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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 9, 1999.
REGISTRATION NO. 333-90461
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
PEREGRINE SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C>
DELAWARE 95-3773312
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
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12670 HIGH BLUFF DRIVE
SAN DIEGO, CALIFORNIA 92130
(858) 481-5000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
--------------------------
RICHARD T. NELSON
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
PEREGRINE SYSTEMS, INC.
12670 HIGH BLUFF DRIVE
SAN DIEGO, CALIFORNIA 92130
(858) 481-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
DOUGLAS H. COLLOM, ESQ.
ROBERT F. KORNEGAY, ESQ.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
(650) 493-9300
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
SALES TO THE PUBLIC UNDER THIS POST-EFFECTIVE AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT WILL COMMENCE
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS POST-EFFECTIVE AMENDMENT
NO. 1
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 REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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PROSPECTUS
Peregrine Systems, Inc.
12670 High Bluff Drive
San Diego, California 92130
Telephone Number: (858) 481-5000
[LOGO]
333,572 SHARES
COMMON STOCK
These shares may be offered and sold from time to time by certain
stockholders of Peregrine Systems, Inc., PSI, identified in this prospectus. See
"Selling Stockholders." The selling stockholders acquired all of the shares on
October 19, 1999 in connection with PSI's conversion of the entire issued share
capital of Knowlix Corporation into shares of PSI stock pursuant to a merger of
Knowlix with a wholly-owned subsidiary of PSI known as KC Acquisition
Corporation.
The selling stockholders will receive all of the net proceeds from the sale
of the shares. These stockholders will pay all underwriting discounts and
selling commissions, if any, applicable to the sale of the shares. The Company
will not receive any proceeds from the sale of the shares.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.
PSI's common stock is quoted on the Nasdaq National Market under the symbol
"PRGN." On December 8, 1999, the last reported sale price of the common stock
was $89.50 per share.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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DECEMBER 9, 1999
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TABLE OF CONTENTS
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PAGE
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Where To Find Additional Information About PSI.............. 3
Information Incorporated by Reference....................... 3
Forward Looking Information................................. 4
Peregrine Systems, Inc...................................... 5
Risk Factors................................................ 5
Use of Proceeds............................................. 15
Selling Stockholders........................................ 15
Plan of Distribution........................................ 17
Legal Matters............................................... 18
Experts..................................................... 18
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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 PSI 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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WHERE TO FIND ADDITIONAL INFORMATION ABOUT PSI
We file annual, quarterly and special reports, proxy statements, and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms, including locations of regional offices. Our SEC filings are
also available to the public from our Web site at http://www.peregrine.com or at
the SEC's Web site at http://www.sec.gov. Information on our Web site does not
constitute part of this prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below, and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the selling
stockholders sell all the shares. This prospectus is part of a Registration
Statement we filed with the SEC (Registration No. 333-90461). The documents we
incorporate by reference are:
1. Our Annual Report on Form 10-K for the fiscal year ended March 31, 1999;
2. Our Current Report on Form 8-K dated April 16, 1999 relating to the
acquisition of F Print UK, Limited; and as amended on Form 8-K/A dated
May 18, 1999.
3. Our Current Report on Form 8-K/A dated May 11, 1999 relating to the
restatement of the our financial statements.
4. Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1999.
The description of our common stock contained in the Registration Statement on
Form 8-A as filed with the SEC on March 7, 1997.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: General Counsel, Peregrine
Systems, Inc., 12670 High Bluff Drive, San Diego, California 92130; telephone
number (858) 481-5000.
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FORWARD LOOKING INFORMATION
This prospectus, including the information incorporated by reference herein,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. These forward-looking
statements include, but are not limited to, statements about our plans,
objectives, expectations and intentions and other statements contained in the
prospectus that are not historical facts. When used in this prospectus, the
words "expects," "anticipates," "estimates" and similar expressions are intended
to identify forward-looking statements. Because these forward-looking statements
involve risks and uncertainties, there are important facts that could cause
actual results to differ materially from those expressed or implied by these
forward-looking statements, including statements under the caption "Risk
Factors." Our actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth below. In
particular, please review the sections captioned "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our annual report
on Form 10-K for the fiscal year ended March 31, 1999, and our quarterly report
on Form 10-Q for the quarter ended September 30, 1999, which reports are
incorporated herein by reference and such section of any subsequently filed
Exchange Act reports. In connection with forward-looking statements which appear
in these disclosures, prospective purchasers of the shares offered hereby should
carefully consider the factors set forth in this prospectus under "Risk
Factors."
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PEREGRINE SYSTEMS, INC.
We provide enterprise infrastructure management application software. The
objective of our infrastructure management strategy is to provide organizations
control over their infrastructure assets and related information throughout the
asset life cycle. Our applications enable customers to maximize the availability
of assets, minimize investments and expenses, consolidate enterprise data, and
interface to enterprise applications. We develop, market, and support an
integrated suite of applications that automates the management of complex,
enterprise-wide information and infrastructure assets. Our main product suites,
SERVICECENTER and ASSETCENTER, are designed to address the enterprise service
desk and asset management requirements of large organizations. These product
suites can be deployed across all major hardware platforms and network operating
systems and protocols. Each utilizes advanced client/server and intelligent
agent technologies and a modular architecture. To optimize performance and
minimize costs, the SERVICECENTER and ASSETCENTER product suites are intended to
provide organizations a single view of all elements of their infrastructure.
RISK FACTORS
PROSPECTIVE INVESTORS ARE CAUTIONED THAT THE STATEMENTS IN THIS PROSPECTUS
OR IN DOCUMENTS INCORPORATED BY REFERENCE HEREIN THAT ARE NOT DESCRIPTIONS OF
HISTORICAL FACTS MAY BE FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO RISKS AND
UNCERTAINTIES. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE CURRENTLY
ANTICIPATED BECAUSE OF A NUMBER OF FACTORS, INCLUDING THOSE IDENTIFIED HEREIN
UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS OR IN DOCUMENTS
INCORPORATED BY REFERENCE HEREIN.
WE HAVE A HISTORY OF LOSSES, WE CANNOT PREDICT OUR FUTURE OPERATING RESULTS AND
WE CANNOT ASSURE OUR CONTINUED PROFITABILITY.
