in accordance with the requirements of Part I of Form S-3 which relates to the
reoffer or resale by Selling Stockholders. Pursuant to the provisions of Rule
429 under the Securities Act of 1933, as amended, such reoffer Prospectus has
been revised from the Prospectus included in the prior Registration Statement
and will be used in connection with the sale of securities registered pursuant
to such prior Registration Statement as well as pursuant to this Registration
Statement.
<PAGE>
PROSPECTUS
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INDUSTRI-MATEMATIK INTERNATIONAL CORP.
390,000 Shares
COMMON STOCK
$.01 par value per share
This Prospectus relates to the offer and sale of 390,000 shares
("Shares") of common stock, $.01 par value per share ("Common Stock"), of
Industri-Matematik International Corp. ("Company") which may be offered hereby
from time to time by any or all of the selling stockholders named herein
("Selling Stockholders") for their own benefit. The Company will not
receive any of the proceeds from the sale of the Shares of Common Stock by the
Selling Stockholders.
The Company's Common Stock is quoted on the Nasdaq National Market under the
symbol "IMIC".
The Common Stock offered hereby involves a high degree of risk.
See "Risk Factors".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus in connection
with the offering made hereby, and if given or made, such information or
representation must not be relied upon as having been authorized by the
Company or by any other person. Neither the delivery of this Prospectus nor
any sale made hereunder shall create, under any circumstances, any implication
that information herein is correct as of any time subsequent to the date
hereof. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy any security other than the securities
covered by this Prospectus, nor does it constitute an offer to or solicitation
of any person in any jurisdiction in which such offer or solicitation may not
be lawfully made.
The date of this Prospectus is December 17, 1999
<PAGE>
THE COMPANY
The Company's principal office is located at 901 Market Street, Suite
475, Wilmington, Delaware 19801, and its telephone number is (301) 777-1608.
RISK FACTORS
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), that involve certain risks and uncertainties. Discussions containing
such forward-looking statements may be found in the material set forth below
as well as in this Prospectus generally, including the documents incorporated
by reference herein. Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. The Company's actual results could differ
materially from those anticipated in such forward-looking statements as a
result of certain factors, including those appearing elsewhere in this
Prospectus and in the documents incorporated by reference herein. These
forward-looking statements are made as of the date of this Prospectus and the
Company assumes no obligation to update such forward-looking statements or to
update the reasons why actual results could differ materially from those
anticipated in such forward-looking statements.
In addition to the other information in this Prospectus, the following
risk factors should be considered carefully in evaluating the Company and its
business before purchasing the Common Stock offered by this Prospectus.
No Assurance of Profitability. Although the Company achieved net income
of $6.9 million and $9.4 million for its 1997 and 1998 fiscal years,
respectively, the Company had a loss of $35.3 million for its 1999 fiscal year
and losses of $7.3 million and $6.8 million for the first and second quarters
of its 2000 fiscal year, respectively, and there can be no assurance that the
Company will be profitable in any future period. Future operating results will
depend on many factors, including the growth of the supply chain management
software market, market acceptance of the Company's existing and new software
products or enhanced versions thereof, competition, the success of the
Company's sales, support, service, and marketing organizations, general
economic conditions, and other factors.
Significant Fluctuations in Quarterly Operating Results and Seasonality.
The Company has experienced, and expects to continue to experience,
significant fluctuations in quarterly operating results that may be caused by
many factors, including, among others: the size and timing of orders for the
Company's products; the lengthy sales and implementation cycle for the
Company's products and delays in the implementation process; introduction or
enhancement of products by the Company or its competitors; changes in pricing
policy of the Company or its competitors; increased competition; technological
changes in computer systems and environments; the ability of the Company to
timely develop, introduce, and market new products and new versions of
existing products; quality control of products sold; market readiness to
deploy supply chain management products for distributed computing
environments; market acceptance of new products and product enhancements;
seasonality of revenue; customer order deferrals in anticipation of new
products and product enhancements; personnel changes; fluctuations in foreign
currency exchange rates; mix of license and service and maintenance revenues
and general economic conditions. Because a significant portion of the
Company's revenues has been, and the Company believes may continue to be,
derived from large sales (licenses), the timing of such large sales and their
fulfillment has caused, and is expected to continue to cause, material
fluctuations in the Company's operating results, particularly on a quarterly
basis. As a result of these and other factors, the Company believes that
period-to-period quarterly comparisons of its results of operations are not
necessarily meaningful and should not be relied upon as indications of future
performance. The Company's quarterly operating results also are subject to
certain seasonal fluctuations. The Company's revenues, particularly its
license revenues, are typically strongest in its third and fourth fiscal
quarters, which end January 31 and April 30, respectively, and weakest in its
first and second fiscal quarters, which end July 31 and October 31,
respectively. The Company's revenues and operating results in its third fiscal
quarter typically benefit from purchase decisions made by the large
concentration of customers with calendar year-end budgeting, while revenues
and operating results in its fourth fiscal quarter typically benefit from the
efforts of the Company's sales force to meet fiscal year-end sales quotas.
