ESHARE TECHNOLOGIES INC/GA, S-3, 1999-12-21

ESHARE TECHNOLOGIES INC/GA
S-3, 1999-12-21
TELEPHONE & TELEGRAPH APPARATUS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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ESHARE TECHNOLOGIES, INC.
(Exact name of issuer as specified in its charter)

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GEORGIA 58-1378534
(State of Incorporation) (I.R.S. Employer Identification Number)
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5051 PEACHTREE CORNERS CIRCLE
NORCROSS, GEORGIA 30092-2500
(770) 239-4000
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices
and principal place of business)
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ALEKSANDER SZLAM
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ESHARE TECHNOLOGIES, INC.
5051 PEACHTREE CORNERS CIRCLE
NORCROSS, GEORGIA 30092-2500
(770) 239-4000
(770) 239-4444 (FAX)
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

COPIES TO:
JOHN FRANKLIN SMITH, ESQ.
LARRY W. SHACKELFORD, ESQ.
MORRIS, MANNING & MARTIN, L.L.P.
1600 ATLANTA FINANCIAL CENTER
3343 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA 30326
(404) 233-7000
(404) 365-9532 (FAX)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement as the
Selling Shareholders shall determine.

If any of the securities being registered on this Form are 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, please check the following box. [X]

CALCULATION OF REGISTRATION FEE

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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, no par value per share... 6,050,000 $8.59375 $51,992,188 $13,726.00
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(1) Computed in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee, based upon the average of the high and low
prices reported on December 15, 1999, as reported on the Nasdaq National
Market.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL 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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.

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PROSPECTUS

6,050,000 SHARES

(ESHARE LOGO)

COMMON STOCK

This prospectus relates to up to 6,050,000 shares of common stock of eShare
Technologies, Inc., or eShare, which may be offered from time to time by the
selling shareholders named herein. We will not receive any of the proceeds from
the sale of the shares of common stock.

The shares being registered were issued to the selling shareholders in
connection with the acquisition by us of eShare.com, Inc., or eShare.com, on
September 1, 1999. In this acquisition, we agreed to register these shares of
common stock.

Our common stock is traded on the Nasdaq National Market under the symbol
"ESHR." The closing price of our common stock as reported on the Nasdaq National
Market on December 20, 1999 was $16.25 per share.

SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.

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PER SHARE TOTAL
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Offering Price.............................................. $8.59375 $51,992,188
Offering Proceeds to Selling Shareholders(1)................ $8.59375 $51,992,188
</TABLE>

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(1) Excludes any brokerage commissions to be paid by selling shareholders. We
have agreed to pay the expenses of the registration of the shares for this
offering, which are estimated at $100,000.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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THE DATE OF THIS PROSPECTUS IS DECEMBER 21, 1999.
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TABLE OF CONTENTS

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PAGE
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Incorporation of Certain Documents by Reference............. i
eShare...................................................... 1
Recent Developments......................................... 1
Risk Factors................................................ 1
Use of Proceeds............................................. 10
Business.................................................... 10
Management.................................................. 18
Certain Transactions........................................ 19
Selling Shareholders........................................ 20
Plan of Distribution........................................ 21
Legal Matters............................................... 21
Experts..................................................... 21
Where You Can Find More Information......................... 21
Disclosure of Commission Position on Indemnification for
Securities Act Liabilities................................ 22
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You should rely only on the information contained in this prospectus or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This prospectus may be used only where it is
legal to sell these securities. The information contained in this prospectus may
be accurate only on the date of this prospectus.

Our trademarks and registered trademarks used in this prospectus include
eShare Technologies(R), eShare NetAgent(TM), eShare Expressions(R), eShare
Re:Sponse(TM), eShare Connections(TM), PhoneFrame(R) Explorer, PhoneFrame
CS(TM), Melita International(R) and Melita(R). Other trademarks used in the
prospectus are the property of their owners.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Securities and Exchange Commission allows eShare to "incorporate" into
this prospectus information eShare periodically files with the Securities and
Exchange Commission in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information may include documents filed after the date of this
prospectus which update and supersede the information you read in this
prospectus. We incorporate by reference the documents listed below, and all
future documents filed with the Securities and Exchange Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we terminate the offering of these securities.

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SEC FILE NO.:0-22317 PERIOD/FILING DATE
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Annual Report on Form 10-K........................ Year ended December 31, 1998
Quarterly Reports on Form 10-Q.................... Quarters ended March 31, 1999, June 30, 1999 and
September 30, 1999
Definitive Proxy Statement........................ April 29, 1999
Current Report on Form 8-K........................ June 21, 1999
Current Report on Form 8-K........................ September 16, 1999
Current Report on Form 8-K........................ December 20, 1999
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You may request a copy of these documents, at no cost, by writing to:

eShare Technologies, Inc.
5051 Peachtree Corners Circle
Norcross, Georgia 30092-2500
Attn: Gregory Riedel, Chief Financial Officer

You should rely on the information incorporated by reference or provided in
this prospectus. We have authorized no one to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.

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ESHARE

We are a leading total-solution provider of unified Web and telephony
customer management solutions for customer contact centers, e-commerce and
online communications. Our customers include leading organizations in the
financial services, retail, media and communication industries such as
1-800-Flowers, AOL, First USA, Citigroup, American Express, Dun and Bradstreet,
Lycos and AT&T WorldNet.

RECENT DEVELOPMENTS

On September 1, 1999, we acquired eShare.com in a merger transaction and
issued 6,050,000 shares to the shareholders of eShare.com, each of whom is a
selling shareholder in this offering. On October 4, 1999, we announced a
reorganization of our business efforts to include substantially more emphasis on
our Web based customer management business and the addition of James P. Tito as
our Vice Chairman of the Board and President. On October 27, 1999, we announced
a reorganization of our management team and the addition of Gregory Riedel as
our Vice President -- Administration, Chief Financial Officer and Treasurer. On
October 28, 1999, we announced our plan to significantly increase our
investments in our Web based customer management business. On November 2, 1999,
we announced a restructuring of our operations to provide more support to our
Web based customer management business and to reduce our telephony business
workforce.

RISK FACTORS

You should consider carefully the following factors in evaluating us and
our business. The risks and uncertainties described below are not the only ones
we face. Additional risks and uncertainties not presently known to us, which we
currently deem immaterial or that are similar to those faced by other companies
in our industry or business in general, may also impair our business operations.
If any of the following risks actually occurs, our business, financial condition
or results of future operations could be materially and adversely affected. In
such case, the trading price of our common stock could decline, and you could
lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

OUR OPERATING RESULTS COULD FLUCTUATE, CAUSING OUR STOCK PRICE TO FALL.

Our revenues and operating results could vary substantially from quarter to
quarter. If our quarterly revenues or operating results fall below the
expectations of investors or public market analysts, the price of our common
stock could fall substantially. Our quarterly revenues and operating results may
vary as a result of a number of factors, including:

- changes in the demand for our products;

- the level of product and price competition;

- the length of our sales and implementation process;

- our ability to control costs;

- the size and timing of individual transactions;

- the mix of products and services sold;

- software defects and other product quality problems;

- any delay in or cancellation of customer installations;

- our success in expanding our direct sales force and indirect distribution
channels;

- the timing of new product introductions and enhancements by us or our
competitors;

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- customer order deferrals in anticipation of enhancements or new products
offered by us or our competitors;

- changes in foreign currency exchange rates;

- customers' fiscal constraints; and

- general economic conditions.

In addition, a limited number of relatively large customer orders has
accounted for and is likely to continue to account for a substantial portion of
our total revenues in any particular quarter. Any delay or deferral of customer
orders may cause significant variations in our operating results from quarter to
quarter. A high percentage of our costs are for staffing and operating expenses
and are fixed in the short term based on anticipated revenue levels. Therefore,
variations between anticipated order dates and actual order dates, as well as
non-recurring or unanticipated large orders, can cause significant variations in
our operating results from quarter to quarter.

OUR OPERATING RESULTS ARE SUBSTANTIALLY DEPENDENT ON A LIMITED SUITE OF PRODUCTS
AND THE MARKET FOR CALL CENTER AND INTERNET BASED SOLUTIONS.

We currently derive a majority of our revenues from sales of our PhoneFrame
Explorer and upgrades of our older PhoneFrame CS products and related services.
We introduced PhoneFrame CS in early 1995 and PhoneFrame Explorer in late 1997.
We are currently beta testing our new Enterprise Explorer line of blended call
center products and expect to begin commercial shipment in the first quarter of
next year. We anticipate that in the near term, a significant portion of our
future revenue may be attributable to our Enterprise Explorer product line. We
intend to enhance these products and develop related products. However, any
factor adversely affecting the market for call center solutions in general, or
the PhoneFrame products in particular, could hurt our business and financial
results. We may face potential charges resulting from the impact of having to
write down inventory of outdated products that cannot be sold. The market for
call center systems is intensely competitive, highly fragmented and subject to
rapid change. As we move into the Internet space, a new set of challenges arise
related to a market which is still evolving. Currently, our Internet product
line accounts for a relatively small portion of our total revenues.

OUR LENGTHY SALES AND IMPLEMENTATION CYCLE COULD ADVERSELY AFFECT US.