Through September 30, 1999, we have recorded cumulative net losses of
approximately $46.9 million, including approximately $40.0 million related to
the write-off of acquired in-process research and development in connection with
acquisitions. Our applications have changed substantially since the mid-1990s.
In addition, we have acquired or developed a significant number of applications
in the last three years, bringing our total number of applications to more
than 20. As a result, prediction of our future operating results is difficult,
if not impossible. Although we achieved profitability during the years ended
March 31, 1998 and 1999 and the six months ended September 30, 1999 (excluding
the impact of the $40.0 million charge related to acquired in-process research
and development in connection with acquisitions), there can be no assurance that
we will be able to remain profitable on a quarterly or annual basis. In
addition, we do not believe that the growth in revenues we have experienced in
recent years is indicative of future revenue growth or future operating results.
FUTURE FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS DUE TO A NUMBER OF
FACTORS, MANY OF WHICH ARE BEYOND OUR CONTROL, COULD ADVERSELY AFFECT OUR STOCK
PRICE.
Our quarterly operating results have varied significantly in the past and
may vary significantly in the future depending upon a number of factors, many of
which are beyond our control. These factors include, among others, our ability
to develop, introduce and market new and enhanced versions of our software on a
timely basis; market demand for the Company's software; the size, timing and
contractual terms of significant orders; the timing and significance of new
software product announcements or releases by PSI or our competitors; changes in
our pricing policies or our competitors; changes in our business strategies;
budgeting cycles of our potential customers; changes in the mix of software
products and services sold; reliance on indirect sales forces like systems
integrators and channels; changes in the mix of revenues attributable to
domestic and international sales; the impact of acquisitions of competitors;
seasonal trends; the cancellations of licenses or maintenance agreements;
product life cycles; software defects and other product quality problems; and
personnel changes. We have often recognized a substantial portion of our
revenues in the last month or weeks of a quarter. As a result,
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license revenues in any quarter are substantially dependent on orders booked and
shipped in the last month or weeks of that quarter. Due to the foregoing
factors, quarterly revenues and operating results are not predictable with any
significant degree of accuracy. In particular, the timing of revenue recognition
can be affected by many factors, including the timing of contract execution and
delivery. The timing between initial customer contact and fulfillment of
criteria for revenue recognition can be lengthy and unpredictable, and revenues
in any given quarter can be adversely affected as a result of such
unpredictability. In the event of any downturn in potential customers'
businesses or the economy in general, planned purchases of our products may be
deferred or canceled, which could have a material adverse effect on our
business, operating results and financial condition.
OUR SALES CYCLE IS LONG AND UNPREDICTABLE, AND POTENTIAL DELAYS IN THE CYCLE
MAKE OUR REVENUES SUSCEPTIBLE TO FLUCTUATIONS.
The licensing of our software generally requires us to engage in a sales
cycle that typically takes approximately six to nine months to complete. The
length of the sales cycle may vary depending on a number of factors over which
we may have little or no control, including the size of the transaction and the
level of competition which we encounter in our selling activities. During the
sales cycle, we typically provide a significant level of education to
prospective customers regarding the use and benefits of our products. Any delay
in the sales cycle of a large license or a number of smaller licenses could have
a material adverse effect on our business, operating results and financial
condition.
SEASONAL TRENDS IN SALES OF OUR SOFTWARE PRODUCTS MAY AFFECT OUR QUARTERLY
OPERATING RESULTS.
Our business has experienced and is expected to continue to experience
seasonality. Our revenues and operating results in our December quarter
typically benefit from purchase decisions made by the large concentration of
customers with calendar year-end budgeting requirements, while revenues and
operating results in the March quarter typically benefit from the efforts of our
sales force to meet fiscal year-end sales quotas. In addition, we are currently
attempting to expand our presence in international markets, including Europe,
the Pacific Rim, and Latin America. International revenues comprise a
significant percentage of our total revenues, and we may experience additional
variability in demand associated with seasonal buying patterns in such foreign
markets.
OUR PAST ACQUISITIONS OF OTHER BUSINESSES AND POTENTIAL FUTURE ACQUISITIONS
PRESENT RISKS WHICH COULD ADVERSELY AFFECT OUR BUSINESS.
Since September 1997, we have completed six acquisitions. In the future, PSI
may make acquisitions of, or large investments in, other businesses that offer
products, services, and technologies that further our goal of providing
integrated infrastructure management software solutions to businesses. Past
acquisitions and any future acquisitions or investments that we may complete
present risks commonly encountered with these types of transactions. The
following are examples of such risks:
- difficulty in combining the technology, operations, or work force of the
acquired business
- disruption of on-going businesses
- difficulty in realizing the potential financial and strategic position of
PSI through the successful integration of the acquired business
- difficulty in maintaining uniform standards, controls, procedures, and
policies
- possible impairment of relationships with employees and clients as a
result of any integration of new businesses and management personnel
- difficulty in adding significant numbers of new employees, including
training, evaluation, and coordination of effort of all employees towards
our corporate mission
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- diversion of management attention
- difficulty in obtaining preferred acquisition accounting treatment for
these types of transactions; likelihood that future acquisitions will
require purchase accounting resulting in increased intangible assets and
goodwill, substantial amortization of such assets and goodwill, and a
negative impact on reported earnings
- potential dilutive effect on earnings
The risks described above, either individually or in the aggregate, could
materially adversely affect our business, operating results, and financial
condition. Future acquisitions, if any, could provide for consideration to be
paid in cash, shares of PSI common stock, or a combination of cash and PSI
common stock. However, we may not be able to complete any such future
acquisitions.
IF THE MARKET FOR OUR INFRASTRUCTURE MANAGEMENT SOFTWARE SOLUTIONS DOES NOT
CONTINUE TO DEVELOP AS WE ANTICIPATE, OUR ABILITY TO GROW OUR BUSINESS AND SELL
OUR PRODUCTS WILL BE ADVERSELY AFFECTED.
Until recently, our product strategy has focused on integrating a broad
array of IT management applications with other traditional internal help desk
applications to create an Enterprise Service Desk capable of managing multiple
aspects of an enterprise's IT structure. In recent years, we have broadened our
product line beyond traditional IT infrastructure management to offer a more
comprehensive product suite capable of managing a business enterprise's IT
infrastructure, physical plant and facilities, communications infrastructure,
distribution systems and fleets.