Like many application software vendors, in its first and second fiscal
quarters, the Company's sales force initiates sales activity directed to
achieving fiscal year-end goals. In addition, the Company's first and second
fiscal quarters include the months of July and August when both sales and
billable customer services activity, as well as customer purchase decisions,
are reduced, particularly in Europe, due to summer vacation schedules. As a
result of these seasonal factors, the Company may experience weaker
performance in its first and/or second fiscal quarters as compared to its
third and/or fourth fiscal quarters.
Unpredictability of Orders. Because the Company generally ships software
products within a short period after receipt of an order, it typically does
not have a material backlog of unfulfilled orders. License revenues in any
quarter are substantially dependent on orders booked and shipped in that
quarter and cannot be predicted with any degree of certainty. The Company has
historically recognized a significant portion of its license revenues in the
last two weeks of a quarter. Any significant shortfall of license revenues in
relation to the Company's expectations or any material delay of customer
orders have an immediate adverse effect on its business, operating results,
and financial condition. Due to the foregoing factors, it is possible that in
future periods the Company's revenues and thus its operating results may be
below the expectations of public market analysts and investors. In such event,
the price of the Company's Common Stock could be materially and adversely
affected.
Lengthy Sales and Implementation Cycle. The sale (license) and
implementation of the Company's products and particularly those related to
larger sales generally involve a significant commitment of resources by
prospective customers. As a result, the Company's sales process often is
subject to delays associated with lengthy approval processes associated with
significant capital expenditures. For these and other reasons, the sales cycle
associated with the license of the Company's products varies substantially
from customer to customer and typically lasts between 3 and 12 months during
which time the Company may devote significant time and resources to a
prospective customer, including costs associated with multiple site visits,
product demonstrations, and feasibility studies, and experience a number of
significant delays over which the Company has no control. Any significant or
ongoing failure by the Company to ultimately achieve such sales could has a
material adverse effect on the Company's business, operating results, and
financial condition. In addition, following license sales, the software
implementation typically involves customer training, integration with the
customer's other existing systems, and the development of product extensions
to add customer-specific functionality. The Company and/or a third party
consultant may provide such post delivery implementation services pursuant to
a separate professional services agreement. A successful implementation
requires a close working relationship between the Company, the customer, and,
frequently, third party consultants who assist in the implementation process.
Any inability of the Company to achieve such close working relationships, or
any inability of the Company's consulting services organization or third party
consultants to perform implementation services on a timely basis, may result
in delays in the customer implementation process. There can be no assurance
that delays in the implementation process for any given customer will not have
a material adverse effect on the Company's business, operating results, and
financial condition.
Dependence upon Relationship with Oracle. An important part of the
Company's operating results for its 1997 and 1998 fiscal years depended upon
its marketing and sales relationship with Oracle; the impact of such
relationship was less significant in fiscal 1999 and is not anticipated to be
significant in fiscal 2000 and thereafter. For the fiscal years ended April
30, 1997, 1998, and 1999, the Company generated 63%, 53%, and 20% of its
license revenues and 35%, 39%, and 29% of its total revenues, respectively,
through various joint marketing efforts with Oracle. Prior to 1997, the
Company engaged in an informal joint marketing and sales arrangement with
Oracle pursuant to which the two companies jointly marketed to customers in
the consumer packaged goods industry. In January 1997, the Company entered
into the Oracle Agreement pursuant to which the parties agreed for a term of
three years to jointly market and license the Oracle Solution Suite, which
incorporated the Company's System ESS(R) software and certain Oracle software,
and other complementary software of third parties. Oracle pays the Company a
percentage of the total license fees that Oracle receives from a customer for
System ESS. The Oracle Agreement has been amended at various times through
December, 1998, and the term is still continuing. The Oracle Agreement, as
amended, provides for additional development of component software,
integration of the software components, and marketing and support of the
Oracle Solution Suite. Pursuant to the Oracle Agreement, as amended, Oracle
and its distributors have the non-exclusive right to sub-license System ESS as
part of the Oracle Solution Suite to certain customers in the consumer
packaged goods industry. The Company has the worldwide right to market System
ESS to customers in the consumer packaged goods industry as a "point" solution
and in any other manner including combining System ESS with other software,
which combination can be substantially similar to the Oracle Solution Suite.
The Company and Oracle periodically enter into separate agreements authorizing
Oracle to re-license the Company's System ESS software to customers in the
consumer packaged goods industry and other industries. Pursuant to such
agreements, Oracle pays to the Company a specified percentage of the license
fee for System ESS. The Company also from time to time directly competes with
Oracle's order management software product.
In the consumer packaged goods industry, the Company actively markets
and sells its VIVALDI(TM) suite of software (which encompasses its System ESS
software) as a "point" solution, as part of the Oracle Solution Suite, and
combined with software of other vendors. Accordingly, the Company's sales of
its VIVALDI software in the consumer packaged goods industry are affected in
part by Oracle's efforts under the Oracle Agreement which the Company cannot
control. There can be no assurance that Oracle will not otherwise curtail or
discontinue the Oracle Agreement, that the Company will not terminate the
Oracle Agreement, or that continuation of the Oracle Agreement will be
beneficial to the Company, any of which circumstances could have a material
adverse effect on the business, operating results, and financial condition of
the Company. There can be no assurance that Oracle will continue to recommend
the Company and its products to potential customers or enter into separate
re-licensing agreements with the Company, either of which could have a
material adverse effect on the business, operating results, and financial
condition of the Company.
