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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 2000
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
SAGENT TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-3225290
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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800 W. EL CAMINO REAL, SUITE 300
MOUNTAIN VIEW, CA 94040
(650) 815-3100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
KENNETH GARDNER
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
SAGENT TECHNOLOGY, INC.
800 W. EL CAMINO REAL, SUITE 300
MOUNTAIN VIEW, CA 94040
(650) 815-3100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
ARTHUR F. SCHNEIDERMAN, ESQ.
THOMAS C. KLEIN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(650) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box. [
]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER SHARE(2) PRICE(1)(2) REGISTRATION FEE
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Common Stock, no par value.... 2,609,634 $7.625 $19,898,459.25 $5,372.58
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(1) Pursuant to Rule 416 under the Securities Act, this Registration Statement
also relates to a presumably indeterminable number of shares of Common Stock
which are issuable upon stock splits, stock dividends, recapitalizations or
other similar transactions.
(2) Estimated solely for the purpose of computing the registration fee and based
on the average of the high and low sale prices of the Common Stock as
reported on the Nasdaq National Market on June 23, 2000, which was $7.625.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 30, 2000
SAGENT TECHNOLOGY, INC.
2,609,634 Shares
Of Common Stock
The selling stockholders listed inside are offering to sell up to 2,609,634
shares of Sagent Technology, Inc. common stock for their own account. We will
not receive any proceeds from such sales. We issued these shares of our common
stock to the selling stockholders in private transactions.
Our common stock is listed on the Nasdaq National Market under the symbol
"SGNT." On June 28, 2000, the last reported sale price for the common stock on
the Nasdaq National Market was $8.75 per share.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 9 BEFORE
MAKING A DECISION TO PURCHASE OUR STOCK.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2000.
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TABLE OF CONTENTS
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Where You Can Find More Information......................... 2
Special Note Regarding Forward-Looking Statements........... 3
About Sagent Technology..................................... 4
Risk Factors................................................ 11
Selling Stockholders........................................ 19
Plan of Distribution........................................ 20
Legal Matters............................................... 21
Experts..................................................... 21
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THE SELLING STOCKHOLDERS ARE OFFERING TO SELL, AND
SEEKING OFFERS TO BUY SHARES OF OUR COMMON STOCK ONLY IN JURISDICTIONS WHERE
OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK. IN THIS
PROSPECTUS, "SAGENT," "WE," "US," AND "OUR" REFER TO SAGENT TECHNOLOGY, INC. AND
ITS SUBSIDIARIES.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference facilities in Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC
located at 7 World Trade Center, Suite 1300, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this
offering is completed.
(1) Our Annual Report on Form 10-K for the year ended December 31,
1999;
(2) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
(3) Our Current Reports on Form 8-K/A dated February 11, 2000, and
February 28, 2000; and
(4) The description of our common stock contained in our registration
statement on Form 8-A dated January 29, 1999, including any amendments or
reports filed for the purpose of updating such description.
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You may request a copy of these filings, at no cost, by writing to us at
the following address:
Investor Relations
Sagent Technology, Inc.
800 W. El Camino Real, Suite 300
Mountain View, California 94040
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements deal with our
current plans, intentions, beliefs and expectations and statements of future
economic performance. Statements containing terms such as "believes," "does not
believe," "plans," "expects," "intends," "estimates," "anticipates" and other
phrases of similar meaning are considered to contain uncertainty and are
forward-looking statements.
Forward-looking statements involve known and unknown risks and
uncertainties which may cause our actual results in future periods to differ
materially from what is currently anticipated. We make cautionary statements in
certain sections of this prospectus, including under "Risk Factors." You should
read these cautionary statements as being applicable to all related
forward-looking statements wherever they appear in this prospectus, in the
materials referred to in this prospectus, in the materials incorporated by
reference into this prospectus, or in our press releases.
No forward-looking statement is a guarantee of future performance, and you
should not place undue reliance on any forward-looking statement. The risks set
out below are not the only risks we face.
If any of the following risks occur, our business, financial condition and
results of operations could be materially adversely affected. In such case, the
trading price of the common stock could decline.
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ABOUT SAGENT TECHNOLOGY
Sagent Technology is a provider of Real-time eBusiness Intelligence
Solutions that enable enterprises to win, retain, and grow new customers and
improve operational effectiveness. We develop, market, and support products and
services that help businesses collect, analyze, understand, and act on customer
and operational information in real-time. Sagent's products and services provide
a way for an organization's employees, customers, and partners to use the World
Wide Web to examine the internal data they already have and to supplement that
data with external, value-added information such as demographic, geographic, or
other content. We refer to our products as "Real-time eBusiness Intelligence"
solutions because they enable organizations to rapidly make more informed,
intelligent decisions and to spread that ability across the enterprise.
BACKGROUND
Today, information about an organization's customers, products and
operations is one of its most important strategic assets. In particular, as
organizations have begun to pursue more complex operational strategies, their
need for timely information has increased. In addition, as businesses continue
to streamline their organizational structures to improve time to market and
responsiveness to rapidly changing market conditions, decision making authority
is expected to become more distributed, thus heightening the need for broader
dissemination of information throughout the enterprise. Most recently, the rapid
adoption of the Internet and the Web has given organizations the ability to
share information internally and externally on a cost-effective basis and has
dramatically increased the number of people who can receive and access
information.