In recent years, the market for enterprise software solutions has been
characterized by rapid technological change, frequent new product announcements
and introductions, and evolving industry standards. In response to advances in
technology, customer requirements have become increasingly complex, resulting in
industry consolidation of product lines offering similar or related
functionality. In particular, we believe that a market for integrated
enterprise-wide infrastructure management solutions, including applications for
IT management, asset management, building and facilities management,
communications resource management, distribution systems management and fleet
management, is evolving from existing requirements for specific IT management
solutions. However, the existence of such a market is unproven. If such a market
does not fully develop, this could have a materially adverse effect on our
business, results of operations, and financial condition. Regardless of the
development of a market for integrated infrastructure management solutions,
factors adversely affecting the pricing of, demand for, or market acceptance of
one or more of our infrastructure management applications could have a material
adverse effect on our business, results of operations, and financial condition.
IF WE DO NOT RESPOND ADEQUATELY TO OUR INDUSTRY'S EVOLVING TECHNOLOGY STANDARDS
OR DO NOT CONTINUE TO MEET THE SOPHISTICATED NEEDS OF OUR CUSTOMERS, SALES OF
OUR PRODUCTS MAY DECLINE.
As a result of rapid technological change in our industry, our position in
existing markets or other markets that we may enter can be eroded rapidly by
product advances. The life cycles of our products are difficult to estimate. Our
growth and future financial performance depend in part upon our ability to
improve existing products and develop and introduce new products that keep pace
with technological advances, meet changing customer needs, and respond to
competitive products. Our product development efforts will continue to require
substantial investments. We may not have sufficient resources to make the
necessary investments.
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OUR SENIOR MANAGEMENT AND OTHER KEY PERSONNEL ARE CRITICAL TO OUR BUSINESS, AND
IF THEY CHOOSE TO LEAVE PSI, IT COULD HARM OUR BUSINESS.
Our success will depend to a significant extent on the continued service of
our senior management and certain other key employees, including selected sales,
consulting, technical and marketing personnel. Few of our employees, including
senior management, are bound by an employment or noncompetition agreement. In
addition, we do not generally maintain key man life insurance on any employee.
The loss of the services of one or more of our executive officers or key
employees or the decision of one or more such officers or employees to join a
competitor or otherwise compete directly or indirectly with us could have a
material adverse effect on our business, operating results and financial
condition.
WE WILL NEED TO RECRUIT AND RETAIN ADDITIONAL QUALIFIED PERSONNEL TO
SUCCESSFULLY GROW OUR BUSINESS.
Our future success will likely depend in large part on our ability to
attract and retain additional highly skilled technical, sales, management, and
marketing personnel. Competition for such personnel in the computer software
industry is intense, and in the past we have experienced difficulty in
recruiting qualified personnel. New employees generally require substantial
training in the use of our products. We may not succeed in attracting and
retaining such personnel. If we do not, our business, operating results, and
financial condition could be materially adversely affected.
FUTURE CHANGES IN THE FEDERAL IMMIGRATION LAWS COULD LIMIT OUR ABILITY TO
RECRUIT AND EMPLOY SKILLED TECHNICAL PROFESSIONALS FROM OTHER COUNTRIES, AND
THIS COULD ADVERSELY AFFECT OUR BUSINESS AND OPERATING RESULTS.
To achieve our business objectives, we must be able to recruit and employ
skilled technical professionals from other countries. Any future shortage of
qualified technical personnel who are either United States citizens or otherwise
eligible to work in the United States could increase our reliance on foreign
professionals. Many technology companies have already begun to experience
shortages of such personnel. Any failure to attract and retain qualified
personnel as necessary could materially adversely affect our business and
operating results. Foreign computer professionals such as those employed by us
typically become eligible for employment in the United States by obtaining a
nonimmigrant visa. The number of nonimmigrant visas is limited by federal
immigration law. Currently, Congress is considering approving an increase in the
number of visas available. We cannot predict whether such legislation will
ultimately become law. We also cannot predict what effect any future changes in
the federal immigration laws will have on our business, operating results, or
financial condition.
NEW PRODUCT INTRODUCTIONS AND THE ENHANCEMENT OF EXISTING PRODUCTS BY OUR
COMPETITORS COULD ADVERSELY AFFECT OUR ABILITY TO SELL OUR PRODUCTS.
The market for our products is highly competitive and diverse. The
technology for infrastructure management software products can change rapidly.
New products are frequently introduced and existing products are continually
enhanced. Competitors vary in size and in the scope and breadth of the products
and services offered.
We have faced competition from a number of sources, including:
- providers of internal help desk software applications such as Remedy
Corporation and Software Artistry (now a division of Tivoli Systems)
- customer interaction software companies such as Clarify and The Vantive
Corporation, whose products include internal help desk applications
- information technology and systems management companies such as IBM,
Computer Associates International, Network Associates, and Hewlett-Packard
Company
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- providers of asset management and facilities management software
- the internal information technology departments of those companies with
infrastructure management needs
Some of our current and many of our potential competitors have much greater
financial, technical, marketing, and other resources than PSI has. As a result,
they may be able to respond more quickly to new or emerging technologies and
changes in customer needs. They may also be able to devote greater resources to
the development, promotion, and sale of their products than we can. We may not
be able to compete successfully against current and future competitors. In
addition, competitive pressures faced by PSI may materially adversely affect our
business, operating results, and financial condition.
NEW COMPETITORS AND ALLIANCES AMONG EXISTING COMPETITORS COULD IMPAIR OUR
ABILITY TO RETAIN AND EXPAND OUR MARKET SHARE.
Because competitors can easily penetrate the software market, we anticipate
additional competition from other established and new companies as the market
for enterprise infrastructure management applications develops. In addition,
current and potential competitors have established or may in the future
establish cooperative relationships among themselves or with third parties.
Large software companies may acquire or establish alliances with our smaller
competitors. We expect that the software industry will continue to consolidate.
It is possible that new competitors or alliances among competitors may emerge
and rapidly acquire significant market share.