If we experience delays in, or cancellation of, sales or implementations of
our products and services, our business and financial results could be hurt. To
sell our products, we generally must provide a significant level of education to
prospective customers regarding the use and benefits of our products. In
addition, prospective customers must make a significant commitment of resources
in connection with the implementation of our products, which typically requires
substantial integration efforts by us or our customer. For these and other
reasons, the length of time between the date of initial contact with the
potential customer and the installation and use of our products is typically six
months or more, and may be subject to delays over which we have little or no
control. Our implementation cycle could be lengthened in the future by increases
in the size and complexity of our installations and in the number of third-party
systems with which our products must integrate. In addition, any unexpected
delays in individual implementations could expose us to liability claims from
our customers.

WE RELY ON A FEW CUSTOMERS FOR A SIGNIFICANT PORTION OF OUR REVENUES.

In the call center space, we have historically derived and believe that we
will continue to derive a significant portion of our revenues in any period from
a limited number of large corporate clients. In 1998, our five largest customers
accounted for 23.2% of our total revenues. During 1997, our five largest
customers accounted for 27.9% of our total revenues. Although the specific
customers may change from period to period, we expect that large sales to a
limited number of customers will continue to account for a significant
percentage of our revenues in any particular period for the foreseeable future.
Therefore, the loss, deferral or cancellation of an order could have a
significant impact on our operating results in a particular quarter. Our

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current customers may not place additional orders and we may not obtain orders
of similar magnitude from other customers. If we lose any major customer, suffer
any reduction, delay in or cancellation of orders by any such customer or fail
to market successfully to new customers, our business and financial results
could be hurt.

THERE ARE MANY RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS.

Our sales outside the United States accounted for 21.0%, 18.4% and 24.8% of
our total revenues in 1996, 1997 and 1998, respectively. A significant element
of our business strategy is to continue expansion of our operations in
international markets. This expansion will continue to require significant
management attention and financial resources to develop international sales
channels. Because of the difficulty in penetrating new markets, we may not be
able to maintain or increase international revenues. Our international
operations are subject to inherent risks, including:

- significant volatility in the level and timing of business;

- the impact of possible recessionary environments in economies outside the
United States;

- changes in legal and regulatory requirements, including those relating to
telemarketing activities;

- changes in tariffs;

- seasonality of sales;

- the costs of localizing products for foreign markets and integrating
products with foreign system components;

- longer accounts receivable collection periods and greater difficulty in
accounts receivable collection;

- difficulties and costs of staffing and managing foreign operations;

- reduced protection for intellectual property rights in some countries;

- potentially adverse tax consequences;

- political and economic instability; and

- the higher cost of foreign service delivery.

While our expenses incurred in foreign countries typically are denominated
in the local currencies, revenues generated by our international sales typically
are paid in U.S. dollars or British pounds. Accordingly, while our exposure to
currency fluctuations to date has been insignificant, we could experience
fluctuations in currency exchange rates in the future that would have a material
adverse impact on our international operations. We currently do not engage in
currency hedging activities.

OUR GROWTH IS DEPENDENT UPON THE SUCCESSFUL DEVELOPMENT OF OUR DIRECT AND
INDIRECT SALES CHANNELS.

We currently sell our products domestically primarily through our direct
sales force and internationally through both direct and indirect sales channels.
We support our customers with our internal technical and customer support staff.
Our ability to achieve significant revenue growth in the future will greatly
depend on our ability to recruit and train sufficient technical, customer
support and direct sales personnel. We have in the past and may in the future
experience difficulty in recruiting qualified sales, technical and support
personnel. If we are unable to rapidly and effectively expand our direct sales
force and our technical and support staff, our business and financial results
could be hurt.

We believe that our future growth also will depend on developing and
maintaining successful indirect sales channels, including value added resellers,
or VARs, and distributors. Our strategy is to continue to increase the
proportion of customers served through these indirect channels. We are currently
investing, and plan to continue to invest, significant resources to develop
these indirect channels. This could adversely affect our operating results if
these efforts do not generate revenues necessary to offset this investment.
Also, our inability to recruit and retain qualified VARs and distributors could
adversely affect our results of operations.

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Because lower unit prices are typically charged on sales made through indirect
channels, increased indirect sales could adversely affect our average selling
prices and result in lower gross margins. In addition, sales of our products
through indirect channels will reduce our gross profits from our services as the
VARs and distributors provide these services. As indirect sales increase, our
direct contact with our customer base will decrease, and we may have more
difficulty accurately forecasting sales, evaluating customer satisfaction and
recognizing emerging customer requirements. In addition, our VARs and
distributors may develop, acquire or market products competitive with our
products.

Our strategy of marketing our products directly to customers and indirectly
through VARs and distributors may result in distribution channel conflicts. Our
direct sales efforts may compete with those of our indirect channels and, to the
extent different VARs and distributors target the same customers, VARs and
distributors may also come into conflict with each other. Any channel conflicts
which develop may have a material adverse effect on our relationships with VARs
and distributors or hurt our ability to attract new VARs and distributors.

THERE ARE SEVERAL RISKS ASSOCIATED WITH OUR ACQUISITION STRATEGY.

We may in the future continue to engage in selective acquisitions of
businesses that are complementary to ours, including other providers of Internet
products, contact management or CTI solutions or technology. We may not be able
to identify suitable acquisition candidates available for sale at reasonable
prices, consummate any acquisition or successfully integrate any acquired
business into our operations. Further, acquisitions involve a number of
additional risks, including diversion of management's attention, failure to
retain key acquired personnel, unanticipated events or circumstances and legal
liabilities, some or all of which could hurt our business and financial results.
Problems with an acquired business could have a material adverse impact on our
performance as a whole.

If we engage in acquisitions in the future, we might finance such
acquisitions with the proceeds from public offerings as well as with possible
debt financing, the issuance of additional equity securities (common or
preferred stock) or a combination of the foregoing. We may not be able to
arrange adequate financing on acceptable terms. If we were to proceed with one
or more significant future acquisitions in which the consideration consisted of
cash, a substantial portion of our available cash could be used to consummate
the acquisitions. As has been the case in the past, if we were to consummate one
or more significant acquisitions in which the consideration consisted of stock,
our shareholders could suffer significant dilution of their interests in us.

Many business acquisitions must be accounted for using purchase accounting.
Most of the businesses that might become attractive acquisition candidates for
us are likely to have significant intangible assets. If we acquire these
businesses and are required to account for them as a purchase, we would
typically be required to recognize substantial intangible asset amortization
charges, reducing future earnings. In addition, such acquisitions could involve
non-recurring acquisition-related charges, such as the write-off or write-down
of software development costs or other intangible items.

WE MAY BE CONFRONTED WITH DEFECTS IN OUR SOFTWARE OR THE INABILITY TO ACQUIRE
THIRD-PARTY SOFTWARE OR HARDWARE THAT IS ERROR-FREE.

Software products as complex as those we offer may contain errors that
could be detected at any point in the products' life cycles. We have, in the
past, discovered software errors in certain of our products and have experienced
delays in shipment or implementation of products during the period required to
correct these errors. Despite extensive testing by us and by current and
potential customers, errors may still be found. This could result in a loss of,
or delay in, market acceptance and sales, diversion of development resources,
injury to our reputation or increased service and warranty cost. In particular,
the call center environment is characterized by a wide variety of standard and
non-standard configurations that make pre-release testing for programming or
compatibility errors very difficult and time consuming and limit our ability to
uncover all defects prior to shipment and installation at a customer's location.
Certain software used in our products is licensed by us from third parties, and
our products are designed to operate on certain hardware platforms

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manufactured by third parties. Such third-party software or hardware may contain
errors that we are dependent upon the third-party to correct.

WE MAY FACE LIABILITY TO CLIENTS IF OUR SYSTEMS FAIL.

Our products are often critical to the operations of our clients'
businesses and provide benefits that may be difficult to quantify. If our
product or a client's system fails, the client could make a claim for
substantial damages against us, regardless of our responsibility for such
failure. Although we attempt to limit contractually our liability for damages
arising from product failures or negligent acts or omissions, the limitations of
liability set forth in our contracts may not be enforceable in all instances and
may not otherwise protect us from liability for damages. Although we maintain
general liability insurance coverage, including coverage for product liability
and errors or omissions, this coverage may not continue to be available on
reasonable terms or in sufficient amounts to cover one or more large claims. In
addition, the insurer might disclaim coverage as to any future claim. If we
experience one or more large claims against us that exceed available insurance
coverage or changes in our insurance policies, including premium increases or
the imposition of large deductible or co-insurance requirements, our business
and financial results could be hurt.

WE MUST CONTINUE TO ADVANCE OUR TECHNOLOGY AND COMPLY WITH INDUSTRY REQUIREMENTS
TO REMAIN COMPETITIVE.

The market for our products is subject to rapid technological change,
changing customer needs, frequent new product introductions and evolving
industry standards that may render our existing products and services obsolete.
As a result, unforeseen changes in customer and technological requirements for
application features, functions and technologies could rapidly erode our
position in this market. If we are unable, for technological or other reasons,
to develop and introduce new and enhanced products in a timely manner, our
business and financial results could be hurt. Our growth and future operating
results will depend in part upon our ability to enhance existing applications
and develop and introduce new applications that anticipate, meet or exceed
technological advances in the marketplace, that meet changing customer
requirements, that respond to competitive products and that achieve market
acceptance. Our product development and testing efforts have required, and are
expected to continue to require, substantial investments. We may not possess
sufficient resources to make these necessary investments. In addition, we cannot
assure that these products will meet the requirements of the marketplace and
achieve market acceptance, or that our current or future products will conform
to industry standards.