To be successful in the Internet age, companies must use the World Wide Web
to grow their top-line revenue-identifying, winning, and keeping successful
customers-and to manage their bottom-line organizational performance-monitoring
operational and financial data to track the "health" of their enterprise.
Increased competition places a premium on finding and retaining customers, while
reduced margins and shortened business cycles make it crucial to control costs
and streamline operations. Organizations need to put all of their information
assets to work to attract and retain customers, while at the same time
increasing operational efficiencies.
The Internet offers new ways of identifying, qualifying and selling to
customers while they are at a company's web site, call center, or store
location. Many businesses use data about customers' prior buying habits to
target marketing activities and create compelling offers for new products or
services. But this historical data only delivers part of the picture.
Integrating the data businesses collect during each customer interaction with
value-added external information-such as demographic, firmographic, and
geographic content-provides a clearer picture of who a company's customers are
and what they really need. This enables companies to improve customer
relationships and identify new opportunities for selling, cross-selling, and
up-selling.
In addition to gaining a better understanding of customers, today's
companies also require a clear picture of their own operations in order to
succeed in the competitive environment of eBusiness. Enterprises need to
understand exactly what is happening within their organization and use that
knowledge to rapidly reshape and transform the way they run their business.
Companies that cannot respond to changing market conditions will be quickly
surpassed by their more nimble competitors.
To improve the timeliness and quality of critical business decisions,
companies must give front-line managers the ability to rapidly develop, track,
and respond to key business metrics. Empowering employees to make better
operational decisions requires an information supply chain that delivers a
thorough understanding of business processes. Unfortunately, the critical
business information
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companies need to facilitate strategic decision-making is often locked up in
multiple, disparate applications, databases, and legacy systems.
SAGENT'S PRODUCTS
Sagent provides Real-time eBusiness Intelligence solutions to help
companies maximize revenue, reduce costs, and streamline business processes.
These solutions include:
- A suite of integrated software products that provide a platform for
collecting, organizing, and manipulating information from a variety of
sources
- Software tools that enhance enterprise data by dynamically integrating it
with demographic information, geographic data, and other value-added
content
- Web-based services that allow customers to access our data enhancement
tools over the internet, enabling them to improve the quality and
consistency of their internal data and to supplement this data with
value-added content
- Consulting services to help customers rapidly and effectively install,
configure, and deploy Sagent's software and services
SOFTWARE PRODUCTS
Our main product, the Sagent Solution, gathers data from a variety of
sources, such as relational databases, mainframe databases, and the Internet,
and organizes that data into a common structure or repository known as a data
mart. A data mart is used to more efficiently manage a subset of corporate data
focused on the needs of a specific group of users. Once data is organized into
our data mart, the Sagent Solution product suite allows organizations to more
efficiently analyze the data and provides access to the information through
personal computers, reports, and, importantly, through Web browsers over the
Internet. We also provide design, systems engineering and education services to
facilitate successful customer implementations.
The Sagent Solution includes a number of components:
- Sagent Server -- a high-performance application server for data
extraction and transformation, data and metadata repository storage, data
movement and caching.
- Sagent Admin -- a tool that enables system administrators to control a
distributed network of data stores from a single location. Sagent Admin
provides a single, integrated view of all system components.
- Sagent Design Studio -- a graphical environment for administrators to
develop Data Flow plans, data staging and storage, metadata creation and
online analysis. Developers use this component to define their data
extraction, transformation and movement requirements, while power users
utilize it to perform ad hoc queries, online analysis and reporting.
- Sagent Information Studio -- a graphical interface for easily accessing
and sharing information. This client-side component enables users to
build powerful data requests, store result sets for easy reuse and
collaborate with other users.
- Sagent Analysis -- an Information Studio plug-in for analyzing Sagent
data, including cross-tabulation, slicing, drilling, charting and
manipulation of information from relational data sources.
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- Sagent Reports -- an enterprise-level reporting tool that enables users
to rapidly create, publish and view graphically rich reports and forms.
- Sagent WebLink -- a Web interface that provides access to Sagent
components through popular browsers. Sagent WebLink enables users to run
data requests and view result sets quickly and easily from their
browser-equipped desktop.
Customers purchase the Sagent Solution product suite for three primary
reasons. First, it combines in one integrated product key functions that a
customer requires, such as extracting information from multiple data sources and
providing end-users with the capability to analyze information and publish
reports. This saves time and money otherwise spent combining many different
products from many different vendors. Second, the Sagent Solution product suite
can handle a very large number of users and a very large amount of data. This
allows our product suite to scale to the increasing numbers of employees or
customers who need access to information from inside organizations or through
the Internet. Third, the Sagent product suite is designed for the Internet.
Sagent has invested significant resources in technology to rapidly distribute
information over the Web.
Through our December, 1999 acquisition of Qualitative Marketing Software,
Inc. (QMS), Sagent also provides tools and services for data quality,
enhancement and profiling. These products enable our customers to supplement the
data they already have with value-added external information-such as
demographic, firmographic, and geographic content. This enables a number of
important applications for marketing, customer service, and customer
relationship management, including:
- Data Enhancement -- drawing from Census demographics and national
consumer and business data, records are appended with neighborhood,
household, and business information.