SYSTEM MANAGEMENT COMPANIES MAY ACQUIRE INFRASTRUCTURE MANAGEMENT AND/OR HELP
DESK SOFTWARE PROVIDERS AND CLOSE THEIR SYSTEMS TO OUR PRODUCTS, WHICH COULD
HURT OUR ABILITY TO SELL OUR PRODUCTS.
Our ability to sell our products depends in part on their compatibility with
and support by providers of system management products, including Tivoli,
Computer Associates, and Hewlett-Packard. Both Tivoli and Hewlett-Packard have
recently acquired providers of help desk software products. These providers of
system management products may decide to close their systems to competing
vendors like us. They may also decide to bundle their infrastructure management
and/or help-desk software products with other products for enterprise licenses
for promotional purposes or as part of a long-term pricing strategy. If that
were to happen, our ability to sell our products could be adversely affected.
Increased competition may result from acquisitions of help desk and other
infrastructure management software vendors by system management companies. The
results of increased competition, including price reductions of our products,
reduced gross margins, and reduction of market share, could materially adversely
affect our business, operating results, and financial condition.
WE HAVE EXPERIENCED SIGNIFICANT GROWTH IN OUR BUSINESS IN RECENT PERIODS, AND
OUR ABILITY TO MANAGE THIS GROWTH AND ANY FUTURE GROWTH WILL AFFECT OUR ABILITY
TO ACHIEVE AND MAINTAIN PROFITABILITY.
We have grown significantly in recent periods, with total revenues
increasing from $35.0 million in fiscal 1997, to $61.9 million in fiscal 1998,
and to $138.1 million in fiscal 1999.
If we achieve our growth plans, including the integration of technology
acquired in acquisitions, such growth may burden our operating and financial
systems. This burden will require large amounts of senior management attention
and will require the use of other PSI resources. Our ability to compete
effectively and to manage future growth (and our future operating results) will
depend in part on our ability to implement and expand operational, customer
support, and financial control systems and to expand, train, and manage our
employees. In particular, in connection with acquisitions, we will be required
to integrate additional personnel and to augment or replace existing financial
and management systems. Such integration could disrupt our operations and could
adversely affect our financial results. We may not be able to augment or improve
existing systems and controls or
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implement new systems and controls in response to future growth, if any. Any
failure to do so could materially adversely affect our business, operating
results, and financial condition.
RISKS ASSOCIATED WITH CAPITAL COMMITMENT, CONSTRUCTION OVERSIGHT, AND MOVING OF
PERSONNEL AND FACILITIES ARISING OUT OF OUR JUNE 1999 LEASES FOR OFFICE SPACE
COULD RESULT IN PROBLEMS WHICH HARM OUR BUSINESS.
In June 1999, we entered into a series of leases providing approximately
540,000 square feet of office space, including an option for approximately
118,000 square feet of space. Even excluding the exercise of the option, the
leases require minimum lease payments of approximately $124 million over the
terms of the leases, approximately twelve years. This office space (including
the option) is intended for a five building campus setting in San Diego,
California. We took possession of the first building in October 1999.
Construction has commenced on the second building, and the final building is
scheduled for delivery in 2003. The capital commitments, construction oversight,
and moving of personnel and facilities involved in a transaction of this type
and magnitude present numerous risks involving estimation of future events and
execution of the transaction. Examples of the risks involved include: failure to
properly estimate the growth of our business in the future; inability to
sublease excess office space that may result; disruption of operations; and
inability to match substantially-fixed lease payments with fluctuating revenues.
WE WILL NEED TO EXPAND OUR DISTRIBUTION CHANNELS IN ORDER TO DEVELOP OUR
BUSINESS AND INCREASE REVENUE.
We sell our products through our direct sales force and a limited number of
distributors and we provide maintenance and support services through our
technical and customer support staff. We plan to continue to invest large
amounts of resources to our direct sales force, particularly in North America
where we have recently opened several new sales offices. In addition, we are
developing additional sales and marketing channels through system integrators,
original equipment manufacturers, and other channel partners. We may not be able
to attract channel partners that will be able to market our products effectively
or that will be qualified to provide timely and cost-effective customer support
and service. If we establish distribution through such indirect channels, our
agreements with channel partners may not be exclusive. As a result, such channel
partners may also carry competing product lines. If we do not establish and
maintain such distribution relationships, this could materially adversely affect
our business, operating results, and financial condition.
THE INTENDED EXPANSION OF OUR INTERNATIONAL OPERATIONS INVOLVES RISKS WHICH
COULD ADVERSELY AFFECT OUR BUSINESS.
International sales represented approximately 36% of our total revenue both
in fiscal 1998 and fiscal 1999. We currently have international sales offices in
Utrecht, Brussels, Stockholm, Copenhagen, Frankfurt, London, Paris, Singapore,
Tokyo, Milan, Rome and Sydney. Our continued growth and profitability will
require continued expansion of our international operations, particularly in
Europe, Latin America, and the Pacific Rim. Accordingly, we intend to expand our
current international operations and enter additional international markets.
Such expansion will require significant management attention and financial
resources. We have only limited experience in developing local-language versions
of our products and marketing and distributing our products internationally. We
may not be able to successfully translate, market, sell and deliver our products
internationally. If we are unable to expand our international operations
successfully and in a timely manner, our business, operating results, and
financial condition could be adversely affected.
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THE SUCCESS OF OUR INTERNATIONAL OPERATIONS IS DEPENDENT UPON MANY FACTORS WHICH
COULD ADVERSELY AFFECT OUR ABILITY TO SELL OUR PRODUCTS INTERNATIONALLY AND
COULD AFFECT OUR PROFITABILITY.
Our international operations are subject to a variety of risks associated
with conducting business internationally, including the following:
- fluctuations in currency exchange rates
- longer payment cycles
- difficulties in staffing and managing international operations
- problems in collecting accounts receivable
- seasonal reductions in business activity during the summer months in
Europe and certain other parts of the world
- increases in tariffs, duties, price controls, or other restrictions on
foreign currencies
- trade barriers imposed by foreign countries
These factors could materially adversely affect our business, operating
results, and financial condition. Furthermore, recent instability in the
Asian-Pacific economies and financial markets could adversely affect our
business, operating results, and financial condition in future quarters as well.