WE MAY EXPERIENCE DELAYS IN DEVELOPMENT OF NEW PRODUCTS.

We have in the past experienced delays both in developing new products and
customizing existing products. We could experience similar delays in the future.
Delays could occur for a variety of reasons, including:

- the complex nature of our products;

- difficulties in getting newly developed software code to function
properly with existing code;

- difficulty in recruiting sufficient numbers of programmers with the
proper technical skills and capabilities;

- loss of programmers with existing technical knowledge of our products;

- changing standards or protocols within the computer and telephony
equipment with which our products integrate;

- inherent limitations in, difficulties in integrating with, and unforeseen
problems with using other company or industry products and software;

- changes in design specifications once technical problems are uncovered;
and

- unforeseen problems with the implementation of a distributed,
object-oriented architecture and processing.

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THE INABILITY TO ATTRACT AND RETAIN MANAGEMENT AND OTHER PERSONNEL MAY ADVERSELY
AFFECT US.

The future success of our growth strategy will depend to a significant
extent on our ability to attract, train, motivate and retain highly skilled
professionals, particularly software developers, sales and marketing personnel
and other senior technical personnel. Highly skilled employees with the
education and training we require are in high demand. If we are unable to hire
and retain such qualified personnel, our ability to adequately manage and
complete our existing sales and to bid for, obtain and implement new sales would
be impaired. Further, we must train and manage our growing employee base,
requiring an increase in the level of responsibility for both existing and new
management personnel.

OUR SUCCESS DEPENDS ON OUR KEY EXECUTIVES.

Our success will depend in large part upon the continued availability of
the services of our senior executives, including Aleksander Szlam, our Chairman
of the Board and Chief Executive Officer. Although we have an employment
agreement with Mr. Szlam, the agreement does not obligate him to continue his
employment with us. We might not be able to retain the services of Mr. Szlam. In
addition, we do not maintain key man life insurance on Mr. Szlam.

WE MUST SUCCESSFULLY MANAGE OPERATIONS.

Our ability to grow will be dependent on properly managing our operations.
Our inability to manage effectively could have a material adverse effect on the
quality of our services and projects, our ability to attract and retain key
personnel, our business prospects and our financial results. In particular, we
will have to continue to train our personnel, particularly skilled technical,
marketing and management personnel, and continue to develop and improve our
operational, financial, communications and other internal systems.

WE MAY NOT BE ABLE TO CONTINUE TO COMPETE SUCCESSFULLY WITH OTHER COMPANIES.

The market for our products is intensely competitive, fragmented and
subject to rapid change. Because our principal products are call management
systems, which include both software applications and hardware, we compete with
a variety of companies that provide these components independently or as an
integrated system. We may not be able to compete successfully against current
and future competitors and competitive pressures faced by us could hurt our
business and financial results. Our primary competitors in the field of
integrated inbound/outbound telephony-based call management systems are Davox
Corporation, or Davox; EIS International, Inc., or EIS; and Mosaix
International, Inc., or Mosaix. We compete primarily against Davox and Mosaix in
the collections segment of the outbound call management systems market, and
against EIS in the telemarketing and telesales segments of the inbound/outbound
call management systems market. We also compete in the CTI segment of the
market, where principal competitors include Firstwave Technologies, Inc.,
Genesys Telecommunications Laboratories, Inc., GeoTel Communications
Corporation, Information Management Associates, Inc., and Quintus Corporation,
among others. Some of our competitors may align themselves with
telecommunications equipment providers, such as providers of private branch
exchange, or PBX, and automatic call distribution, or ACD, equipment, other
telecommunications equipment providers or other vendors in an effort to increase
sales potential for their products. We may also face additional direct
competition from PBX/ACD vendors, other telecommunications equipment providers,
telecommunications service providers, computer hardware and software vendors and
others. In addition we may also face competition from non-traditional
competitors in the emerging computer telephony market. These competitors may
include Interactive Intelligence Inc., Oracle Corporation, IBM and others. We
generally face competition from one or more of our principal competitors on
major installations and believe that price is a major factor considered by our
prospective customers. Increased competition has contributed significantly to
price reductions, and we expect these price reductions to continue. In addition,
increased competition may result in reduced operating margins and loss of market
share. Many of our current and potential competitors have significantly greater
financial, technical, marketing and other resources than we do. As a result,
they may be able to respond more quickly to new or emerging technologies and
changes in customer requirements, or to devote greater resources to the
development, promotion and sale of their products than we could.

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The market for our Internet based products is new and rapidly evolving, and
is expected to become increasingly competitive as current competitors expand
their product offerings and new companies enter the market. The principal
competitive factors in the community and e-commerce software and services market
include adherence to emerging Web based technology standards; comprehensiveness
of applications; reliability and security; adaptability, flexibility and
scalability; real-time, interactive capability with customers, partners, vendors
and suppliers; integration with a variety of communications media; ease of use;
ease of implementation; customer service and support; and price. Although we
believe that we currently compete favorably with respect to these factors, there
can be no assurance that we can maintain our competitive position against
current and potential competitors, especially those with longer operating
histories, greater name recognition and substantially greater financial,
technical, marketing, management, service, support and other resources. We
expect that these solutions will continue to be a principal source of
competition for the foreseeable future.

We face competition in the community market from Web Crossing, O'Reilly Web
Board, The Palace Server and Koz iChat and our competitors in the live
interaction market include Webline, Kana Communications, eGain, Acuity and
Business Evolutions, Inc. In addition, traditional call center software
providers and customer relationship vendor managers are trying to penetrate the
interactive communication market by joining with established strategic partners
in the industry.

We also may face competition from systems integrators which design and
develop custom systems and perform custom integration. Some of these firms may
possess industry-specific expertise or reputations among potential customers for
offering enterprise solutions to e-commerce needs. These systems integrators may
be resellers of our products and may engage in joint marketing and sales efforts
with us. We rely on these firms for recommendations of our products during the
evaluation stage of the purchase process, as well as for implementation and
customer support services. These systems integrators may have similar, and often
more established, relationships with our competitors, and there can be no
assurance that these firms will not develop, market or recommend competing
software applications.

OUR FAILURE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS MAY ADVERSELY AFFECT
US.

We rely on a combination of patent, copyright, trade secret and trademark
laws, confidentiality procedures and contractual provisions to protect our
proprietary rights in our products and technology. These measures may not be
adequate to protect our trade secrets and proprietary technology. Further, we
may be subject to additional risks as we enter into transactions in countries
where intellectual property laws are not well developed or are poorly enforced.
Legal protections of our rights may be ineffective in such countries. If we must
engage in litigation to defend and enforce our intellectual property rights,
either domestically or in other countries, we could face substantial costs and
diversion of resources, regardless of the final outcome of such litigation.
Despite our efforts to safeguard and maintain our proprietary rights both in the
United States and abroad, we may not be successful in doing so and the steps we
take in this regard may not be adequate to deter misappropriation or independent
third-party development of our technology or to prevent an unauthorized third
party from copying or otherwise obtaining and using our products or technology.
Others may independently develop similar technologies or duplicate any
technology developed by us.

With certain exceptions, we historically have not actively pursued
infringements of our patents, and any future attempt by us to enforce our
patents might not be successful or result in royalties that exceed the cost of
such enforcement efforts. We may not be able to detect all instances of
infringement. We have entered into agreements with certain of our distributors
giving them a limited, non-exclusive right to use portions of our source code to
create foreign language versions of our products for distribution in foreign
markets. In addition, we have entered into agreements with a number of our
customers requiring us to place our source code in escrow. These escrow
arrangements typically provide that these customers have a limited, non-
exclusive right to use this code in the event that there is a bankruptcy
proceeding by or against us, if we cease to do business or if we fail to meet
our support obligations. These arrangements may increase the likelihood of
misappropriation by third parties. As the number of call management software
applications in the industry increases and the functionality of these products
further overlaps, software development companies like us may increasingly become
subject to claims of infringement or misappropriation of the intellectual
property

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rights of others. Although we believe that our software components and other
intellectual property do not infringe on the intellectual property rights of
others, we still face the risk that such a claim will be asserted against us in
the future, that assertion of such claims will result in litigation and that we
might not prevail in such litigation or be able to obtain a license for the use
of any infringed intellectual property from a third party on commercially
reasonable terms. Furthermore, litigation, regardless of its outcome, could
result in substantial cost to us, divert management's attention from our
operations and delay customer purchasing decisions.

OTHER COMPANIES MAY CLAIM THAT OUR PRODUCTS INFRINGE THEIR INTELLECTUAL PROPERTY
RIGHTS.

We cannot assure that third parties will not claim that we are infringing
their intellectual property rights. We expect that software product developers
will increasingly be subject to infringement claims as the number of products
and competitors in our industry grows and the functionality of products in
different industry segments overlaps. In furtherance of the development of our
services or products, we may need to acquire licenses for intellectual property
to avoid infringement of a third party's product. Such licenses may not be
available on commercially reasonable terms, if at all. We also cannot assure
that former employees of our present and future employers will not assert claims
that such employees have improperly disclosed confidential or proprietary
information to us. Any such claims, with or without merit, could be time
consuming to defend, result in costly litigation, divert management's attention
and resources, cause product shipment delays or require us to pay money damages
or enter into royalty or licensing agreements. Such royalty or licensing
agreements may not be available on terms acceptable to us, if at all. In the
event of a successful claim of product infringement against us and our failure
or inability to license the infringed or similar technology, our business,
operating results and financial condition could be materially and adversely
affected.