Competition. The Company's products are targeted at the market for
supply chain management software products which is intensely competitive and
characterized by rapid technological change. The Company's competitors are
diverse and offer a variety of solutions directed at various segments of the
supply chain as well as the enterprise as a whole. These competitors include
(i) enterprise application software vendors which offer client/server ERP
solutions, such as SAP AG, Baan Company N.V., J.D. Edwards & Company, System
Software Associates, Inc., and Oracle, (ii) companies offering standardized or
customized products on mainframe and/or mid-range computer systems, (iii)
internal development efforts by corporate information technology departments,
(iv) smaller independent companies which have developed or are attempting to
develop advanced supply chain management and/or logistics execution software
which complements or competes with the Company's software solutions, and (v)
other business application software vendors who may broaden their product
offerings by internally developing, or by acquiring or partnering with
independent developers of, advanced logistics execution software. In addition,
many of the Company's competitors have longer operating histories,
significantly greater financial, technical, marketing, and other resources,
greater name recognition, and a larger installed base of customers than the
Company. In order to be successful in the future, the Company must continue to
respond promptly and effectively to the challenges of technological change and
competitive innovations. The Company's competitors may be able to respond more
quickly to new or emerging technologies and changes in customer requirements
or devote greater resources to the development, promotion, and sale of their
products than the Company. The Company also expects to face additional
competition as other established and emerging companies enter the market for
order fulfillment software and new products and technologies are introduced.
In addition, current and potential competitors may make strategic acquisitions
or establish cooperative relationships among themselves or with third parties,
thereby increasing the ability of their products to address the needs of the
Company's prospective customers. Accordingly, it is possible that new
competitors or alliances among current and new competitors may emerge and
rapidly gain significant market share resulting in price reductions, fewer
customer orders, and reduced gross margins, any one of which could materially
adversely affect the Company's business, operating results, and financial
condition. There can be no assurance that the Company will be able to compete
successfully with existing or new competitors or that competition will not
have a material adverse effect on the Company's business, operating results,
and financial condition.
Attracting and Retaining Key Employees. The Company believes its future
success and ability to achieve revenue growth will depend in significant part
upon its ability to attract and retain highly skilled management, sales,
support, service, marketing, and product development personnel. Competition
for such personnel is intense, and recruiting such personnel is becoming
increasingly difficult because of the strong world-wide economy. In addition,
the loss of one or more of the Company's key personnel could have a material
adverse effect on the Company's business, operating results, and financial
condition. The Company does not have, and does not intend to obtain, key man
life insurance on any of its executive management personnel. There can be no
assurance that the Company will be able to retain its key employees or that it
will be successful in attracting, assimilating, and retaining such personnel
in the future. Failure to attract, assimilate, and retain key personnel could
have a material adverse effect on the Company's business, operating results,
and financial condition.
Reliance on and Need to Develop Additional Relationships with Third
Parties. The Company relies on formal and informal arrangements with a number
of software vendors and consulting and systems integration firms to enhance
its sales, support, service, and marketing efforts, particularly with respect
to implementation and support of its products and lead generation and
assistance in the sale process. Such firms include Andersen Consulting LLC,
Cap Gemini, Computer Sciences Corporation, IBM, MCI Systemhouse, and Oracle
and Oracle Consulting worldwide, Palarco, Inc., Solutions Consulting, Inc. and
Unisys Inc. in the United States, and Cap Gemini, Ceratina Logistics OY,
Debis, ECsoft, Logistics Consultancy Norway Medata, Ordina, Tamperen
Systemitiimi, and TT Tieto in Europe. The Company expects to continue to rely
significantly upon such third parties for marketing and sales, lead
generation, product implementation, customer support services, and end user
training. The Company will need to expand its relationships with these parties
and enter into relationships with additional third parties in order to support
revenue growth. Many such firms have similar, and often more established,
relationships with the Company's principal competitors. There can be no
assurance that these and other third parties will provide the level and
quality of service required to meet the needs of the Company's customers, that
the Company will be able to maintain an effective, long term relationship with
such third parties, or that such third parties will continue to meet the needs
of the Company's customers. If the Company is unable to develop and maintain
effective relationships with these and other third parties, or if such parties
fail to meet the needs of the Company's customers, the Company's business,
operating results, and financial condition could be adversely affected.
Further, there can be no assurance that these software vendors and third party
implementation providers, many of which have significantly greater financial,
technical, personnel, and marketing resources than the Company, will not
market software products in competition with the Company in the future or will
not otherwise reduce or discontinue their relationships with or support of the
Company and its products.
Dependence on Principal Product. License and service and maintenance
revenues related to System ESS have represented a substantial portion of the
Company's revenues in recent years. Sales of System ESS which is now included
in the Company's VIVALDI suite of software are expected to continue to
represent a significant part of the Company's revenues in the future. The
Company's success depends on continued market acceptance of these products as
well as its ability to introduce new versions and products to meet the
evolving needs of its customers. There can be no assurance that the Company's
products will continue to achieve market acceptance or that the Company will
introduce enhanced versions on a timely basis, or at all, to meet the evolving
needs of its customers. Any reduction in demand for the Company's products,
increased competition in the market for supply chain management software,
technological change, or other factors could have a materially adverse effect
on the Company's business, operating results and financial condition.