AS OUR EXPANDING INTERNATIONAL OPERATIONS IN EUROPE AND THE ASIA-PACIFIC REGION
ARE INCREASINGLY CONDUCTED IN CURRENCIES OTHER THAN THE U.S. DOLLAR,
FLUCTUATIONS IN THE VALUE OF FOREIGN CURRENCIES COULD RESULT IN CURRENCY
EXCHANGE LOSSES.
A large portion of our business is conducted in foreign currencies.
Fluctuations in the value of foreign currencies relative to the U.S. dollar have
caused and will continue to cause currency transaction gains and losses. We
cannot predict the effect of exchange rate fluctuations upon future operating
results. We may experience currency losses in the future. We currently maintain
a foreign exchange hedging program, consisting principally of purchases of one
month forward-rate currency contracts. However, our hedging activities may not
adequately protect us against the risks associated with foreign currency
fluctuations.
ISSUES RELATED TO THE INTRODUCTION OF THE EURO AS THE CURRENCY OF CERTAIN MEMBER
STATES OF THE EUROPEAN ECONOMIC COMMUNITY MAY ADVERSELY IMPACT OUR PRODUCTS.
On January 1, 1999, certain member states of the European Economic
Community, the EEC, fixed their respective currencies to a new currency, the
euro. On that date, the euro became a functional legal currency within these
countries. During the three years beginning on January 1, 1999, business in
these EEC member states will be conducted in both the existing national
currencies, such as the French franc or deutsche mark, and the euro. Companies
operating in or conducting business in EEC member states will need to ensure
that their financial and other software systems are capable of processing
transactions and properly handling the existing currencies, as well as the euro.
Our AssetCenter product was originally developed for the European market and is
capable of managing currency data measured in euros. We are still assessing the
impact that the euro will have on our internal systems and our other products.
We will take corrective actions based on the results of such assessment. We have
not yet determined the costs related to this problem. Issues related to the
introduction of the euro may materially adversely affect our business, operating
results, and financial condition.
11
<PAGE>
BECAUSE PSI'S OFFICERS AND DIRECTORS OWN A LARGE PORTION OF PSI COMMON STOCK,
THEY WILL BE ABLE TO CONTROL MOST MATTERS REQUIRING STOCKHOLDER APPROVAL, AND
THIS MAY PREVENT OR DISCOURAGE POTENTIAL BIDS TO ACQUIRE PSI.
Based on shares outstanding as of October 31, 1999, PSI's officers,
directors, and entities directly related to such individuals together
beneficially own approximately 21.44% of the outstanding shares of PSI common
stock. In particular, John J. Moores, Chairman of PSI's board of directors, owns
approximately 16.15% of the outstanding shares. As a result, PSI's officers and
directors will be able to control most matters requiring stockholder approval,
including the election of directors and the approval of mergers, consolidations,
and sales of all or substantially all of the assets of PSI. Such concentrated
share ownership may prevent or discourage potential bids to acquire PSI unless
the terms of acquisition are approved by such officers and directors.
WE MAY EXPERIENCE DELAYS IN DEVELOPING OUR PRODUCTS THAT COULD ADVERSELY AFFECT
OUR ABILITY TO INTRODUCE NEW PRODUCTS, MAINTAIN OUR COMPETITIVE POSITION AND
GROW OUR BUSINESS.
We have experienced product development delays in the past and may
experience delays in the future. Difficulties in product development could delay
or prevent the successful introduction or marketing of new or improved products.
Any such new or improved products may not achieve market acceptance. Our current
or future products may not conform to industry requirements. If, for
technological or other reasons, we are unable to develop and introduce new and
improved products in a timely manner, our business, operating results, and
financial condition could be adversely affected.
ERRORS IN OUR PRODUCTS COULD RESULT IN SIGNIFICANT COSTS TO US AND COULD IMPAIR
OUR ABILITY TO SELL OUR PRODUCTS.
Because our software products are complex, these products may contain errors
that could be detected at any point in a product's life cycle. In the past, we
have discovered software errors in certain of our products and have experienced
delays in shipment of our products during the period required to correct these
errors. Despite testing by PSI and by current and potential customers, errors in
our products may be found in the future. Detection of such errors may result in,
among other things, loss of, or delay in, market acceptance and sales of our
products, diversion of development resources, injury to our reputation, or
increased service and warranty costs. If any of these results were to occur, our
business, operating results, and financial condition could be materially
adversely affected.
IF WE FAIL TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, COMPETITORS MAY BE ABLE
TO USE OUR TECHNOLOGY OR TRADEMARKS AND THIS COULD WEAKEN OUR COMPETITIVE
POSITION, REDUCE OUR REVENUE AND INCREASE COSTS.
Our success will be heavily dependent upon proprietary technology. We rely
primarily on a combination of copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect our proprietary
rights. Such laws provide only limited protection. Despite precautions that we
take, it may be possible for unauthorized third parties to copy aspects of our
current or future products or to obtain and use information that we regard as
proprietary. In particular, we may provide our licensees with access to our data
model and other proprietary information underlying our licensed applications.
Such means of protecting our proprietary rights may not be adequate.
Additionally, our competitors may independently develop similar or superior
technology. Policing unauthorized use of software is difficult and, while we do
not expect software piracy to be a persistent problem, some foreign laws do not
protect our proprietary rights to the same extent as United States laws.
Litigation may be necessary in the future to enforce our intellectual property
rights, to protect our trade secrets, or to determine the validity and scope of
the proprietary rights of others. Litigation could result in substantial costs
and diversion of resources, and could materially adversely affect our business,
operating results, and financial condition.
12
<PAGE>
THIRD PARTIES COULD ASSERT, FOR COMPETITIVE OR OTHER REASONS, THAT OUR PRODUCTS
INFRINGE THEIR INTELLECTUAL PROPERTY RIGHTS, AND SUCH CLAIMS COULD INJURE OUR
REPUTATION, CONSUME TIME AND MONEY, AND ADVERSELY AFFECT OUR ABILITY TO SELL OUR
PRODUCTS.