ONLINE SECURITY BREACHES COULD HARM OUR BUSINESS.

A party that is able to circumvent our security systems or the security
systems of our customers could steal proprietary information or cause
interruptions in our operations. Security breaches also could damage our
reputation and expose us to a risk of loss or litigation and possible liability.
Our insurance policies have coverage limits and exclusions that may prevent
reimbursement for losses caused by security breaches.

Furthermore, our servers may be vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions. We may need to expend significant
additional capital and other resources to protect against security breaches or
to alleviate problems caused by any breaches. We cannot assure that we can
prevent all security breaches.

IF INTERNET USAGE DECREASES, OUR BUSINESS COULD BE MATERIALLY ADVERSELY
AFFECTED.

Our future success is substantially dependent on the continued growth in
the use of the Internet and e-commerce. The Internet is relatively new and is
rapidly evolving. Our business would be adversely affected if Internet usage and
e-commerce does not continue to grow. Growth in Internet usage and e-commerce
may be inhibited for a number of reasons, such as:

- the Internet infrastructure may not be able to support the demands placed
on it, or its performance and reliability may decline as usage grows;

- security and authentication concerns with respect to transmission over
the Internet of confidential information, such as credit card numbers,
and attempts by unauthorized computer users, commonly referred to a
hackers, to penetrate online security systems; and

- privacy concerns, such as those related to the placement by Web sites on
a user's hard drive without the user's knowledge or consent of certain
information to gather user information, known as "cookies."

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RISKS RELATED TO OUR INDUSTRY

YEAR 2000 RISKS MAY RESULT IN MATERIAL ADVERSE EFFECTS ON OUR BUSINESS.

Many companies need to upgrade their computer systems and software products
in order to ensure that these systems and software are able to distinguish 21st
century dates from 20th century dates. While our current products are designed
to comply with these "Year 2000" requirements, we may still face claims
resulting from system problems associated with the century change. Our software
products that are designed to be Year 2000 compliant may not contain all
necessary date code changes. Customers using earlier versions of our products
that were not Year 2000 compliant may have to install a later version of the
software that is Year 2000 compliant or implement a modification to correct that
version. Because our software system is often integrated with hardware and
operating or interface software over which we exert little control, the failure
of the manufacturers of those systems to ensure that they are Year 2000
compliant may cause the integrated system to fail. Any Year 2000 problems with
our products and implementations that are not satisfactorily corrected could
hurt our business and financial results.

We believe that the purchasing patterns of customers and potential
customers may be affected by Year 2000 issues in a variety of ways. Expenditures
by many companies to address Year 2000 issues may result in reduced funds
available to purchase software products such as those that we offer. Potential
customers may also choose to defer purchasing Year 2000 compliant products until
they believe it is absolutely necessary, thus potentially resulting in stalled
market sales within the industry. Conversely, Year 2000 issues may cause
companies to accelerate purchases, thereby causing an increase in short-term
demand and a consequent decrease in long-term demand for software products.
Additionally, Year 2000 issues could cause a significant number of companies,
including our customers, to reevaluate their current software needs and as a
result switch to other systems or suppliers. Any of the foregoing could hurt our
business and financial results.

In addition, Year 2000 non-compliance in our internal information
technology, or IT, systems and non-IT systems on which our operations rely could
hurt our business and financial results. In spite of our best efforts to upgrade
our systems, we may still face Year 2000 compliance issues.

WE MAY BE SUBJECT TO CHANGING GOVERNMENTAL REGULATIONS.

Federal, state or foreign agencies may and have adopted laws or regulations
affecting the use of outbound call processing systems as well as the Internet as
a commercial medium. These laws or regulations could limit the market for our
products, which could materially adversely affect our business, operating
results and financial condition. Although many of these laws or regulations may
not apply to our business directly, we expect that laws and regulations relating
to user privacy, pricing, content and quality of products and services could
indirectly affect our business. It is possible that these laws or regulations
could expose companies involved in outbound call processing systems as well as
e-commerce to liability, which could limit the growth of commerce on the
Internet generally.

RISKS RELATED TO OUR OFFERING

OUR CHARTER AND BYLAWS AND GEORGIA LAW MAY INHIBIT A TAKEOVER OF ESHARE.

The Board of Directors has authority to issue up to 20,000,000 shares of
preferred stock and to fix the rights, preferences, privileges and restrictions,
including voting rights, of the preferred stock without further vote or action
by our shareholders. The rights of the holders of our common stock will be
subject to, and may be adversely affected by, the rights of the holders of
preferred stock that may be issued in the future. While we have no present
intention to issue shares of preferred stock, such issuance could have the
effect of making it more difficult for a third party to acquire a majority of
our outstanding voting stock. In addition, our charter and bylaws contain
provisions that may discourage proposals or bids to acquire us. These provisions
could have the effect of making it more difficult for a third party to acquire
control of us and adversely affect prevailing market prices for our common
stock.

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OUR STOCK PRICE HAS BEEN VOLATILE.

The market price of our common stock could be subject to significant
fluctuations in response to variations in quarterly operating results and other
factors. In addition, the securities markets have experienced significant price
and volume fluctuations from time to time that have often been unrelated or
disproportionate to the operating performance of particular companies. Any
announcement with respect to any adverse variance in revenue or earnings from
levels generally expected by securities analysts or investors for a given period
would have an immediate and significant adverse effect on the trading price of
the common stock. In addition, factors such as announcements of technological
innovations or new products by us, our competitors or third parties, rumors of
such innovations or new products, changing conditions in the market for call
center systems, changes in estimates by securities analysts, announcements of
extraordinary events, such as acquisitions or litigation, or general economic
conditions may have a significant adverse impact on the market price of the
common stock.

OUR PRINCIPAL SHAREHOLDER CONTINUES TO CONTROL OUR AFFAIRS.

Aleksander Szlam, our Chairman of the Board, Chief Executive Officer and
principal shareholder, is the beneficial owner of approximately 50.1% of the
outstanding shares of our common stock. Accordingly, Mr. Szlam is in a position
to control our affairs through his ability to control any election of members of
our Board of Directors, as well as any decision whether to merge or sell our
assets, to amend our charter and bylaws, or to take other actions requiring the
vote or consent of our shareholders. This concentration of ownership could also
discourage bids for the shares of common stock at a premium to, or create a
depressive effect on, the market price of the common stock.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the shares in this
offering. All of the proceeds from the sale of the shares in this offering will
be received by the selling shareholders.

BUSINESS

On September 1, 1999, we acquired eShare.com. This acquisition has resulted
in a significant increase in the emphasis on our Web based customer management
business.

A MORE COMPLETE DESCRIPTION OF OUR E360 BUSINESS UNIT WHICH INCLUDES OUR
TELEPHONY BUSINESS IS SET FORTH IN OUR FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1998, INCORPORATED HEREIN BY REFERENCE. THE FOLLOWING IS A DESCRIPTION OF OUR
INTERNET BUSINESS UNIT WHICH INCLUDES OUR WEB BASED CUSTOMER MANAGEMENT
BUSINESS.

eShare.com is the leading provider of software and services that enable
real-time interactive communications and services over the Internet which are
crucial for e-commerce. These innovative technologies include Web based customer
service and support, customer self-service, live conferencing and events,
distance learning, community chat, threaded discussion forums and custom
integration tools. Our two leading software products are eShare NetAgent and
eShare Expressions. eShare NetAgent is a real-time customer service solution
that provides interactive customer services for e-commerce and allows companies
to increase revenues, improve customer service, satisfaction and retention and
decrease operating costs. eShare Expressions is a real-time chat and threaded
discussion solution that enables users to improve communications, build online
communities, expand educational offerings and increase business collaboration
while enabling companies to realize the benefits of online real-time human
interaction to retain customers and increase sales.

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In addition to our Internet software, we provide a number of services to
the online community such as hosting services for our eShare NetAgent and eShare
Expressions software that enable a company to realize America Online, AT&T
WorldNet Service, Computer Associates, GeoCities, Lycos, Pfizer, Hewlett Packard
and 1-800 FLOWERS.

INDUSTRY BACKGROUND

The emergence and acceptance of the Internet and the World Wide Web has
changed the way consumers and business communicate, obtain information, purchase
goods and transact business. The Web has experienced dramatic growth in recent
years, both in the number of users and as a means of conducting commercial
transactions. According to International Data Corporation, the number of
Internet users worldwide exceeded 97 million in 1998 and is expected to grow to
320 million in 2002. In addition, worldwide e-commerce transactions are
projected to grow from $32 billion in 1998 to over $400 billion by 2002,
creating a market of nearly $4 billion for Internet commerce software tools,
according to a report by Forrester Research. This report also estimates that
Internet applications delivered through hosted services will grow to over $16
billion in 2002, with e-commerce sites comprising approximately 80% of this
market.

While the Internet is recognized today as a powerful extension of the
internal computing and communications networks of organizations, much of the
development and growth of the Web have been driven by the creation and growth of
online communities. An online community is a group of people with common
interests that come together in an electronic environment to share information,
ideas and to find information, products and services related to a particular
interest or need in a single location. Building effective community sites
requires technologies and services that encourage and facilitate communications,
including real-time chat rooms, instant messaging, forums, event moderation,
virtual tours and e-mail. Through these features, online communities seek to
establish a close relationship with their audience that evolves over time
according to the interests of their members.