- Spatial Enhancement and Analysis -- using precise geographic information,
records are appended with address-level latitude and longitude
coordinates.
- Address Standardization, Correction and Verification -- records are
checked against the official Postal Service deliverable address database.
Incorrect address elements are corrected and records are appended with
ZIP+4, carrier route, delivery point bar code data, line-of-travel codes
and more.
- Householding and Record Consolidation -- batch processing technology is
used to consolidate data from diverse sources and combine records of
people living under the same roof into a single record.
- Move Updating -- our technology matches customer and prospect databases
against approximately 16 million individuals and businesses in the USPS
FASTforward database that have changed addresses during the past six
months. When a match is found, that record is updated automatically.
SERVICES
To complement its product offering, Sagent also offers professional
consulting and educational services to help customers achieve fast and full
value from their implementation of the Sagent Solution. Sagent Professional
Services, or SPS, provides a wealth of product and industry experience-from
project definition and application development to deployment, training, and
ongoing support.
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MARKETING AND CUSTOMERS
Sagent currently has more than 1,000 customers around the world and across
such diverse industries as e-commerce, financial services, healthcare,
insurance, and telecommunications. These include such market leaders as Sony
Online Entertainment, MapQuest.com, GE Capital, Outpost.com, Ticketmaster,
Kemper National Insurance, Royal & SunAlliance, United Healthcare and AT&T.
Sagent has several strategic relationships, including ADP, Advent, CommerceOne,
Compaq, EDS, IBM, Microsoft, Siebel and USinternetworking.
Sagent is focused on building market awareness and acceptance of Sagent and
its products as well as on developing strategic partnerships. Sagent's marketing
strategy includes several components: image and awareness building, direct
marketing to both prospective and existing customers, a strong Web presence, and
marketing activities with key local and global partners. Sagent's corporate
marketing strategy includes extensive public relations activities, corporate
advertising, presentations at conferences and trade shows, and working with key
analysts and other market influencers. Sagent's direct marketing activities
include participation in selected trade shows and conferences, targeted
advertising, direct mail efforts to existing and prospective customers, and
local, regional and Web-based seminars. Sagent's corporate Web site is also used
to generate leads for follow-up by Sagent's sales organization. Sagent's partner
and channel marketing activities help to recruit, train, support and conduct
cooperative marketing with technology partners, resellers and VARs. These
programs help to foster strong relationships between Sagent and its partners.
The marketing organization also provides a wide-range of programs, materials and
events to support the sales organization in its efforts.
The sales and marketing staff is based at Sagent's corporate headquarters
in Mountain View, California. Sagent also has field sales offices in 29
locations around the United States.
PRODUCT DEVELOPMENT
Sagent intends to continue making substantial investments in research and
development and related activities to maintain and enhance the company's product
lines. Product development is based upon a consolidation of the requirements
from existing customers, technical support and engineering. The development
group infrastructure provides documentation, quality assurance and delivery and
support capabilities (as well as product design and implementation) for Sagent's
products.
Continued integration of the Sagent Solution platform products with the
tools and services acquired from QMS will be a major development focus in 2000.
There can be no assurance that Sagent will be able to complete these engineering
activities in a timely or successfully manner, and the failure to do so could
have a material adverse effect upon Sagent's business, operating results and
financial condition.
COMPETITION
Sagent operates in an intensely competitive, highly fragmented, and rapidly
changing market. Sagent's current and potential competitors offer a variety of
software solutions and generally fall within five categories:
- vendors of packaged analytic applications such as Broadbase, e.Piphany,
and Hyperion
- vendors of business intelligence software such as Cognos, Business
Objects, Brio, MicroStrategy, and Hummingbird;
- vendors of data warehousing/data mart infrastructure environments such as
Informatica, Ardent, and Acta;
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- database vendors that offer products which operate specifically with
their proprietary database, such as Oracle, IBM, and Informix;
- data providers and distributors such as Axciom and HotData
The variety of current and potential competitors, and the emerging nature
of the market makes Sagent's competitive position uncertain. Sagent has
experienced and expects to continue experiencing increased competition from
current and potential competitors, many of whom have significantly greater
financial, technical, marketing and other resources than Sagent. Such
competitors may be able to devote greater resources to the development,
promotion and sales of their products than Sagent, or to respond more quickly to
changes in customer requirements and/or evolving technology. Sagent anticipates
additional competition as other vendors enter the market and new products and
technologies are introduced. Increased competition could result in price
reductions, fewer customer orders, reduced gross margins, longer sales cycles
and loss of market share, any of which could materially and adversely affect
Sagent's business, operating results and financial condition.
Current and potential competitors may make strategic acquisitions or
establish cooperative relationships among themselves or with third parties,
thereby increasing the ability of their products to address the needs of
Sagent's prospective customers. Sagent's current or future indirect channel
partners may establish cooperative relationships with current or potential
competitors of Sagent, thereby limiting Sagent's ability to sell its products
through particular distribution channels. Accordingly, it is possible that new
competitors or alliances among current and new competitors may emerge and
rapidly gain significant market share. Such competition could materially
adversely affect Sagent's ability to obtain new licenses, and maintenance and
support renewals for existing licenses, on terms favorable to Sagent. Further,
competitive pressures may require Sagent to reduce the price of its products,
which could have a material adverse effect on Sagent's business, operating
results and financial condition. There can be no assurance that Sagent will be
able to compete successfully against current and future competitors, and the
failure to do so could have a material adverse effect upon Sagent's business,
operating results and financial condition.