While we are not aware that any of our software product offerings infringe
the proprietary rights of third parties, third parties may claim infringement
with respect to our current or future products. We expect that software product
developers will increasingly be subject to infringement claims as the number of
products and competitors in the software industry segment grows and the
functionality of products in different industry segments overlaps. Any such
claims, with or without merit, could be time consuming, result in costly
litigation, cause product shipment delays, or require us to enter into royalty
or licensing agreements. Royalty or licensing agreements may not be available on
acceptable terms or at all. As a result, infringement claims could have a
material adverse affect on our business, operating results, and financial
condition.
WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS THAT COULD RESULT IN SIGNIFICANT
COSTS TO US.
Our license agreements with our customers typically contain provisions
designed to limit exposure to potential product liability claims. Such
limitation of liability provisions may, however, not be effective under the laws
of certain jurisdictions. Although we have not experienced any product liability
claims to date, the sale and support of our products entails the risk of such
claims. We may be subject to such claims in the future. A product liability
claim could materially adversely affect our business, operating results, and
financial condition.
PROVISIONS IN OUR CHARTER DOCUMENTS AND IN DELAWARE LAW MAY DISCOURAGE POTENTIAL
ACQUISITION BIDS FOR PSI AND PREVENT CHANGES IN OUR MANAGEMENT WHICH OUR
STOCKHOLDERS FAVOR.
Certain provisions of PSI's charter documents eliminate the right of
stockholders to act by written consent without a meeting and specify certain
procedures for nominating directors and submitting proposals for consideration
at stockholder meetings. Such provisions are intended to increase the likelihood
of continuity and stability in the composition of the PSI board of directors and
in the policies set by the board. These provisions also discourage certain types
of transactions which may involve an actual or threatened change of control
transaction. These provisions are designed to reduce the vulnerability of PSI to
an unsolicited acquisition proposal. As a result, these provisions could
discourage potential acquisition proposals and could delay or prevent a change
in control transaction. These provisions are also intended to discourage certain
tactics that may be used in proxy fights. However, they could have the effect of
discouraging others from making tender offers for PSI's shares. As a result,
these provisions may prevent the market price of PSI common stock from
reflecting the effects of actual or rumored takeover attempts. These provisions
may also prevent changes in the management of PSI.
PSI's board of directors has the authority to issue up to 5,000,000 shares
of preferred stock in one or more series. The board of directors can fix the
price, rights, preferences, privileges, and restrictions of such preferred stock
without any further vote or action by PSI's stockholders. The issuance of
preferred stock allows PSI to have flexibility in connection with possible
acquisitions and other corporate purposes. However, the issuance of shares of
preferred stock may delay or prevent a change in control transaction without
further action by the PSI stockholders. As a result, the market price of the PSI
common stock and the voting and other rights of the holders of PSI common stock
may be adversely affected. The issuance of preferred stock may result in the
loss of voting control to others. PSI has no current plans to issue any shares
of preferred stock.
PSI is subject to the antitakeover provisions of the Delaware General
Corporation Law, which regulates corporate acquisitions. The Delaware law
prevents certain Delaware corporations, including PSI, from engaging, under
certain circumstances, in a "business combination" with any "interested
13
<PAGE>
stockholder" for three years following the date that such stockholder became an
interested stockholder. For purposes of Delaware law, a "business combination"
includes, among other things, a merger or consolidation involving PSI and the
interested stockholder and the sale of more than 10% of PSI's assets. In
general, Delaware law defines an "interested stockholder" as any entity or
person beneficially owning 15% or more of the outstanding voting stock of a
company and any entity or person affiliated with or controlling or controlled by
such entity or person. Under Delaware law, a Delaware corporation may "opt out"
of the antitakeover provisions. PSI has not "opted out" of the antitakeover
provisions of Delaware Law.
OUR STOCK WILL LIKELY BE SUBJECT TO SUBSTANTIAL PRICE AND VOLUME FLUCTUATIONS
WHICH MAY PREVENT STOCKHOLDERS FROM RESELLING THEIR SHARES AT OR ABOVE THE PRICE
AT WHICH THEY PURCHASED THEIR SHARES.
We completed the initial public offering of PSI common stock in April 1997.
Prior to April 1997, no public market existed for PSI common stock. In the past,
the market price of our common stock has varied greatly and the volume of our
common stock traded has fluctuated greatly as well. We expect such fluctuation
to continue. The fluctuation results from a number of factors including:
- any shortfall in revenues or net income from revenues or net income
expected by securities analysts
- announcements of new products by PSI or our competitors
- quarterly fluctuations in our financial results or the results of other
software companies, including those of our direct competitors
- changes in analysts' estimates of our financial performance, the financial
performance of our competitors, or the financial performance of software
companies in general
- general conditions in the software industry
- changes in prices for our products or the products of our competitors
- changes in our revenue growth rates or the growth rates of our competitors
- sales of large blocks of the PSI common stock
- conditions in the financial markets in general
In addition, the stock market may from time to time experience extreme price
and volume fluctuations. Many technology companies, in particular, have
experienced such fluctuations. Often, such fluctuations have been unrelated to
the operating performance of the specific companies. The market price of our
common stock may experience significant fluctuations in the future.
14
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares by the
selling stockholders. All net proceeds from the sale of PSI Common Stock will go
to the stockholders who offer and sell their shares.
SELLING STOCKHOLDERS
The following table sets forth information with respect to the number of
shares of common stock owned by the selling stockholders named below and as
adjusted to give effect to the sale of the shares offered hereby. The
information in the table below is current as of the date of this prospectus. The
shares are being registered to permit public secondary trading of the shares,
and the selling stockholders may offer the shares for resale from time to time.
The shares being offered by the selling stockholders were acquired in
connection with our acquisition of Knowlix. In the acquisition, the shares of
common stock were issued pursuant to an exemption from the registration
requirements of the Securities Act. In connection with the acquisition, we
agreed to register the shares of PSI common stock received by the former
shareholders of Knowlix on the registration statement, of which this prospectus
is a part. None of the selling stockholders owns or will own after the offering
more than 1% of the outstanding common stock of PSI.
Some of the selling stockholders listed below may distribute their
respective shares to their general or limited partners. Such shares may be
offered hereunder by the general or limited partners of a distributing selling
stockholder. Each general or limited partner distributee will be deemed, with
respect to the shares it receives in a distribution, to be a selling stockholder
for purposes of the prospectus.