Dependence on Emerging Market for Supply Chain Management Software. The
Company currently derives, and is expected to continue to derive, a
substantial portion of its revenues from licenses and services related to its
VIVALDI suite of software (which includes System ESS), client/server supply
chain management software products. The market for enterprise-wide management
software in general, and for supply chain management software in particular,
has been limited in recent periods, and there can be no assurance that it will
stabilize or that businesses will continue to license components of the
VIVALDI suite. The Company has spent, and intends to continue to spend,
considerable resources educating potential customers generally about supply
chain management, about the need for order fulfillment software solutions, and
specifically about the VIVALDI suite. However, there can be no assurance that
such expenditures will enable the VIVALDI suite to achieve any additional
degree of market acceptance. If the supply chain management software market
fails to grow or grows more slowly than the Company currently anticipates, the
Company's business, operating results, and financial condition could be
materially and adversely affected.
Rapid Technological Change and Requirement for Frequent Product
Transitions. The market for the Company's products is characterized by rapid
technological developments, evolving industry standards, and rapid changes in
customer requirements. The introduction of products embodying new
technologies, the emergence of new industry standards, or changes in customer
requirements could render the Company's existing products obsolete and
unmarketable. As a result, the Company's success depends upon its ability to
continue to enhance existing products, respond to changing customer
requirements, and develop and introduce in a timely manner new or enhanced
products that keep pace with technological developments and emerging industry
standards. Customer requirements include, but are not limited to, operability
across distributed and changing heterogeneous hardware platforms, operating
systems, relational databases, and networks. The System ESS and VIVALDI
customer operates on Windows 3.1, Windows 95, and Windows NT platforms. The
VIVALDI suite of software currently provides support for 13 languages. System
ESS and VIVALDI can currently operate on UNIX server platforms for
Hewlett-Packard Corporation, IBM, Digital Equipment Corporation, and Sun
Microsystems Corporation as well as on Windows NT server platforms. The
Company continues to enhance its products to operate on such platforms in
order to meet customers' requirements. There can be no assurances that the
Company will be successful in developing enhanced versions of System ESS and
the VIVALDI suite or new products on a timely basis, or that such enhancements
or new products, when introduced, will achieve market acceptance or will
adequately address the changing needs of the marketplace. If the Company is
unable to develop and introduce new products or enhancements to existing
products in a timely manner in response to changing market conditions or
customer requirements, the Company's business, operating results, and
financial condition could be materially and adversely affected.
Litigation. In November, 1998, a licensee of System ESS (pursuant to a
license agreement with a Company partner) which was indebted to the Company
for implementation services, initiated an arbitration proceeding before the
American Arbitration Association in New York. The matter was settled in
September, 1999. In February, 1999, a class action lawsuit was commenced
against the Company, certain of its officers, directors, and controlling
shareholders who sold shares of Common Stock during the class period, and its
underwriters claiming violations of the Federal securities laws. To date no
answer to the complaint has been filed. In May, 1999, the Company initiated
an Arbitration in Denmark against a Danish licensee of System ESS seeking
damages for breach of contract. The licensee has claimed damages against the
Company for breach of contract. While management believes these actions to be
without merit, an unfavorable outcome in either of the two pending proceedings
or any other actions which may be brought against the Company may have a
material adverse affect upon the Company's business, operating results, and
financial condition.
Risk of Software Defects. Software products as complex as those offered
by the Company frequently contain errors or defects, especially when first
introduced or when new versions or enhancements are released. Despite product
testing, the Company has in the past released products with defects,
discovered software errors in certain of its new versions after introduction,
and experienced delays or lost revenue during the period required to correct
these errors. The Company regularly introduces new releases and periodically
introduces new products. There can be no assurance that, despite testing by
the Company and by its customers, defects and errors will not be found in
existing products or in new products, releases, versions, or enhancements
after commencement of commercial shipments. Any such defects and errors could
result in adverse customer reactions, negative publicity regarding the Company
and its products, harm to the Company's reputation, loss of or delay in market
acceptance, or require product changes, any of which could have a material
adverse effect upon the Company's business, operating results, and financial
condition.
Product Liability. The Company's license agreements with customers
typically contain provisions designed to limit the Company's exposure to
potential product liability claims. The limitation of liability provisions
contained in such license agreements, professional services agreements, and
support agreements may not be effective. The Company's products are generally
used to manage data critical to large organizations and, as a result, the sale
and support of products by the Company may entail the risk of product
liability claims. A successful liability claim brought against the Company
could have a material adverse effect upon the Company's business, operating
results, and financial condition.
Dependence on Proprietary Technology; Risks of Infringement. The
Company's success depends, in part, upon the protection of its proprietary
technology. The Company relies on a combination of copyright, trademark, and
trade secret laws, confidentiality procedures, and license arrangements to
establish and protect its proprietary rights. As part of its confidentiality
procedures, the Company licenses its software pursuant to signed license
agreements that impose restrictions on the licensee's ability to utilize the
software and generally enters into non-disclosure agreements with its
employees, distributors, and partners, and limits access to and distribution
of its software, documentation, and other proprietary information. Despite
these precautions, it may be possible for a third party to copy the Company's
products or otherwise obtain and use the Company's proprietary technology
without authorization. In addition, the laws of certain countries do not
protect the Company's proprietary rights to the same extent as do the laws of
the United States or Sweden. Accordingly, third parties may copy or otherwise
obtain and use the Company's proprietary technology without authorization.