Sagent competes on the basis of the following factors:
- product features;
- product quality;
- product performance;
- analytical capabilities;
- access to external information;
- user scalability;
- data volume scalability;
- ease of use;
- customer support;
- implementation services, and
- price.
Sagent believes it presently competes favorably with respect to each of
these factors. However, Sagent's market is still evolving and there can be no
assurance that Sagent will be able to compete
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successfully against current and future competitors, and the failure to do so
successfully could have a material adverse effect on Sagent's business,
operating results and financial condition.
INTELLECTUAL PROPERTY
Sagent currently relies primarily on a combination of copyright and
trademark laws, trade secrets, confidentiality procedures and contractual
provisions to protect its proprietary rights. Sagent also believes that factors
such as the technological and creative skills of its personnel, new product
developments, frequent product enhancements, name recognition and reliable
product maintenance are essential to establishing and maintaining a technology
leadership position.
Sagent seeks to protect its software, documentation and other written
materials under trade secret and copyright laws, which afford only limited
protection. There can be no assurance that Sagent's patent application will
result in the issuance of a patent, or if issued, will not be invalidated,
circumvented or challenged, or that the rights granted thereunder, if any, will
provide competitive advantages to Sagent or that any of Sagent's future patent
applications, if any, will be issued with the scope of the claims sought by
Sagent, if at all.
There can be no assurance that others will not develop technologies that
are similar or superior to Sagent's technology or design around any patent that
may come to be owned by Sagent. Despite Sagent's efforts to protect its
proprietary rights, unauthorized parties may attempt to copy aspects of Sagent's
products or to obtain and use information that Sagent regards as proprietary.
Policing unauthorized use of Sagent's products is difficult, and while Sagent is
unable to determine the extent to which piracy of its software products exists,
software piracy can be expected to be a persistent problem. In addition, the
laws of some foreign countries do not protect Sagent's proprietary rights as
fully as do the laws of the United States. There can be no assurance that
Sagent's means of protecting its proprietary rights in the United States or
abroad will be adequate or that competitors will not independently develop
similar technology.
Sagent has entered into source code escrow agreements with a number of
customers and indirect channel partners requiring release of source code. Such
agreements provide that the contracting party will have a limited, non-exclusive
right to use the code subject to the agreement in the event that:
- there is a bankruptcy proceeding by or against Sagent;
- if Sagent ceases to do business; or
- in some cases, if Sagent fails to meet its contractual obligations.
Sagent expects that software product developers will increasingly be
subject to infringement claims as the number of products and competitors in
Sagent's industry segment grows and the functionality of products in different
industry segments overlaps. Any 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 Sagent to enter into royalty or licensing agreements.
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Such royalty or licensing agreements, if required, may not be available on
acceptable terms, if at all. In the event of a successful claim of product
infringement against Sagent and its failure or inability to license the
infringed or similar technology, Sagent's business, operating results and
financial condition could be materially adversely affected.
Finally, in the future Sagent may rely upon software that it may license
from third parties, including software that may be integrated with Sagent's
internally developed software and used in Sagent's products to perform key
functions. There can be no assurance that these third-party software licenses
will be available on commercially reasonable terms. Sagent's inability to obtain
or maintain any third party software licenses could result in shipment delays or
reductions until equivalent software could be developed, identified, licensed
and integrated, which could have a material adverse effect on Sagent's business,
operating results and financial condition.
EMPLOYEES
As of December 31, 1999, Sagent had 320 employees, including 129 in sales
and marketing, 70 in services and support, 91 in research and development and 30
in general and administrative functions. Sagent believes its employee relations
are good. Sagent's success depends to a significant degree upon the continued
contributions of its key management, engineering, sales and marketing personnel,
many of whom would be difficult to replace.
Sagent believes its future success will also depend in large part upon its
ability to attract and retain highly skilled managerial, engineering, sales and
marketing and finance personnel. Competition for such personnel is intense, and
there can be no assurance that Sagent will be successful in attracting and
retaining such personnel. The loss of the services of any of the key personnel,
the inability to attract or retain qualified personnel in the future, or delays
in either hiring required personnel, or the rate at which new people become
productive, particularly sales personnel and engineers, could have a material
adverse effect on Sagent's business, operating results and financial condition.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing Sagent Technology. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also impair our
business operations. If any of the following risks actually occur, our business,
results of operations or cash flows could be adversely affected. In those cases,
the trading price of our common stock could decline, and you may lose all or
part of your investment.
LIMITED OPERATING HISTORY, UNCERTAINTY OF FUTURE OPERATING RESULTS
We commenced operations in June 1995 but we did not begin selling our first
products until the fourth quarter of 1996, and a number of new products and new
versions of existing products were subsequently introduced. As a result, we have
experienced the risks and difficulties frequently encountered by early stage
companies, particularly companies in new and rapidly evolving markets. We
incurred net losses and losses from operations for the period ended December 31,
1995 and each of year ended thereafter. As of March 31, 2000, we had an
accumulated deficit of approximately $45.2 million. Since inception, we have
funded our business primarily from the sale of our stock and by borrowing funds,
not from cash generated by our business. We expect to continue to incur
significant sales and marketing, research and development and general and
administrative expenses Although our revenues have grown in each year since
formation, we cannot be certain that we will sustain or increase our revenues or
improve our operating results in the future.
QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY
We believe that quarter-to-quarter comparisons of our operating results are
not a good indication of future performance. Although our operating results have
generally improved from quarter to quarter in the past, our future operating
results may not follow any past trends. It is likely that in some future quarter
our operating results may be below the expectation of public market analysts and
investors due to factors beyond our control, and as a result, the price of our
common stock may fall.
Factors which may cause our future operating results to be below
expectations and cause our stock price to fall include:
- The demand for and acceptance of Enterprise Intelligence solutions in
general and our products, enhancements and services
- The maintenance and development of our strategic relationships with
enterprise application vendors, resellers and distributors
- The introduction, timing and competitive pricing of our products and
services and those of our competitors
- The size and timing of significant orders
- The expansion and rate of success of our direct sales force and indirect
distribution channels both domestically and internationally
- The attraction and retention of key personnel, particularly in our sales,
services and support groups
- The commercialization of our products incorporating advanced technologies
- The growth of the market for Enterprise Intelligence solutions
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<PAGE> 13
- The timing and successful integration of and costs related to
technologies and businesses we may acquire in the future
We plan to significantly increase our operating expenses to expand our
administration, consulting and training, maintenance and technical support,
research and development and sales and marketing groups. Our operating expenses
are based on our expectations of future revenues and are relatively fixed in the
short term. If revenues fall below our expectations in any quarter and we are
not able to quickly reduce our spending in response, our operating results would
be lower than expected and our stock price may fall.
WE MAY LOSE EXISTING CUSTOMERS OR BE UNABLE TO ATTRACT NEW CUSTOMERS IF WE DO
NOT DEVELOP NEW PRODUCTS
If we are not able to maintain and improve our product line and develop new
products that keep pace with competitive product introductions and technological
developments, satisfy diverse and evolving customer requirements and achieve
market acceptance, we may lose existing customers or be unable to attract new
customers. We may not be successful in developing and marketing this new
version, other product enhancements or new products that respond to
technological advances by others on a timely or cost-effective basis, or that
these products, if developed, will achieve market acceptance.
We have experienced delays in releasing new products and product
enhancements and may experience similar delays in the future. These delays or
problems in the installation or implementation of our new releases may cause
customers to forego purchases of our products to purchase those of our
competitors.
CHANGES IN INTERNET TECHNOLOGY AND OPERATING SYSTEM STANDARDS MAY IMPEDE MARKET
ACCEPTANCE FOR OUR PRODUCTS
Rapidly changing Internet technology and operating system standards may
impede market acceptance for our products. We have a software application known
as WebLink that allows users to query, analyze and report business information
from a Web browser. This product has been designed based upon prevailing
Internet technology. If new Web technologies emerge that are incompatible with
deployment of our WebLink applications, our WebLink product may become obsolete
and existing and potential new customers may seek alternatives to our products.
We may not be able to quickly adapt our products to any new Internet technology.
Additionally, our products allow connectivity to databases on a variety of
operating systems, including mainframes, AS/400, UNIX and Windows NT. However,
our application server component currently runs only on the Windows NT operating
system. Therefore, our ability to increase sales of our products will depend on
the continued acceptance of the Windows NT operating system. To the extent that
potential customers use UNIX operating systems as their application server, we
would need to develop a UNIX product. The development of a UNIX product would
require us to commit a substantial investment of resources, and we may not
successfully introduce such a product on a timely or cost-effective basis, or at
all, which could lead potential customers to choose alternatives to our
products.
ENTERPRISE INTELLIGENCE SOFTWARE MARKETS MAY NOT GROW
Since all of our revenues are attributable to the sale of Enterprise
Intelligence software and related maintenance, consulting and training services,
if the market for Enterprise Intelligence software does not grow, our business
will not grow. We expect Enterprise Intelligence software and services to
account for substantially all of our revenues for the foreseeable future.
Although demand
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<PAGE> 14
for Enterprise Intelligence software has grown in recent years, the market may
not continue to grow or, even if the market does grow, businesses may not adopt
our products.
We are focusing our selling efforts on large, enterprise-wide
implementations of our products, and we expect such sales to constitute an
increasing portion of any future revenue growth. While we have devoted
significant resources to promoting market awareness of our products and the
problems such products address, we do not know whether these efforts will be
sufficient to support significant growth in the market for Enterprise
Intelligence products.
IF OUR RELATIONSHIPS WITH CHANNEL PARTNERS ARE NOT SUCCESSFUL AND IF WE CANNOT
RECRUIT ADDITIONAL CHANNEL PARTNERS WE MAY NOT BE ABLE TO EXPAND OUR SALES
In addition to our direct sales force, we rely on successful relationships
with a variety of channel partners, such as enterprise application vendors,
resellers and distributors, for licensing and support of our products in the
United States and internationally. If we cannot maintain successful
relationships with these partners and cannot recruit additional strategic
partners, we believe that we will have difficulty expanding the sales of our
products. Our enterprise application vendor partners resell our products
incorporated in their own software application. In addition, our channel
partners offer products of several different companies, including, in some
cases, products that compete with our products. These strategic partners may not
develop or customize our applications to their needs or devote adequate
resources to selling our products.