Shares of common stock subject to options that are currently exercisable or
exercisable within 60 days of October 31, 1999 are treated as outstanding and to
be beneficially owned by the person holding the options for the purpose of
computing the percentage ownership of the person and are listed under the
"Shares Underlying Options" column below, but these options are not treated as
outstanding for the purpose of computing the percentage ownership of any other
person.
The shares offered by this prospectus may be offered from time to time by
the selling stockholders named below:
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO OFFERING AFTER OFFERING
---------------------- ----------------------
SHARES OF SHARES NUMBER OF SHARES OF SHARES
COMMON UNDERLYING SHARES COMMON UNDERLYING
SELLING STOCKHOLDERS STOCK OPTIONS OFFERED STOCK OPTIONS
- -------------------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
David Brent Ahlstrom........................ 46 882 46 -- 882
Marv Ahlstrom............................... 128 107 128 -- 107
Paul Ahlstrom(1)............................ 49,001 8,453 46,122 2,879 8,453
Jesse Arbon................................. 33 35 33 -- 33
Nate Benson................................. 195 63 195 -- 63
Brian Bentley(1)............................ 1,375 -- 1,294 81 --
Patrick Bultema(1).......................... 5,296 1,368 4,984 312 1,368
Ellen Craven................................ 153 325 153 -- 325
Spencer Dixon............................... 2,362 588 2,362 -- 588
Dominion Fund IV(1)......................... 138,373 -- 130,236 8,137 --
Travis Evans................................ 13 113 13 -- 113
Berkeley Geddes(1).......................... 471 -- 443 28 --
William Gibbons(1).......................... 6,560 1,244 6,435 125 1,244
Mark Hanks.................................. 39 411 39 -- 411
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO OFFERING AFTER OFFERING
---------------------- ----------------------
SHARES OF SHARES NUMBER OF SHARES OF SHARES
COMMON UNDERLYING SHARES COMMON UNDERLYING
SELLING STOCKHOLDERS STOCK OPTIONS OFFERED STOCK OPTIONS
- -------------------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Neal Harris(1).............................. 688 -- 647 41 --
John Heath.................................. 31 664 31 -- 664
Ken Krull................................... 382 1,328 382 -- 1,328
Don Langdon(1).............................. 1,481 364 1,397 84 364
Bruce K. Law................................ 4,444 1,912 4,444 0 1,912
Reed Law(1)................................. 1,654 -- 1,556 98 --
Darren Lee(1)............................... 1,177 2,120 1,107 70 2,120
Jim Lynsky.................................. 172 325 172 -- 325
Mike Lynsky................................. 210 354 210 -- 354
Dr. Jurgen Manchot(1)....................... 16,495 -- 15,525 970 --
Christy Maycock............................. 20 235 20 -- 235
Steve Morton................................ 581 941 581 -- 941
Lane Peterson............................... 421 759 421 -- 759
Chase Purles................................ 7 70 7 -- 70
Carmelo Santoro(1).......................... 6,756 -- 6,358 398 --
William Schaefermeyer....................... 480 506 480 -- 506
Steve Spencer............................... 1,061 2,353 1,061 -- 2,353
Ian Stiles(1)............................... 16,375 4,461 15,683 692 4,461
Russ Tolley................................. 421 588 421 -- 588
Utah Ventures II, L.P.(1)................... 91,638 -- 86,249 5,389 --
Greg Warnock(1)............................. 1,833 -- 1,725 108 --
Bryan Whipple............................... 29 882 29 -- 882
Scott Williams.............................. 628 632 628 -- 632
Eric Zimmerman.............................. 1,955 632 1,955 -- 632
</TABLE>
- ------------------------
(1) The number of shares beneficially owned include shares issued in connection
with our acquisition of Knowlix, but which are currently held in escrow
pursuant to the terms of the acquisition agreement to indemnify PSI for
losses arising out of any inaccuracy, breach or failure to comply with the
representations and waranties made or delivered by Knowlix in connection
with the acquisition. These escrow shares will remain subject to the escrow
provisions until October 2000 and will not be sold in this offering.
16
<PAGE>
PLAN OF DISTRIBUTION
PSI will not receive any proceeds from the sale of the shares. The shares
may be sold or distributed from time to time by the selling stockholders, or by
pledgees, donees or transferees of, or other successors in interest to, the
selling stockholders, directly to one or more purchasers (including pledgees) or
through brokers, dealers or underwriters who may act solely as agents or may
acquire shares as principals, at market prices prevailing at the time of sale,
at prices related to such prevailing market prices, at negotiated prices, or at
fixed prices, which may be changed. The distribution of the shares may be
effected in one or more transactions that may take place through the Nasdaq
National Market, including block trades or ordinary broker's transactions, or
through privately negotiated transactions, or through a combination of any such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or negotiated prices. Usual and
customary or specifically negotiated brokerage fees or commissions may be paid
by the selling stockholders in connection with such sales.
In addition, the selling stockholders or their successors in interest may
enter into hedging transactions with broker-dealers who may engage in short
sales of shares in the course of hedging the positions they assume with the
selling stockholders. The selling stockholders or their successors in interest
may also enter into option or other transactions with the broker-dealers that
require the delivery by such broker-dealers of the shares, which shares may be
resold thereafter pursuant to this prospectus.
The aggregate proceeds to the selling stockholders from the sale of the
shares will be the purchase price of the common stock sold less the aggregate
agents' commissions if any, and other expenses of issuance and distribution not
borne by PSI. The selling stockholders and any dealers or agents that
participate in the distribution of the shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any profit on the sale of the
shares by them and any commissions received by any such dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
To the extent required, the specific shares of common stock to be sold, the
names of the selling stockholders, purchase price, public offering price, the
names of any such agent, dealer or underwriter, and any applicable commission or
discount with respect to a particular offering will be set forth in an
accompanying prospectus supplement.
PSI has agreed to bear certain expenses of registration of the common stock
under the federal and state securities laws and of any offering and sale
hereunder not including certain expenses, such as commissions of dealers or
agents, and fees attributable to the sale of the shares. PSI has agreed to
indemnify the selling stockholders against certain liabilities, including
certain potential liabilities under the Securities Act.