There can be no assurance that the Company's protection of its proprietary
rights will be adequate or that the Company's competitors will not
independently develop similar technology or duplicate illegally the Company's
products.
The Company is not aware that any of its products infringe the
proprietary rights of third parties. There can be no assurance, however, that
third parties will not claim such infringement by the Company with respect to
current or future products. The Company expects that software product
developers increasingly will be subject to such claims as the number of
products and competitors in the Company's industry segment grows and the
functionality of products in the industry segment overlap. Any such claims,
with or without merit, could result in costly litigation that could absorb
significant management time, which could have a material adverse effect on the
Company's business, operating results, and financial condition. Such claims
might require the Company to enter into royalty or license agreements. Such
royalty or license agreements, if required, may not be available on terms
acceptable to the Company or at all, which could have a material adverse
effect upon the Company's business, operating results, and financial
condition.
Exposure to Currency Fluctuations. A significant portion of the
Company's business is conducted in currencies other than the U.S. dollar (the
currency in which its financial statements are stated), primarily the Swedish
krona and, to a lesser extent, the U.K. pound sterling, the German mark, the
Dutch guilder, the French franc, the Australian dollar, and the Canadian
dollar. The Company incurs a significant portion of its expenses in Swedish
krona, including all of its product development expenses and a substantial
portion of its general and administrative expenses. As a result, appreciation
of the value of the Swedish krona relative to the other currencies in which
the Company generates revenues, particularly the U.S. dollar, could adversely
affect operating results. The financial statements of the Company are
translated from the functional currency of the operating subsidiaries into
U.S. dollars, the Company's reporting currency, utilizing the current rate
method. Accordingly, assets and liabilities are translated at exchange rates
in effect at the end of the reporting period, and revenues and expenses are
translated at the average exchange rate during the period. All translation
gains or losses from the translation into the Company's reporting currency are
included as a separate component of stockholders' equity. Fluctuations in the
Swedish krona and other currencies relative to the U.S. dollar will effect
period to period comparison of the Company's reported results of operations.
Due to constantly changing currency exposures and the volatility of currency
exchange rates, there can be no assurance that the Company will not experience
currency losses in the future, nor can the Company predict the effect of
exchange rate fluctuations upon future operating results. The Company does not
currently undertake hedging transactions to cover its currency exposure, but
the Company may choose to hedge a portion of its currency exposure in the
future as it deems appropriate.
Possible Volatility of Stock Price. The market price for the Common
Stock has in the past been, and in the future could be, subject to significant
fluctuations in response to a number of factors, including the announcement of
new products or product enhancements by the Company or its competitors,
quarterly variations in the Company's results of operations, or results of
operations of its competitors or companies in related industries, changes in
earnings or revenue estimates, or recommendations by securities analysts,
developments in the Company's industry, general market conditions, and other
factors, including factors unrelated to the operating performance of the
Company or its competitors. In addition, stock prices for many companies in
the technology and emerging growth sectors have experienced wide fluctuations
that have often been unrelated to the operating performance of such companies.
Such factors and fluctuations, as well as general economic, political, and
market conditions, such as recessions, could materially and adversely affect
the market price of the Company's Common Stock.
Control by Management and Current Stockholders; Indemnification of
Officers and Directors. The Company's executive officers and directors and
their affiliates, in the aggregate, own beneficially 53.0% of the Company's
outstanding Common Stock as of October 31, 1999. In particular, Warburg,
Pincus Investors, L.P. ("Warburg") owned beneficially 38.9% of the Company's
outstanding Common Stock as of such date. As a result, Warburg can exercise
significant influence over all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions. The voting power of Warburg and the Company's officers and
directors under certain circumstances could have the effect of delaying,
deferring, or preventing a change in control of the Company, and making
certain transactions more difficult or impossible absent the support of such
stockholders, including proxy contests, mergers involving the Company, tender
offers, open-market purchase programs, or other purchases of Common Stock that
could give stockholders of the Company the opportunity to realize a premium
over the then prevailing market price for shares of Common Stock. The Company
has entered into agreements with its officers and directors indemnifying them
against losses they may incur in legal proceedings arising from their service
to the Company.
Effect of Certain Charter Provisions; Antitakeover Effects of the
Company's Charter, By-laws, and Delaware Law. The Company's Board of Directors
has the authority to issue up to 15,000,000 shares of Preferred Stock and to
determine the price, preferences, privileges, and restrictions, including
voting rights, of those shares without any further vote or action by the
stockholders. 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 in the future. The issuance of Preferred Stock could
have the effect of making it more difficult for a third party to acquire a
majority of the outstanding voting stock of the Company. In addition, the
Company is subject to the antitakeover provisions of Section 203 of the
Delaware General Corporation Law, which prohibits the Company from engaging in
a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
interested stockholder, unless the business combination is approved in a
prescribed manner. The application of Section 203 also could have the effect
of delaying, deferring, or preventing a change of control of the Company.