As online communities have grown, businesses have increasingly recognized
that the Web is a powerful and direct channel to sell goods and services and to
advertise. As e-commerce continue to increase, businesses are recognizing the
need to provide online customer support. One study, in a series of studies
reported by American Demographics in February 1999, found that 63% of
respondents said they did not finish a transaction online because they were
unable to find the information they needed. In addition, another of these
studies found that 41% of online shoppers are more likely to buy if there is
chat-based support.

Online businesses have increasingly recognized that quality customer
service is an important factor that may determine where a consumer shops. As Web
users continue to purchase online, they demand interactive customer service and
support that can enhance their online shopping experience. Similarly, online
businesses are increasingly using online customer services as a means to retain
traffic, generate repeat purchases, enhance customer satisfaction and build
brand loyalty.

Typically, organizations have used two approaches to provide customer
service and support to Web users seeking to complete a transaction on their
site: traditional telephone call centers and e-mail communication. Many early
customer service applications were built on the traditional voice
telecommunications platform, such as customer call centers, and only sought to
integrate the Web as a secondary communication channel. The traditional means of
handling customer service and commerce, based on telephone calls with telephone
customer service representatives, is expensive to online retailers and often
inefficient and impractical for online shoppers. In addition, unless the
customer service representative is able to monitor the Web user's online
activities, it may be time-consuming or difficult for the customer service
representative to service the customer well. The other primary technology
companies are using, e-mail based solutions, are not real-time, restrict
customer services to pre-defined answers or transactions and often fail to
provide timely access to a customer service representative who can tailor a
response to the needs of a specific customer.

We believe that to realize the potential of the Web, companies must be able
to provide a comprehensive solution that can offer real-time interactive
customer service and support. We further believe that e-commerce customer
service solutions must provide comprehensive, adaptable and scalable solutions
that are easy to use and set up, have administrative and reporting capabilities
and can integrate with a company's
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existing technology operations. In addition, we believe companies need
sophisticated e-mail management capabilities that can provide features that
typical e-mail solutions do not provide, including intelligent routing and
automated response, full integration with agent operations and improved
forwarding options. We also believe that the ability to provide real-time
interaction between customer service representatives and Internet users will
allow organizations to improve customer loyalty and enhance sales opportunities

THE INTERNET SOLUTION

We provide software and services that enable interaction on commercial and
community sites and help companies realize their online business potential.
Using our products, organizations are able to:

- Increase revenues by providing real-time customer services and human
interaction at the critical time of a purchasing decision. Our eShare
NetAgent solution allows a customer service representative to engage
consumers in an online dialogue, provide shopping advice and important,
useful information to consumers.

- Increase service levels and enhance consumer satisfaction, which
strengthens brand equity and enhances customer loyalty. Using the eShare
suite of products, customer service representatives can monitor consumer
activities and prioritize their service requests based on time spent at a
Web site, time spent per page, zones visited and the number of pages
viewed. Service can then be initiated either by the consumer or the
customer service representative at any time, at different levels, through
real-time chat, e-mail, instant messaging and voice over the Internet.

- Increase productivity, improve response time and reduce costs by enabling
customer service representatives to handle multiple customers online at
the same time. Using our automated features, customer service
representatives can access a customizable library of frequently used Web
pages, common answers or instructions and can push automated
questionnaires or slide shows to one consumer while providing other
services to another.

- Build and maintain online communities with communication and interaction
technologies. Our eShare Expressions and eShare Connections products
provide an integrated, scalable and highly secure solution suite that
enables organizations to attract traffic to their Web sites with chat
rooms, moderated live events, sophisticated e-mail, instant messaging and
bulletin boards.

- Increase business productivity and collaboration through online
conferencing, training, workgroup discussions and other corporate events
by allowing real-time employee communication and interaction.

OUR STRATEGY FOR OUR INTERNET BUSINESS

Our goal is to continue to be a leading supplier of Web based e-commerce
and customer service software solutions. To achieve this goal, the key elements
of our strategy are:

- Continue to target companies with an Internet presence. We will continue
to focus on providing solutions to companies committed to offering
products and services via the Internet. We developed our products to
address the online communication needs and requirements of organizations
for which the Internet and their Web site communities are the primary
mode of distribution to, and interaction with, their customers and
members.

- Expand relationships with strategic partners. We have established
relationships with large, strategic partners, including Ericsson
Communications Ltd. in technology infrastructure and America Online in
the e-commerce industry. We plan to expand these relationships and
establish new relationships with other partners to increase our capacity
to both sell and implement our products.

- Expand direct channels of distribution. Currently we distribute our
products through both direct and indirect channels. Our direct channels
include our direct salesforce and our in-house telesalesforce, and our
indirect channels include our resellers, such as Interference and
Infomech, as well as Internet Service Providers (ISPs), Web site
developers and consultants. We intend to expand our direct

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channels of distribution for our software products, strengthen our marketing
organization, and hire additional sales personnel in the future.

- Capitalize on leading position in chat market and existing customer base.
We believe that we are currently a leading provider of Web based human
interaction software, based on a combination of our product capabilities
and the number of customers we serve. Our interactive chat software,
eShare Expressions, currently serves over 1,200 customers, many of whom
operate online communities. We intend to use this market leadership
position to seek additional revenue opportunities, including acquiring
new online community customers, cross-selling our eShare NetAgent
customer service solutions to existing online community customers
offering e-commerce, and developing and providing additional products and
services to existing customers.

- Continue to leverage technology leadership. We intend to continue to
devote substantial resources to the development of new and innovative
products for e-commerce solutions that can integrate with existing
databases and applications as well as emerging Web technologies. We
believe that the increasing demands for interactive community and
e-commerce solutions that can integrate with existing databases and
applications as well as emerging Web technologies. We believe that the
increasing demands for interactive community and e-commerce solutions
will require an infrastructure that is adaptable, extensible and
interoperable. In addition, we plan to apply our technical know-how and
extensive experience in interactive communication and customer-service
software to the growing application hosting market. For example, we have
developed eShare NetAgent Live, which allows the customer to outsource
interactive customer service using eShare NetAgent.

PRODUCTS AND SERVICES, INTERNET BUSINESS UNIT

eShare NetAgent

eShare NetAgent allows customer service representatives simultaneously to
engage in real-time dialogue with multiple Web site visitors and manage e-mail
inquiries. eShare NetAgent features a powerful server that supports intelligent
queuing and routing of customers through multi-tier service lines. These various
components allow customer service representatives, supervisors, customers and
system administrators to communicate with one another. The server is also an
integrated knowledge-base that stores sales and support scripts, as well as
frequently used sayings, files and Web pages.

eShare NetAgent provides online agents with a single window graphical user
interface where they can observe and log live visitor activity, proactively
engage visitors in real-time discussions through their browsers, review and
manage customer e-mail histories, push content to consumers, deliver tutorials
and even toggle between active sessions to handle multiple customers at once.
eShare NetAgent's automated response, e-mail and customer self-service tools
free up agents to deal with additional user requests or higher priority issues.
eShare NetAgent's two primary applications include live interaction features and
an administration function consisting of supervision and reporting and visitor
monitoring.

eShare Re:Sponse

As part of its integrated e-commerce customer service support solution,
eShare Re:Sponse provides a time-saving application for management of incoming
e-mails, eShare Re:Sponse is designed to increase a customer service
representative's response time, improve the substance of the response and
provide more efficient and effective customer service.

eShare Expressions

eShare Expressions enables users to perform a wide range of real-time
community tasks such as virtual meetings, live training and conferencing,
distance learning, moderated events and social chat. Users perform all functions
through any standard Web browser, even behind firewalls, without the need for
any additional software or other downloads. By attracting visitors, encouraging
conversations and collaboration, eShare Expressions builds strong online
communities that can result in increased ad revenues and subscription sales,

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customer loyalty and a better response to targeted programs. This product
features four primary applications: chat, a server-based software solution for
adding live real-time interaction to facilitate and supplement online bulletin
boards and distance learning; forums, a real-time conferencing solution to
telephonic conference calls and videoconferencing whereby users can post, reply
to and attach files in discussion forums; tours, which provide the ability to
lead a group on a tour from page to page or site to site; and administration
whereby administrators can customize system settings at any time, capture
valuable user account information and profit from built-in ad banner
capabilities.

eShare Connections

eShare Connections is an off-the-shelf instant messaging product that
allows the user to communicate instantly with friends and associates online
through any standard Web browser. We believe this product supports the building
of online communities. eShare Connections functions through firewalls and does
not require any additional software or other downloads for use.

SALES AND MARKETING

We sell our products primarily through a direct sales force and through
relationships with resellers. The sale of our products is often an
enterprise-wide decision by prospective customers. Our marketing organization
utilizes a variety of programs to support our products. Our marketing programs
include:

- product and strategy updates with industry analysts;

- public relations activities and speaking engagements;

- direct e-mail and relationship marketing programs;

- telemarketing, seminars and trade shows; and

- Web site marketing.

PRICING STRATEGY

We are currently pursuing a dual pricing strategy that includes charging
fees for software licenses and charging for various recurring revenue items. In
addition, we offer services under various pricing structures. While a majority
of our revenue to date has resulted from software licensing fees, we expect that
recurring revenue streams will generate an increasing proportion of revenues
over time. We will continue to offer unbundled services but do not expect
revenues from these services to generate a significant portion of revenues.