We intend to expand our relationships with strategic partners and to
increase the proportion of our customers licensed through these indirect
channels. We may not be able to maintain strategic partnerships and attract
additional strategic partners that will market our products effectively and will
be qualified to provide timely and cost-effective customer support and service.
Further, our relationships with our strategic partners may not generate enough
royalty revenue to offset the significant resources used to develop these
channels. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business -- Sales and Marketing."
WE MAY NOT BE ABLE TO MANAGE OUR GROWTH SUCCESSFULLY OR SUSTAIN AND MANAGE
GROWTH RATES WE HAVE EXPERIENCED IN THE PAST
Our growth has placed, and our anticipated future growth will continue to
place, a significant strain on our management systems and controls. If we cannot
effectively establish and improve our processes we may not be able to manage our
growth successfully or sustain and manage the growth rates we have experienced
in the past.
We have grown rapidly and will need to continue to grow in all areas of
operation in order to execute our business strategy. Our total number of
employees grew from 152 on December 31, 1998 to 320 on December 31, 1999, and we
anticipate further significant increases in the number of employees. Sustaining
our growth has placed significant demands on management as well as on our
administrative, operational and financial resources and controls. In particular,
we need to substantially upgrade our enterprise resource planning functions,
including accounting, order entry and customer entry, which will become
insufficient as we grow. We also will need to institute new systems such as
human resource management and time and billing. See "Business -- Sales and
Marketing."
WE INTEND TO EXPAND INTERNATIONAL OPERATIONS BUT WE MAY ENCOUNTER A NUMBER OF
PROBLEMS IN DOING SO WHICH COULD LIMIT OUR FUTURE GROWTH
We may not be able to successfully market, sell, deliver and support our
products and services internationally. Our failure to manage our international
operations effectively could limit the future
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<PAGE> 15
growth of our business. International sales represented approximately 12.2% of
our total revenue for the year ended December 31, 1999. We conduct our
international sales through local subsidiaries in the United Kingdom, Germany,
France, Japan, Brazil, and Canada and through distributor relationships in,
Benelux, South Africa and eight Pacific Rim countries. The expansion of our
existing international operations and entry into additional international
markets will require significant management attention and financial resources to
open additional international offices and hire international sales personnel.
Localizing our products is difficult and may take longer than we anticipate due
to difficulties in translation and delays we may experience in recruiting and
training international staff. In addition, we currently have limited experience
in developing local versions of our products, as well as marketing, selling and
supporting our products and services overseas. See "Business -- Sales and
Marketing."
OUR MARKETS ARE HIGHLY COMPETITIVE AND COMPETITION COULD HARM OUR ABILITY TO
SELL PRODUCTS AND SERVICES AND REDUCE OUR MARKET SHARE
Competition could seriously harm our ability to sell additional software
and maintenance and support renewals on prices and terms favorable to us.
Additionally, if we cannot compete effectively, we may lose market share. The
markets for our products are intensely competitive and subject to rapidly
changing technology. We compete against providers of decision support software,
data warehousing software and enterprise application software. We also compete
with providers of e-Business software, which allows for the electronic delivery
of products and services that enable commerce among businesses and end users.
Companies in each of these areas may expand their technologies or acquire
companies to support greater Enterprise Intelligence functionality and
capability, particularly in the areas of query response time and the ability to
support large numbers of users. We may also face competition from vendors of
products and turn-key solutions for e-Business applications that include
Internet based information functionality.
Many of our competitors have longer operating histories, significantly
greater financial, technical, marketing or other resources, or greater name
recognition than we do. Our competitors may be able to respond more quickly than
we can to new or emerging technologies and changes in customer requirements. See
"Business -- Competition."
OUR OPERATING RESULTS MAY VARY SIGNIFICANTLY DUE TO OUR LENGTHY SALES AND
IMPLEMENTATION CYCLES FOR OUR PRODUCTS WHICH COULD CAUSE OUR STOCK PRICE TO FALL
Because our products and services have lengthy sales and implementation
cycles, it is difficult for us to forecast the timing and recognition of
revenues from sales of our products and services. Since we are unable to control
many of the factors that will influence our customers' buying decisions, the
lengthy sales cycle could cause our operating results to be below the
expectations of analysts and investors, which could cause our stock price to
fall.
A key element of our strategy is to market our products and services to
large organizations with significant data management and access needs. These
customers take an extended time evaluating our products before purchasing them.
The period of time between initial customer contact and a purchase order may
span six months or more. Our products have had, and we expect them to continue
to have, an even longer sales cycle in international markets than in the United
States and Canada. During the evaluation period, a variety of factors may lead
customers to not purchase or scale down orders of our products including:
- Reductions in demand for Enterprise Intelligence solutions
- Introduction of new products by competitors or pricing pressures
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<PAGE> 16
- Changes in our customers' budgets and purchasing priorities
- Diversion of resources and management's attention to other information
technology issues
In addition, we often must provide a significant level of education to our
prospective customers regarding the use and benefit of our products, which may
cause additional delays during the evaluation and acceptance process. See
"Business -- Sales and Marketing."