Further, certain provisions of the Company's Certificate of Incorporation and
By-laws may have the effect of discouraging, delaying, or preventing a merger,
tender offer, or proxy contest involving the Company, which could adversely
affect the market price of the Company's Common Stock.
Registration Rights. A total of 15,349,769 shares of Common Stock held
by certain stockholders are entitled to certain registration rights. If such
stockholders, by exercising their registration rights, cause a large number of
shares to be registered and sold in the public market, the sale of such shares
could have a material adverse effect on the market price for the Company's
Common Stock and could materially adversely effect the Company's ability to
raise additional capital when or if required.
Enforceability of U.S. Judgments against Non-U.S. Officers and
Directors. A substantial portion of the Company's assets are located outside
the United States. In addition, members of the Board of Directors of the
Company and certain experts named herein are residents of countries other than
the United States. As a result, it may not be possible for investors to effect
service of process within the United States upon such persons or to enforce
against such persons judgments of courts of the United States predicated upon
civil liabilities under the United States Federal securities laws. There can
be no assurance that United States investors will be able to enforce against
the members of the Board of Directors or certain experts named herein who are
residents of Sweden or countries other than the United States, any judgments
in civil and commercial matters, including judgments under the federal
securities laws. In addition, there is doubt as to whether a Swedish court
would impose civil liability on the members of the Board of Directors of the
Company in an original action predicated solely upon the Federal securities
laws of the United States brought in a court of competent jurisdiction in
Sweden against the Company or such members.
Holding Company Structure. All of the operations of the Company are and
will be conducted through direct and indirect subsidiaries. The Company's cash
flow will depend upon the operating results and cash flow of its subsidiaries
and the payment of funds by those subsidiaries to the Company in the form of
loans, dividends, or by other methods. The subsidiaries are separate and
distinct legal entities and have no obligation, contingent or otherwise, to
make funds available to the Company, whether in the form of loans, dividends,
or otherwise. Applicable law in certain countries may limit the ability of a
subsidiary to pay dividends in the absence of sufficient distributable
reserves or for other reasons. The Company's Swedish, United Kingdom, German,
Dutch, French, United States, Australian, and Canadian subsidiaries are not
subject to any current exchange controls. However, future exchange controls in
these counties, or the existence of such controls in other countries in which
the Company establishes subsidiaries, could limit or restrict the ability of
the Company to obtain loans, dividends, or otherwise access financial
resources in such subsidiaries. In addition, the Company's subsidiaries may
from time to time in the future become parties to financing arrangements which
may contain limitations on the ability of such subsidiaries to pay dividends
or to make loans or advances to the Company. In the event of any insolvency,
bankruptcy, or similar proceedings, creditors of the subsidiaries would
generally be entitled to priority over the stockholders of the Company with
respect to assets of the affected subsidiary.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares of Common Stock by the Selling Stockholders.
THE SELLING STOCKHOLDERS
This Prospectus relates to possible sales by stockholders of the Company
of Shares issued pursuant to the Company's Restricted Stock Program. The
following table shows the names of the Selling Stockholders, the number of
outstanding Shares of Common Stock of the Company beneficially owned by each
of them as of December 13, 1999, and the number of Shares available for resale
hereunder, subject to terms of the Company's Restricted Stock Program.
Because the Selling Stockholders may sell all or part of their Shares pursuant
to this Prospectus, no estimate can be given as to the amount of Shares that
will be held by each Selling Stockholder upon termination of this offering.
SELLING STOCKHOLDER TABLE
Number of Number of
Shares Shares Available
Beneficially For Sale
Name Owned Percent Hereunder
- ------ ------------ ------- ----------------
Durlow, Stig ...................... 630,000 1.9% 165,000
Peterson, Lars-Goran .............. 232,000 * 100,000
Lillienberg, Mats ................. 180,000 * 50,000
Joelsson, Carl .................... 50,000 * 50,000
Ekholtz, Per-Olof ................. 49,995 * 25,000
- -----------
* Less than 1%.
PLAN OF DISTRIBUTION
The Shares offered hereby are being sold by the Selling Stockholders for
their own account. The Company will not receive any of the proceeds from this
offering.
It is anticipated that the Selling Stockholders may from time to time
make sales of all or part of the Shares of Common Stock covered by this
Prospectus in the over-the-counter market, by block trading, in negotiated
transactions, or otherwise at prices then prevailing or in private
transactions at negotiated prices. In addition to sales under this
Prospectus, the Selling Stockholders also may effect sales of Shares of Common
Stock covered by this Prospectus pursuant to Rule 144 promulgated under the
Act. All the foregoing transactions will be made without payment of any
underwriting commissions or discounts, other than the customary brokers' fees
normally paid in connection with such transactions. The Selling Stockholders
will have the right to withdraw the offered Shares prior to sale. There is no
present plan of distribution.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby will be passed
upon by Tannenbaum Dubin & Robinson, LLP, New York, New York. As of December
10, 1999, Marvin S. Robinson, the Secretary of the Company and a member of
Tannenbaum Dubin & Robinson, LLP, and Lincoln W. Briggs and Alan I. Brown,
both members of Tannenbaum Dubin & Robinson, LLP, owned in the aggregate
13,800 shares of the Company's Common Stock having a market value on such date
of $78,919.