Software licenses are granted to licensees for the perpetual use of a
specific version of the software and, generally, for a limited number of users.
Thus, in addition to up-sell opportunities for other software products and for
services, we have the opportunity to sell existing customers the rights to new
software versions and rights for additional users as the customer's needs
increase. We expect that, because of the generally increasing market demand for
Internet services, in addition to acquiring new customers, existing customers'
expanding needs will result in additional software license revenues over time.
We currently calculate the license price for our eShare Expressions and eShare
Connections product lines based on the number of community members concurrently
using each product in an Internet environment or the number of registers users
who have the right to access the product in an Intranet or Extranet environment.
eShare NetAgent license fees are calculated based on a combination of the number
of service agents having access to the product and the number of servers on
which the product is installed.

In addition to perpetual software license fees, we have also introduced
several recurring revenue pricing programs. We charge an annual maintenance fee
for access to ongoing technical support. Included in the annual maintenance fee
are the rights to new versions of the software program under contract that are
released during the term of the contract. Annual maintenance contracts were
introduced in mid-1998 and are expected to generate cumulative renewal revenue
in the year 2000 and beyond.

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We also offer our software solutions as hosted application services.
Through this program a customer need not provide an IT infrastructure and need
not install the eShare server software. Since 1998, we have been hosting its
applications for such companies as Lycos, GeoCities and AT&T WorldNet. In March
1999, we introduced eShare NetAgent Live an outsourcing service for our eShare
NetAgent application. Customers pay a monthly fee based on the number of service
agents having access to the product. This program affords us not only the
opportunity to service large customers who do not wish to provide their own IT
infrastructure but also the opportunity to pursue small and mid-sized companies
who do not have the requisite IT resources and know-how.

In a limited number of cases we charge for rights to use our software based
on a percentage of the revenues of the customer. This revenue may be from
advertising, training fees, or other sources associated with the customer's Web
site. We also derive a small portion of our revenues from installation,
consulting, customization and other services. Generally, these services are
priced based on the level of effort (in person-hours, -days or -weeks) required
to deliver the services and prices are inline with generally-accepted practices
for such services.

STRATEGIC PARTNERS

A key element of our market penetration strategy is the formation of
relationships with industry leaders in various complementary areas. We believe
these relationships increase our market exposure and presence, generate
qualified opportunities for us to sell our products and assist us in
implementing its products. We have relationships with companies such as
Snickleways Interactive and Linkshare Corporation to make eShare NetAgent
available to over 200 online merchants, as well as a relationship with America
Online to assist in marketing eShare NetAgent to each of AOL's online merchant
partners.

SUPPORT AND PROFESSIONAL SERVICES

We offer support and training services to our customers. We believe that
providing a high level of customer service and technical support is necessary to
achieve rapid product implementation, customer satisfaction and continued
revenue growth. We provide implementation services to assist companies in
optimizing the benefits of our solutions. In addition, systems integrators and
referral sellers often help companies to implement our products. These employees
often work closely with the staffs of third-party systems integrators to train
their consultants in the implementation of our software. We believe that these
implementation projects not only help ensure a company's success with our
products, but also allow our consultants and systems engineers to gain
industry-specific knowledge that can be used in future projects and products.

RESEARCH AND DEVELOPMENT

We believe it is critical to focus a large portion of our development and
engineering resources on developing new products, enhancing existing products
and creating future concepts for the community and e-commerce software and
services market. This includes simplifying methods of integrating our products
with a customer's existing systems. The marketplace that we focus on moves very
quickly and requires development efforts to anticipate change and predict
potential future customer demands. This new and emerging market is characterized
by rapid technological change, new product introductions and enhancements,
evolving industry standards and rapidly changing customer requirements. The
introduction of products incorporating new technologies and the emergence of new
industry standards could render existing products obsolete and unmarketable. Our
future success will depend on our ability to anticipate changes, enhance our
current products, develop and introduce new products that keep pace with
technological advancements and address the increasingly sophisticated needs of
our customers.

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COMPETITION

The market for our products is new and rapidly evolving, and is expected to
become increasingly competitive as current competitors expand their product
offerings and new companies enter the market. The principal competitive factors
in the community and e-commerce software and services market include:

- adherence to emerging Web based technology standards;

- comprehensiveness of applications;

- reliability and security;

- adaptability, flexibility and scalability;

- real-time, interactive capability with customers, partners, vendors and
suppliers;

- integration with a variety of communications media;

- ease of use;

- ease of implementation;

- customer service and support; and

- price.

Although we believe that we currently compete favorably with respect to
these factors, there can be no assurance that we can maintain our competitive
position against current and potential competitors, especially those with longer
operating histories, greater name recognition and substantially greater
financial, technical, marketing, management, service, support and other
resources. We expect that these solutions will continue to be a principal source
of competition for the foreseeable future.

We believe that no competitor currently provides a comparable comprehensive
solution of products and services for the community and e-commerce software and
services market. However, we do face competition in the community market from
Web Crossing, O'Reilly Web Board, The Palace Server and Koz iChat and our
competitors in the live interaction market include Webline-CISCO, Kana
Communications, eGain, Acuity-Quintus and Business Evolutions, Inc. In addition,
traditional call center software providers and customer relationship vendor
managers are trying to penetrate the interactive communication market by joining
with established strategic partners in the industry.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

Our success and competitiveness are dependent to a significant degree on
the protection of our proprietary technology. As a company, we rely primarily on
a combination of copyrights, trademarks, licenses, trade secret, and patent laws
and restrictions on disclosure to protect our intellectual property and
proprietary rights. We also enter into confidentiality agreements with our
employees and consultants, and generally control access to and distribution of
our documentation and other proprietary information.

We pursue the registration of some of our trademarks in the United States
and in other countries, although we have not yet secured registration of any
marks. We have pending trademark applications and issued trademark registrations
in the United States and abroad.

16
<PAGE> 20

EMPLOYEES

As of December 1, 1999, we had approximately 90 employees in the Internet
Business Unit. In addition, we have approximately 400 employees in our e360
Business Unit. We have the flexibility to utilize any of our employees to
deliver products and solutions to customers. None of our employees is subject to
a collective bargaining agreement. We believe that our relations with our
employees are good.

LEGAL PROCEEDINGS

We are a party to commercial litigation instituted by a competitor, EIS
International, Inc. relating to our recent acquisition of eShare.com. We have
filed counterclaims against EIS International, Inc. We believe the action filed
by EIS International, Inc. is without merit and intend to vigorously defend the
action.

Additionally, many of our installations involve products that are critical
to the operations of our clients' businesses. Any failure in one of our products
could result in a claim against us for substantial damages, regardless of our
responsibility for such failure. Although we attempt to limit contractually its
liability for damages arising from product failures or negligent acts or
omissions, we cannot assure you that the limitations of liability set forth in
our contracts will be enforceable in all instances.

17
<PAGE> 21

MANAGEMENT

Our executive officers and directors, and their ages as of December 20,
1999, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Aleksander Szlam............................. 48 Chairman of the Board and Chief Executive Officer
James P. Tito................................ 43 Vice Chairman of the Board and President
William K. Dumont............................ 49 Executive Vice President, and General Manager e360
Business Unit
Gregory Riedel............................... 41 Vice President -- Administration, Chief Financial
Officer, and Treasurer
Andrew J. Filipowski......................... 49 Director
Donald L. House(1)........................... 57 Director
</TABLE>

- ---------------

(1) Member of the Audit Committee and the Compensation Committee.

Aleksander Szlam founded eShare in 1979 and has served as Chairman of the
Board and Chief Executive Officer of eShare since its inception. Prior to
founding eShare, Mr. Szlam worked as a design engineer and scientist at Lockheed
Corporation, NCR and Solid State Systems.

James P. Tito has served as Vice Chairman and President of eShare since
October 1999. Mr. Tito was a co-founder of eShare.com and served as the Chairman
and Chief Executive Officer of eShare.com from its inception in October 1996
until its acquisition by eShare. Prior to co-founding eShare.com, Mr. Tito
served as the President of eShare.com's predecessor, Interactive Marketing
Technologies (IMT), a database marketing, consulting and services firm, since
1988. Mr. Tito serves as a director of LISTNet, Long Island's Software
Technology Network, a software development company.

William K. Dumont has served as Executive Vice President and General
Manager e360 Business Unit of eShare since November 1999. Mr. Dumont also served
as Chief Operating Officer from January 1999 until November 1999, as Senior Vice
President, Worldwide Sales of eShare from August 1998 until January 1999 and as
Vice President, Sales of eShare from December 1996 until August 1998. Prior to
joining eShare, Mr. Dumont served as Regional Manager for Octel Communications
Corporation from 1994 to 1996, and from 1990 to 1994 he served as Regional Vice
President of VMX, Inc., both of which are voice processing companies.

Gregory Riedel has served as Vice President, Administration, Chief
Financial Officer and Treasurer of eShare since October 1999. Mr. Riedel joined
eShare.com as Chief Financial Officer in May 1999 and served as Chief Financial
Officer of eShare.com from May 1999 until September 1999. From December 1996 to
May 1999, Mr. Riedel served as a Vice President and Chief Financial Officer of
Galileo Corporation, a medical and telecommunications manufacturing company.
From May 1994 through December 1996, Mr. Riedel was employed at IPC Information
Systems, Inc., a telecommunications manufacturing company, most recently as
Chief Financial Officer.