PSI may suspend the use of this prospectus for a discrete period of time,
not exceeding 60 days in the aggregate, not longer than 30 days as to any single
delay, if, in the reasonable judgment of PSI, a development has occurred or
condition exists as a result of which the Registration Statement or the
prospectus does not contain material non-public information which is in the
reasonable judgment of PSI is required to be included in the Registration
Statement or the prospectus for sales of the shares to be made hereunder and the
immediate disclosure of such information would be seriously detrimental to PSI.
This offering will terminate on the earlier of 60 days after the effective date
of this Registration Statement or the date on which all shares offered hereby
have been sold by the selling stockholders.
Any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under that Rule rather than
pursuant to this prospectus.
There can be no assurance that the selling stockholders will sell any or all
of the shares of common stock offered by it hereunder.
17
<PAGE>
LEGAL MATTERS
The validity of the shares of common stock offered hereby has been passed
upon for the Company by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California.
EXPERTS
The audited consolidated financial statements of the Company as of
March 31, 1998 and 1999 and for each of the three years ended March 31, 1999,
incorporated by reference in this prospectus and the Registration Statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, payable by the
Company in connection with the sale of common stock being registered. All
amounts are estimates except the SEC registration fee and Nasdaq National Market
listing fee.
<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
----------
<S> <C>
SEC registration fee........................................ $ 4,514.94
Nasdaq National Market listing fee.......................... $ 7,761.96
Printing expenses........................................... $10,000.00
Legal fees and expenses..................................... $10,000.00
Accounting fees and expenses................................ $ 7,500.00
Miscellaneous expenses...................................... $ 5,222.10
----------
Total................................................... $45,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a corporation to
include in its charter documents and in agreements between the corporation and
its directors and officers provisions expanding the scope of indemnification
beyond that specifically provided by the current law.
Article IX of PSI's Amended and Restated Certificate of Incorporation
provides for the indemnification of directors to the fullest extent permitted
under Delaware law.
Article VI of PSI's Bylaws provides for the indemnification of officers,
directors and third parties acting on behalf of the corporation to the fullest
extent permitted under the General Corporation Law of Delaware.
PSI has entered into indemnification agreements with its directors and
executive officers, in addition to indemnification provided for in PSI's Bylaws,
and intends to enter into indemnification agreements with any new directors and
executive officers in the future.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, or persons controlling PSI
pursuant to the foregoing provisions, PSI has been informed 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.
The Declaration of Registration Rights dated September 29, 1999, entered
into by PSI in connection with its purchase of all of the outstanding shares of
Knowlix, provides that PSI will indemnify the selling stockholders against
certain liabilities, including liabilities under the Securities Act.
At present, there is no pending litigation or proceeding involving a
director, officer, employee, or other agent of PSI in which indemnification is
being sought, nor is PSI aware of any threatened litigation that may result in a
claim for indemnification by any director, officer, employee or other agent of
PSI.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------
<C> <S>
4.1(2) Declaration of Registration Rights dated September 29, 1999,
granted by PSI to the party or parties identified therein
5.1(2) Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1(1) Consent of Arthur Andersen LLP, Independent Public
Accountants
23.2(2) Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)
24.1(2) Power of Attorney (reference is made to the signature page
of this Registration Statement)
</TABLE>
- ------------------------
(1) Filed herewith
(2) Previously filed
ITEM 17. UNDERTAKINGS
The 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:
(a) To include any prospectus required by Section 10(a)(3) of the Securities
Act;
(b) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a) and (b) above 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 Exchange Act that are
incorporated by reference in the 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 that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
4. That, for the purpose of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 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 the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
5. To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
II-2
<PAGE>
under the Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus, to
deliver, 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.
6. 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 foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC 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.
II-3
<PAGE>
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
Post-Effective Amendment No. 1 to the Registration Statement (333-90461) to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of San Diego, State of California, on the 6th day of December, 1999.
<TABLE>
<S> <C> <C>
PEREGRINE SYSTEMS, INC.
By: /s/ DAVID A. FARLEY
-----------------------------------------
David A. Farley
SENIOR VICE PRESIDENT, FINANCE AND
ADMINISTRATION AND CHIEF FINANCIAL OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Chief Executive
*/s/ STEPHEN P. GARDNER Officer, and Director
------------------------------------------- (Principal Executive December 6, 1999
(Stephen P. Gardner) Officer)
Senior Vice President,
Finance and
/s/ DAVID A. FARLEY Administration, Chief
------------------------------------------- Financial Officer and December 6, 1999
(David A. Farley) Director (Principal
Financial Officer)
*/s/ JOHN J. MOORES
------------------------------------------- Chairman of the Board of December 6, 1999
(John J. Moores) Directors
*/s/ CHRISTOPHER A. COLE
------------------------------------------- Director December 6, 1999
(Christopher A. Cole)
*/s/ RICHARD A. HOSLEY II
------------------------------------------- Director December 6, 1999
(Richard A. Hosley II)
*/s/ CHARLES E. NOELL III
------------------------------------------- Director December 6, 1999
(Charles E. Noell III)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
*/s/ NORRIS VAN DEN BERG
------------------------------------------- Director December 6, 1999
(Norris van den Berg)
*/s/ THOMAS G. WATROUS, SR.
------------------------------------------- Director December 6, 1999
(Thomas G. Watrous, Sr.)
*/s/ MATTHEW C. GLESS
------------------------------------------- Principal Accounting Officer December 6, 1999
(Matthew C. Gless)
</TABLE>
<TABLE>
<S> <C> <C>
/s/ DAVID A. FARLEY
-------------------------------------
(David A. Farley)
*By ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1(2) Declaration of Registration Rights dated September 29, 1999,
granted by PSI to the party or parties identified therein
5.1(2) Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1(1) Consent of Arthur Andersen LLP, Independent Public
Accountants
23.2(2) Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)
24.1(2) Power of Attorney (reference is made to the signature page
of this Registration Statement)
</TABLE>
- ------------------------
(1) Filed herewith
(2) Previously filed
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated April 26, 1999
included in Peregrine Systems, Inc.'s Form 10-K for the year ended March 31,
1999 and to all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
San Diego, California,
December 7, 1999