EXPERTS
The financial statements of the Company included in the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1999, are incorporated
herein by reference, and audited financial statements to be included in
subsequently filed documents will be incorporated herein, in reliance on the
report of Ohrlings Coopers & Lybrand AB, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Commission are incorporated by
reference in this Prospectus:
(a) The Company's Registration Statement on Form S-8 (File No.81905)
filed on June 30, 1999.
(b) The Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1999;
(c) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended July 31, 1999, and October 31, 1999;
(d) The description of securities to be registered contained in the
Company's Registration Statement on Form 8-A, filed on September 13, 1996; and
(e) All documents subsequently filed with the Commission by Securities
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act of 1934, as amended, prior to the filing of a post-effective amendment
which indicates that all securities offered herein have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Section 145 of the GCL gives Delaware corporations the power to indemnify
each of their present and former officers or directors under certain
circumstances, if such person acted in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interest of the
corporation.
(b) The Amended and Restated Certificate of Incorporation of the Company
contains provisions that eliminate the personal liability of each director to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except (i) for breaches of such director's duty of loyalty
to the Company or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the GCL or (iv) for any transaction from which such
director derived an improper personal benefit.
(c) The Amended and Restated Certificate of Incorporation of the Company
contains provisions to the general effect that each director and officer shall
be indemnified by the Company against liabilities and expenses in connection
with any threatened, pending or contemplated legal proceedings to which he may
be made a party or with which he may become involved by reason of being or
having been an officer or director of the Company or of any other organization
at the request of the Company. Indemnification is available only if it is
determined to be proper by the majority of disinterested directors
constituting a quorum, by the stockholders, or by independent legal counsel in
a written option. In order to be entitled to indemnification, the indemnified
person must have acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect
to any criminal action or proceedings, had no reasonable cause to believe his
conduct was unlawful. In the case of an action by or in the right of the
Company, indemnification is precluded if such person has been adjudged to be
liable, unless and only to the extent that the Court of Chancery of the State
of Delaware or the court in which the action was brought shall determine that
indemnification is proper. The Company also has the power to obtain insurance
indemnifying officers and directors of the Company against any liability which
it may deem proper, whether or not the Company would otherwise have the power
to indemnify such officer or director pursuant to its Amended and Restated
Certificate of Incorporation.
The Company maintains, on behalf of its directors and officers, insurance
protection against certain liabilities arising out of the discharge of their
duties and also insurance covering the Company against indemnification
payments to its directors and officers for certain liabilities.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company
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 Company 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 Act and will be governed by the
final adjudication of such issue.
==============================================================================
No dealer, salesperson or any other person has been authorized to give
any information or to make any representations not contained in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or the Selling
Stockholders. This Prospectus does not constitute an offer to sell, or
solicitation of an offer to sell, any securities other than the registered
securities to which it relates, or an offer to or solicitation of any person
in any jurisdiction where such an offer or solicitation would be unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create an implication that the information contained
herein is correct as of any time subsequent to the date hereof.
-------------------
TABLE OF CONTENTS
Page
----
Available Information....................................... __
The Company................................................. __
Risk Factors................................................ __
Use of Proceeds............................................. __
The Selling Stockholders.................................... __
Plan of Distribution........................................ __
Legal Matters............................................... __
Experts..................................................... __
Incorporation of Certain Information by Reference........... __
Indemnification of Directors and Officers................... __
-------------------
==============================================================================
390,000 Shares
INDUSTRI-MATEMATIK
INTERNATIONAL CORP.
Common Stock
----------
PROSPECTUS
----------
December 17, 1999
==============================================================================
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company,
Industri-Matematik International Corp., certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, on this 17th day of December,
1999.
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
By: /s/ STIG G. DURLOW
---------------------------------
Stig G. Durlow
Chairman, President and
Chief Executive Officer
<PAGE>
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of Industri-Matematik
International Corp., hereby severally continue and appoint Stig G. Durlow,
Karl Asp, and Marvin S. Robinson and each of them singly, our true and lawful
attorneys, with full power to them and each of them singly, to sign for us in
our names in the capacities indicated below, any amendments to this
Registration Statement on Form S-8 (including post-effective amendments), and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, and generally to do all
things in our names and on our behalf in our capacities as officers and
directors to enable Industri-Matematik International Corp. to comply with the
provisions of the Securities Act of 1933, as amended, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys, or any
of them, to said Registration Statement and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- ---------- ----- ----
/s/ STIG G. DURLOW Chairman of the Board of December 17, 1999
- --------------------------- Directors, President and Chief
Stig. G. Durlow Executive Officer (Principal
Executive Officer)
/s/ JEFFREY A. HARRIS Director December 17, 1999
- -----------------------
Jeffrey A. Harris
/s/ WILLIAM H. JANEWAY Director December 17, 1999
- -----------------------
William H. Janeway
/s/ MARTIN LEIMDORFER Director December 17, 1999
- -----------------------
Martin Leimdorfer
/s/ KARL ASP Treasurer and Chief Financial December 17, 1999
- ----------------------- Officer (Principal Financial
Karl Asp and Accounting Officer)
/s/ GEOFFREY W. SQUIRE Director December 17, 1999
- -----------------------
Geoffrey W. Squire
<PAGE>
Exhibit Index
-------------
Sequential
Exhibit Numbered
Number Description Page
- - ------- ----------- ----
4.1 Form of Amended and Restated
Certificate of Incorporation of the
Registrant (filed as Exhibit 3.2 to the
Registrant's Registration Statement on
Form S-1, File No. 333-5495, and
incorporated herein by reference).