Andrew J. Filipowski has served as a Director of eShare since April 1999.
Mr. Filipowski is also President, CEO and Chairman of divine InterVentures, Inc,
a technology investment group. Mr. Filipowski was Founder/Chairman/President of
Platinum Technology, Inc., from its founding in 1987 until its sale to Computer
Associates, Inc. in 1999. Platinum Technology developed and marketed a wide
array of distributed computing systems software products and data warehousing
solutions.

Donald L. House has served as a Director of eShare since June 1997. A
private investor and business advisor to technology companies since 1988, Mr.
House served as Chairman of the Board of Directors of Clarus Corporation
(formerly known as SQL Financials, Inc.), a developer of electronic commerce,
financial and human resources application software, from January 1993 through
December 1997. He continues to serve on the Board of Clarus Corporation. In
addition, Mr. House serves on the Board of Carreker-Antinori, Inc., a provider
of software and consulting services to the financial industry, where he is a
member of the Audit

18
<PAGE> 22

Committee. He also serves as a director of a number of private high technology
firms. From September 1991 until December 1992, Mr. House served as President of
Prentice Hall Professional Software, a subsidiary of Simon and Schuster, Inc.
From 1968 through 1987, Mr. House served in a number of senior executive
positions with Management Science America, Inc., a provider of enterprise
application software.

There are no family relationships between any of our directors or executive
officers.

CERTAIN TRANSACTIONS

eShare has entered into Tax Indemnification Agreements with certain of its
shareholders providing for, among other things, the indemnification of eShare by
such shareholders for any federal and state income taxes (including interest)
incurred by eShare if for any reason eShare is deemed to be treated as a C
corporation during any period for which it reported its earnings to the taxing
authorities as an S corporation. The Tax Indemnification Agreements further
provide for the cross-indemnification of eShare and of each existing shareholder
for certain additional taxes (including interest and, in the case of existing
shareholders, penalties) resulting from eShare's operations during the period in
which it was an S corporation.

Aleksander Szlam has entered into an employment agreement with us effective
June 4, 1997. Pursuant to the agreement, Mr. Szlam is entitled to receive an
annual base salary of $300,000, and is entitled to an annual bonus of $160,000.
Based on his performance in 1997, our Board of Directors granted Mr. Szlam an
additional bonus of $80,000, and based on his performance in 1998, our Board of
Directors granted Mr. Szlam an additional bonus of $140,000. The Board of
Directors has increased Mr. Szlam's base salary in 1999 to $330,000. Mr. Szlam's
employment agreement has an initial term of two years and automatically renews
for additional two-year terms unless eShare or Mr. Szlam cancels such renewal by
giving three months' prior written notice. As neither eShare nor Mr. Szlam
canceled this agreement by March 4, 1999, it has been extended automatically
until June 2001. Under the terms of the agreement, Mr. Szlam has agreed to
assign to us all patents, copyrights and other intellectual property developed
by him during the course of his employment. In addition, Mr. Szlam has agreed
not to solicit our customers or employees or to compete with us for two years
following any termination of his employment.

19
<PAGE> 23

SELLING SHAREHOLDERS

The following table sets forth certain information regarding beneficial
ownership of common stock as of December 1, 1999, and as adjusted to reflect the
sale of shares offered hereby, by each selling shareholder.

Unless otherwise indicated, each person named in the table has sole voting
power and investment power or shares such power with his or her spouse with
respect to all shares listed as owned by such person. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and includes voting or investment power with respect to the
securities. The number of shares of common stock outstanding and the number of
shares beneficially owned by a person used in calculating the percentage for
each listed person includes any shares the person has the right to acquire
within 60 days of December 1, 1999.

<TABLE>
<CAPTION>
PERCENT SHARES ELIGIBLE
NUMBER OF BENEFICIALLY FOR SALE IN THIS
SELLING SHAREHOLDERS(1) SHARES OWNED(1) OFFERING(2)
- ----------------------- --------- ------------ ----------------
<S> <C> <C> <C>
Alex Bard............................................. 11,998(3) * 3,336
Bradley Birnbaum...................................... 221,862(4) 1.1% 188,634
Roger Campos.......................................... 417 * 417
Carolina Financials................................... 41,008(5) * 41,008
Chase Venture Capital Associates, L.P................. 1,874,238(6) 9.4% 1,874,238
Chris Cooper.......................................... 231,283 1.2% 231,283
Brad Feld............................................. 11,565(7) * 6,361
Flatiron Partners..................................... 266,831 1.4% 266,831
Doris Granatowski..................................... 150,700(8) * 82,108
Vladimir Kravchenko................................... 4,626 * 4,626
George Landgrebe...................................... 34,694(9) * 11,565
net.Genesis........................................... 69,385 * 69,385
Nancy Pagano.......................................... 20,816 * 20,816
Penny Lane Partners................................... 320,458 1.6% 320,458
Pequot Offshore Private Equity Fund, Inc.............. 46,093 * 46,093
Pequot Private Equity Fund, L.P....................... 363,984 1.9% 363,984
Christine Rochfort.................................... 278 * 278
Gilbert Rosenberg..................................... 9,252 * 9,252
Silicon Valley Bank................................... 23,229(10) * 23,229
Softbank Ventures, Inc................................ 320,195 1.6% 320,195
SOFTVEN No. 2 Investment Enterprise Partnership....... 438,667 2.2% 438,667
George Tasso.......................................... 787 * 787
James P. Tito......................................... 787,991(11) 4.0% 652,218
Walden Capital Partner................................ 307,558 1.6% 307,558
Alan Warms............................................ 23,129 * 23,129
--------- ---- ---------
Total....................................... 5,581,044 27.7% 5,306,456
========= ==== =========
</TABLE>

- ---------------

* Less than 1% of the outstanding common stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes shares as to which the
named person has or shares voting or investment power. The number of shares
of common stock outstanding and the number of shares beneficially owned by
a person used in calculating the percentage for each listed person includes
any shares the person has the right to acquire within 60 days of December
1, 1999, and is based on 19,638,976 shares actually outstanding at December
1, 1999.
(2) As of December 1, 1999. Under the terms of the agreement by which we
acquired eShare.com, if any options held by employees of eShare.com at the
time of the acquisition are not exercised before they expire, the shares
purchasable under those options will be allocated among the selling
shareholders pro

20
<PAGE> 24

rata based upon their ownership of eShare.com at the time of the acquisition and
may be sold in this offering.
(3) Includes 8,662 shares subject to options exercisable within 60 days of
December 1, 1999.
(4) Includes 33,228 shares subject to options exercisable within 60 days of
December 1, 1999.
(5) Includes 41,008 shares subject to warrants exercisable within 60 days of
December 1, 1999.
(6) Includes 208,386 shares subject to warrants exercisable within 60 days of
December 1, 1999.
(7) Includes 5,204 shares subject to options exercisable within 60 days of
December 1, 1999.
(8) Includes 63,603 shares subject to options exercisable within 60 days of
December 1, 1999.
(9) Includes 23,129 shares subject to options exercisable within 60 days of
December 1, 1999.
(10) Includes 23,229 shares subject to warrants exercisable within 60 days of
December 1, 1999.
(11) Includes 135,773 shares subject to options exercisable within 60 days of
December 1, 1999.

PLAN OF DISTRIBUTION

We have been advised by the selling shareholders that they expect to offer
their shares through brokers or dealers to be selected by it from time to time.
The shares may be offered for sale through the Nasdaq National Market, in the
over-the-counter market, in one or more private transactions, or a combination
of such methods of sale, at prices and on terms then prevailing, at prices
related to such prices, or at negotiated prices. Each selling shareholder may
pledge all or a portion of the selling shareholder's shares as collateral in
loan transactions. Upon default by the selling shareholder, the pledgee in such
loan transaction would have the same rights of sale as the selling shareholder
under this prospectus to the extent it remains part of an effective registration
statement. Each selling shareholder may also transfer shares by gift and upon
any such transfer the donee would have the same rights of sale as the selling
shareholder under this prospectus. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 of the Securities Act of
1933, as amended, may be sold under Rule 144 rather than pursuant to this
prospectus. Finally, each selling shareholder and any brokers and dealers
through whom sales of the shares are made may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, and the commissions or
discounts and other compensation paid to such persons may be regarded as
underwriters' compensation.

LEGAL MATTERS

The validity of the common stock offered hereby and the issuance thereof
will be passed upon for eShare by Morris, Manning & Martin, L.L.P., Atlanta,
Georgia.

EXPERTS

The financial statements and schedule of eShare Technologies, Inc.
(formerly Melita International Corporation) as of December 31, 1997 and 1998 and
for the years ended December 31, 1997 and 1998 incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their reports. In those reports, that firm states
that with respect to eShare.com, Inc. (formerly eShare Technologies, Inc.) its
opinion is based on the reports of other independent public accountants, namely
KPMG LLP. The financial statements and supporting schedule referred to above
have been included herein in reliance upon the authority of those firms as
experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

eShare is subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance with the Securities Exchange Act of
1934, files reports, proxy statements and other information with the Securities
and Exchange Commission. You may obtain such reports, proxy statements and other
information from the Securities and Exchange Commission's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549, or by calling the Securities
and Exchange Commission at 1-800-SEC-0330, or from the Securities and Exchange
Commission's Internet Web site at http:\\www.sec.gov.

21
<PAGE> 25

This prospectus is a part of a registration statement that eShare filed
with the Securities and Exchange Commission. The registration statement contains
more information than this prospectus, including certain exhibits. You can get a
copy of the registration statement from the Securities and Exchange Commission
at the address listed above or from its Web site.

DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

eShare's Amended and Restated Bylaws authorize eShare to indemnify any
present or former director, officer, employee, or agent of eShare, or a person
serving in a similar post in another organization at the request of eShare,
against expenses, judgments, fines, and amounts paid in settlement incurred by
him or her in connection with any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative,
to the fullest extent not prohibited by the Georgia Business Corporation Code,
public policy or other applicable law. The Georgia Business Corporation Code
authorizes a corporation to indemnify its directors, officers, employees, or
agents in terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities (including provisions permitting advances for
expenses incurred) arising under the Securities Act of 1933.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, or persons controlling the
registrant pursuant to the foregoing provisions, the registrant 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 of
1933 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 questions whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.

22
<PAGE> 26

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED IN CONNECTION
WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN SO
AUTHORIZED BY ESHARE OR ANY SELLING SHAREHOLDER. THIS PROSPECTUS DOES NOT
CONSTITUTE ANY OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION TO
WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.

---------------------

6,050,000 SHARES

(ESHARE LOGO)

COMMON STOCK

--------------------
PROSPECTUS
--------------------

DECEMBER 21, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 27

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The expenses relating to the registration of shares will be borne by
eShare. Such expenses are estimated to be as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 13,726
Accountants' fees and expenses.............................. 40,000
Legal fees and expenses..................................... 40,000
Miscellaneous............................................... 6,274
--------
Total Expenses.................................... $100,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Georgia Business Corporation Code permits a corporation to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of duty of care of other duty as a
director, provided that no provision shall eliminate or limit the liability of a
director: (A) for an appropriation, in violation of his duties, of any business
opportunity of the corporation; (B) for acts or omissions which involve
intentional misconduct or a knowing violation of law; (C) for unlawful corporate
distributions; or (D) for any transaction from which the director received an
improper personal benefit. This provision pertains only to breaches of duty by
directors in their capacity as directors (and not in any other corporate
capacity, such as officers) and limits liability only for breaches of fiduciary
duties under Georgia corporate law (and not for violation of other laws, such as
the federal securities laws). The eShare's Amended and Restated Articles of
Incorporation (the "Restated Articles") exonerate eShare's directors from
monetary liability to the extent permitted by this statutory provision.

eShare's Restated Articles and Amended and Restated Bylaws (the "Restated
Bylaws") also provide that eShare shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including any action by or in the right of eShare), by reason of
the fact that such person is or was a director or officer of eShare, or is or
was serving at the request of eShare as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including reasonable attorneys' fees), judgments, fines, and amounts
paid in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding, if such person acted in good faith and in
a manner such person reasonably believed to be in or not opposed to the best
interests of eShare (and with respect to any criminal action or proceeding, if
such person had no reasonable cause to believe such person's conduct was
unlawful), to the maximum extent permitted by, and in the manner provided by,
the Georgia Business Corporation Code.

Notwithstanding any provisions of eShare's Restated Articles and Bylaws to
the contrary, the Georgia Business Corporation Code provides that eShare shall
not indemnify a director or officer for any liability incurred in a proceeding
in which the director is adjudged liable to eShare or is subjected to injunctive
relief in favor of eShare: (1) for any appropriation, in violation of his
duties, of any business opportunity of eShare; (2) for acts or omissions which
involve intentional misconduct or a knowing violation of law; (3) for unlawful
corporate distributions; or (4) for any transaction from which the director or
officer received an improper personal benefit.

The officers and directors of eShare are entitled to indemnification by the
selling shareholders against any cause of action, loss, claim, damage or
liability to the extent it arises out of or is based upon the failure of the
selling shareholders (or his donees, legatees, or pledgees) and each underwriter
to comply with the prospectus delivery requirements under the federal securities
laws or any applicable state securities laws or upon any untrue statement or
alleged untrue statement or omission or alleged omission made in this

II-1
<PAGE> 28

registration statement and the prospectus contained herein, as the same shall be
amended or supplemented, made in reliance upon or in conformity with written
information furnished to eShare by such selling shareholder or such underwriter.

ITEM 16. LIST OF EXHIBITS.

The following exhibits are filed as part of, or are incorporated by
reference into, this report on Form S-3:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
5.1 -- Opinion of Morris, Manning & Martin, L.L.P. at to the
legality of the securities being registered.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of KPMG LLP.
23.3 -- Consent of Morris Manning & Martin, L.L.P. (included in
Exhibit 5.1).
24.1 -- Power of Attorney (include at Page II-4 of this Registration
Statement).
</TABLE>

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement.

(i) To include in any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by eShare
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934, as amended, that are incorporated by reference in this
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's Annual Report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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.

II-2
<PAGE> 29

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norcross, State of Georgia on the 20th day of
December, 1999.

ESHARE TECHNOLOGIES, INC.

By: /s/ ALEKSANDER SZLAM
------------------------------------
Aleksander Szlam
Chief Executive Officer

II-3
<PAGE> 30

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Aleksander Szlam and Gregory Riedel, jointly and
severally, as his true and lawful attorneys-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign a registration statement relating to the
registration of shares of common stock on Form S-3 and to sign any and all
amendments (including post effective amendments) to the registration statement,
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing required or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute, could
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<C> <S> <C>
/s/ ALEKSANDER SZLAM Chairman of the Board of December 20, 1999
- ----------------------------------------------------- Directors and Chief
Aleksander Szlam Executive Officer (Principal
Executive Officer)

/s/ JAMES P. TITO Vice Chairman of the Board December 20, 1999
- ----------------------------------------------------- of Directors and President
James P. Tito

/s/ GREGORY RIEDEL Vice President -- December 20, 1999
- ----------------------------------------------------- Administration, Chief
Gregory Riedel Financial Officer and
Treasurer (Principal
Financial Officer and
Principal Accounting
Officer)

/s/ ANDREW K. FILIPOWSKI Director December 20, 1999
- -----------------------------------------------------
Andrew K. Filipowski

/s/ DONALD L. HOUSE Director December 20, 1999
- -----------------------------------------------------
Donald L. House
</TABLE>

II-4
<PAGE> 31

EXHIBIT INDEX

The following exhibits are filed with or incorporated by reference into
this registration statement pursuant to Item 601 of Regulation S-K:

<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL PAGE
NUMBER DESCRIPTION NUMBER
- ------- ----------- ---------------
<C> <C> <S> <C>
5.1 -- Opinion of Morris, Manning & Martin, L.L.P. at to the
legality of the securities being registered. N/A
23.1 -- Consent of Arthur Andersen LLP. N/A
23.2 -- Consent of KPMG LLP.
23.3 -- Consent of Morris Manning & Martin, L.L.P. (included in
Exhibit 5.1). N/A
24.1 -- Power of Attorney (include at Page II-4 of this Registration
Statement). N/A
</TABLE>

<PAGE> 1
EXHIBIT 5.1

[MORRIS, MANNING & MARTIN, L.L.P. LETTERHEAD]

December 20, 1999

eShare Technologies, Inc.
5051 Peachtree Corners Circle
Norcross, Georgia 30092-2500

Re: Registration Statement on Form S-3

Gentlemen:

We have acted as counsel for eShare Technologies, Inc., a Georgia
corporation ("eShare"), in connection with the registration under the Securities
Act of 1933, as amended, pursuant to a registration statement on Form S-3, of a
proposed offering of 6,050,000 shares of eShare's common stock, no par value per
share ("Shares"), by certain shareholders of eShare.

We have examined such documents, corporate records, and other instruments
as we have considered necessary and advisable for purposes of rendering this
opinion. Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and validly issued, and are fully paid and
nonassessable.

This opinion is limited by and is in accordance with, the January 1, 1992,
edition of the Interpretive Standards applicable to Legal Opinions to Third
Parties in Corporate Transactions adopted by the Legal Opinion committee of the
Corporate and Banking Law Section of the State Bar of Georgia.

We hereby consent to the filing of this opinion as an exhibit to eShare's
registration statement on Form S-3 and to the reference to our firm under the
caption "Legal Matters" in the prospectus contained in the registration
statement.

Very truly yours,

MORRIS, MANNING & MARTIN, L.L.P.

By: /s/ Larry W. Shackelford
---------------------------------
Larry W. Shackelford, Partner

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EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report dated September 1, 1999 included in the Company's Form 8-K dated
December 20, 1999 and to all references to our firm included in this prospectus.
Our report dated January 30, 1999 included in the Company's Form 10-K for the
year ended December 31, 1998 is no longer appropriate since restated financial
statements have been presented giving effect to a business combination accounted
for as a pooling of interests.

Arthur Andersen LLP

Atlanta, Georgia
December 20, 1999

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EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
eShare Technologies, Inc.

We consent to the incorporation by reference in the registration statement on
Form S-3 of eShare Technologies, Inc. (formerly Melita International
Corporation) of our report, dated April 16, 1999, except as to note 12 which is
as of June 15, 1999, with respect to the balance sheets of eShare.com, Inc.
(formerly eShare Technologies, Inc.) as of December 31, 1998 and 1997, and the
related statements of operations, redeemable preferred stock and stockholders'
deficit and cash flows for the years then ended, and to the reference to our
firm under the heading "Experts" in the registration statement. Such report
appears in the Form 8-K of eShare Technologies, Inc., dated December 20, 1999.

KPMG LLP

Melville, New York

December 20, 1999