OUR EXECUTIVE OFFICERS AND KEY PERSONNEL ARE CRITICAL TO OUR BUSINESS AND THESE
OFFICERS AND KEY PERSONNEL MAY NOT REMAIN WITH US IN THE FUTURE
Our future success depends upon the continued service of our executive
officers and other key employees as well as our ability to hire a significant
number of new employees. We are particularly dependent on the continued services
of employees in our professional services and sales groups. Competition for
these individuals is intense, and we may not be able to attract, assimilate or
retain additional highly qualified personnel in the future.
In particular, it would be difficult for us to replace the services of
Kenneth C. Gardner, our co-founder, President and Chief Executive Officer, John
E. Zicker, our co-founder, Executive Vice President, Technology, and Chief
Technology Officer, Vince De Gennaro, our Executive Vice President, Sales,
Malcolm G.R. Hobbs, Vice President, Marketing. We do not maintain "key-person"
life insurance policies covering any of our employees.
OUR ACQUISITIONS COULD BE DIFFICULT TO INTEGRATE, DISRUPT OUR BUSINESS AND
DILUTE STOCKHOLDER VALUE
We intend to make investments in or acquire complementary companies,
products and technologies. We have limited organizational experience in these
matters and will need to develop the relevant skills if we are to be successful
in any such endeavor. Any development of these skills could consume management's
time and other resources. If we buy a company, we could have difficulty in
assimilating that company's operations. In addition, we may be unsuccessful in
retaining the key personnel of the acquired company. Moreover, we currently do
not know and cannot predict the accounting treatment of any such acquisition, in
part because we cannot be certain what accounting regulations, conventions or
interpretations may prevail in the future. If we acquire complementary
technologies or products, we could experience difficulties assimilating the
acquired technology or products into our operations. These difficulties could
disrupt our ongoing business, distract our management and employees and increase
our expenses. Furthermore, we may have to incur debt or issue equity securities
to pay for any future acquisitions, the issuance of which could be dilutive to
our existing stockholders, and adversely affect the price of our common stock.
We have no significant history of operations on a combined basis with QMS
which we acquired in December 1999 in a stock exchange transaction. Accordingly,
the historical financial statements and pro forma financial information
presented in our Form 10-k for the year ended December 31, 1999 and our Form
10-Q for the quarter ended March 31, 2000 may not be indicative of the results
that would have been obtained had the acquisition occurred prior to the
commencement of the periods covered therein. We may not be successful in
integrating the operations and personnel of QMS into our business, incorporating
the QMS products and any other acquired technologies into our product lines,
derive significant future sales from QMS products. We may also not be able to
establish and maintain uniform standards, controls procedures and policies, or
avoid the impairment of relationships with employees and customers as a result
of changes in management. To the extent that we are unable to do these things,
our business, financial condition and results of operations would be materially
affected.
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<PAGE> 17
FAILURE OF COMMERCIAL USERS TO ACCEPT INTERNET SOLUTIONS COULD LIMIT OUR FUTURE
GROWTH
A key element of our strategy is to offer users the ability to access,
analyze and report information from a data server through a Web browser. Our
growth would be limited if businesses do not accept Internet solutions or
perceive them to be cost-effective. Continued viability of the Internet depends
on several factors, including:
- Third parties' abilities to develop new enabling technologies in a timely
manner
- The Internet's ability to handle increased activity
- The Internet's ability to operate as a fast, reliable and secure network
- Potential changes in government regulation
Moreover, critical issues concerning the commercial use of the Internet,
including data corruption, cost, ease of use, accessibility and quality of
service, remain unresolved and may negatively affect commerce and communication
on the Internet. These issues will need to be addressed in order for the market
for our products and services to grow.
WE MAY NEED TO BRING INFRINGEMENT CLAIMS OR BE SUBJECTED TO
INFRINGEMENT -- TIMELINE, INC. HAS FILED AN INFRINGEMENT SUIT AGAINST US
Our intellectual property is important to our business. We expect that we
could be subject to intellectual property infringement claims as the number of
our competitors grows and the functionality of our applications overlaps with
competitive offerings. These claims, even if not meritorious, could be expensive
and divert our attention from operating our company. If we become liable to
third parties for infringing their intellectual property rights, we would be
required to pay a substantial damage award and to develop noninfringing
technology, obtain a license or cease selling the applications that contain the
infringing intellectual property. We may be unable to develop noninfringing
technology or obtain a license on commercially reasonable terms, or at all. In
addition, we may not be able to protect against misappropriation of our
intellectual property. Third parties may infringe upon our intellectual property
rights, we may not detect this unauthorized use and we may be unable to enforce
our rights.
If we become subject to litigation it could be costly and time consuming to
defend and distract us from focusing on our business and operations.
On March 22, 1999 Timeline, Inc. filed a complaint against Sagent in
Federal District Court alleging that Sagent's DMS product suite infringes one or
more of the claims of a Timeline patent. Sagent filed its original answer to the
Complaint and asserting, among other things, that the Timeline patent was
invalid and unenforceable. Sagent is presently rigorously defending the suit.
The Lawsuit has been set for trial on July 10, 2000. See "Business -- Legal
Proceedings."