4.2 Form of Restated By-Laws of the
Registrant (filed as Exhibit 3.4 to the
Registrant's Registration Statement on
Form S-1, File No. 333-5495, and
incorporated herein by reference)
4.3 Specimen certificate representing the
Common Stock of the Registrant (filed
as Exhibit 4.1 to the Registrant's
Registration Statement on Form S-1,
File No. 333-5495, and incorporated
herein by reference).
4.4 Form of Agreements of Restricted Stock
Program of the Registrant (filed as
Exhibit 10.4 to the Registrant's
Registration Statement on Form S-1,
File No. 333-5495 and incorporated
herein by reference).
5.1 Opinion of Tannenbaum Dubin &
Robinson, LLP
23.1 Consent of Tannenbaum Dubin &
Robinson, LLP(contained in Exhibit
5.1).
23.2 Consent of Ohrlings PricewaterhouseCoopers AB
24.1 Power of Attorney (included as part of
the signature page to this Registration
Statement).
EXHIBIT 5.1
[TANNENBAUM DUBIN & ROBINSON, LLP]
December 17, 1999
Industri-Matematik International Corp.
901 Market Street
Suite 475
Wilmington, Delaware 19801
Re: Registration Statement on Form S-8 Relating to the
Industri-Matematik International Corp. Restricted
Stock Program ("Plan")
---------------------------------------------------
Gentlemen:
This opinion is submitted in connection with the Registration Statement
on Form S-8 ("Registration Statement") filed by Industri-Matematik
International Corp. ("Company") on the date hereof with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
50,000 shares of Common Stock, $.01 par value, of the Company issued or
issuable pursuant to the Plan.
We have examined such corporate documents and records of the Company,
certificates of public officials, and such other documents and questions of law
as we have deemed necessary or appropriate for the purpose of rendering this
opinion.
In examining the foregoing, we have assumed, without independent
verification, the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to original documents
of documents submitted to us as certified or photostatic copies. While nothing
has been brought to our attention which leads us to believe that the opinions
expressed herein are factually incorrect, we have not, beyond the examination
described above, made independent factual investigations for the purpose of
rendering this opinion although we have made such inquiry of officers of the
Company as we have deemed necessary for the proper discharge of our
responsibilities as counsel to the Company and for the purpose of rendering
this opinion.
Notwithstanding anything herein to the contrary, whether expressly stated
or implied, the opinion hereinafter expressed is subject to the following
further qualifications and limitations, whether or not a specific reference is
made in this opinion to such qualifications and limitations:
A. The effect of applicable bankruptcy, insolvency, reorganization,
moratorium, or other similar laws, statutes, or rules of general application
relating to, or affecting, the enforcement of creditors' rights generally, now
or hereafter in effect.
B. As we are admitted to practice only in the State of New York, our
opinion is limited to the laws of the United States and the State of New York
and we offer no opinion as to the possible application of laws of other
jurisdiction, provided that insofar as this opinion relates to matters of
Delaware law, we have relied upon the opinion of Messrs. Hunton & Williams,
Richmond, Virginia.
C. The effect of rules of law governing specific performance and
injunctive relief and such other principles of equity as the courts having
jurisdiction may apply at their discretion whether in a proceeding at law or in
equity.
Based upon the foregoing and upon such other information, documents, and
inquiry as we believe necessary to enable us to render this opinion, we are of
the opinion that the 50,000 shares of Common Stock issued under the Industri-
Matematik International Corp. Restricted Stock Program have been duly
authorized and are validly issued, fully paid, and non-assessable.
As of December 10, 1999, Marvin S. Robinson, the Secretary of the Company
and a member of this firm, and Lincoln W. Briggs and Alan I. Brown, both
members of this firm, owned in the aggregate 13,800 shares of the Company's
Common Stock having a market value on such date of $78,919.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Respectfully submitted,
/s/ Tannenbaum Dubin & Robinson, LLP
-------------------------------------
TANNENBAUM DUBIN & ROBINSON, LLP
EXHIBIT 23.2
CONSENT OF OHRLINGS PRICEWATERHOUSECOOPERS AB,
INDEPENDENT AUDITORS
We consent to the inclusion in this Registration Statement on Form S-8
of our report dated July 29, 1999, on our audits of the consolidated financial
statements of Industri-Matematik International Corp. as of April 30, 1998 and
1999 and for the years ended April 30, 1997, 1998, and 1999. We also consent
to the reference to our firm under the caption "Experts".
/s/ Ohrlings PricewaterhouseCoopers AB
--------------------------------------
OHRLINGS PRICEWATERHOUSECOOPERS AB
Stockholm, Sweden
December 15, 1999