IF WE LOSE KEY LICENSES WE MAY BE REQUIRED TO DEVELOP OR LICENSE ALTERNATIVES
WHICH MAY CAUSE DELAYS OR REDUCTIONS IN SALES
We rely on software that we have licensed from Opalis S.A. to perform key
functions of our Sagent Automation product which automates common tasks in
managing data. We also rely on software we have licensed from Microsoft
Corporation to allow users to be able to customize the user interface provided
by our Sagent Design Studio product. These licenses may not continue to be
available to us on commercially reasonable terms. The loss of either of these
licenses could result in delays or reductions of shipments of our product suite
until equivalent software could be developed,
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<PAGE> 18
identified, licensed and integrated. If customers require the automation and/or
the user interface customization features when licenses for either of those is
not available, they may delay or decline to purchase our product suite.
IF WE DISCOVER SOFTWARE DEFECTS WE MAY HAVE PRODUCT-RELATED LIABILITIES WHICH
MAY LEAD TO LOSS OF REVENUE OR DELAY IN MARKET ACCEPTANCE FOR OUR PRODUCTS
Our software products are internally complex and may contain errors,
defects or failures, especially when first introduced or when new versions are
released. We test our products extensively prior to releasing them; however, in
the past we have discovered software errors in some of our products after their
introduction. Despite extensive testing, we may not be able to detect and
correct errors in products or releases before commencing commercial shipments,
which may result in loss of revenue or delays in market acceptance.
Our license agreements with our customers typically contain provisions
designed to limit our exposure to potential product liability claims. All
domestic and international jurisdictions may not enforce these limitations.
Although we have not experienced any product liability claims to date, we may
encounter such claims in the future. Product liability claims, whether or not
successful, brought against us could divert the attention of management and key
personnel and could be expensive to defend.
IF WE DO NOT KEEP PACE WITH TECHNOLOGICAL CHANGE OUR PRODUCT MAY BE RENDERED
OBSOLETE AND OUR BUSINESS MAY FAIL
Our industry is characterized by rapid technological change, changes in
customer requirements, frequent new product introductions and enhancements and
emerging industry standards. In order to achieve broad customer acceptance, our
products must be compatible with major software and e-commerce applications and
operating systems. We must continually modify and enhance our products to keep
pace with changes in these applications and systems. Internet selling system
technology is complex and new products enhancements can require long development
and testing periods. If our products were to be incompatible with a popular new
systems or applications, our business would be significantly harmed. In
addition, the development of entirely new technologies replacing existing
software could lead to new competitive products that have better performance or
lower prices than our products and could render our products obsolete.
OUR OFFICERS, DIRECTORS AND AFFILIATED ENTITIES WILL HAVE SIGNIFICANT CONTROL
OVER US AND MAY APPROVE OR REJECT MATTERS CONTRARY TO YOUR VOTE
Our executive officers and directors, together with their affiliates,
beneficially own a significant percentage of our outstanding common stock
following as of February 29, 2000. These stockholders, if acting together, will
be able to significantly influence all matters requiring approval by our
stockholders, including the election of directors and the approval of mergers or
similar transactions even if other stockholders disagree.
WE HAVE ANTI-TAKEOVER DEFENSES THAT COULD DELAY OR PREVENT AN ACQUISITION OF OUR
COMPANY
Provisions of our certificate of incorporation, bylaws, other agreements
and Delaware law could make it more difficult for a third party to acquire us,
even if doing so would be beneficial to our stockholders.
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<PAGE> 19
OUR UNDESIGNATED PREFERRED STOCK MAY INHIBIT POTENTIAL ACQUISITION BIDS FOR US,
CAUSE THE MARKET PRICE FOR SAGENT COMMON STOCK TO FALL AND DIMINISH THE VOTING
RIGHTS OF THE HOLDERS OF OUR COMMON STOCK
If our board of directors issues preferred stock potential acquirers may
not make acquisition bids for us, our stock price may fall and the voting rights
of existing stockholders may diminish as a result. Sagent's board of directors
has the authority to issue up to 15,556,000 shares of preferred stock in one or
more series. The board of directors can fix the price, rights, preferences,
privileges and restrictions of the preferred stock without any further vote or
action by our stockholders. Sagent has no current plans to issue any shares of
preferred stock.
WE HAVE BROAD DISCRETION HOW WE INVEST AND MAY NOT YIELD A FAVORABLE RETURN
We intend to invest available funds for general corporate purposes,
including working capital, capital expenditures and repayment of long-term
indebtedness, and may use a portion to acquire other businesses, products or
technologies. Our management may invest in ways with which the stockholders may
not agree. Pending any such uses, we plan to continue to invest in investment-
grade, interest-bearing securities. We cannot predict that such investments will
yield a favorable return.
SHARES ELIGIBLE FOR FUTURE SALE COULD CAUSE OUR STOCK PRICE TO FALL
If our stockholders sell substantial amounts of our common stock in the
public, the market price of our common stock could fall. Such sales also might
make it more difficult for Sagent to sell equity or equity-related securities in
the future at a time and price that we deem appropriate. As of March 31, 2000 we
had 28.2 million shares of common stock outstanding.
WE DO NOT INTEND TO PAY DIVIDENDS AND YOU MAY NOT EXPERIENCE A RETURN ON
INVESTMENT WITHOUT SELLING SHARES
We have never declared or paid any cash dividends on our capital stock.
Therefore, you will not experience a return on your investment in our common
stock without selling your shares since we currently intend on retaining future
earnings to fund our growth and do not expect to pay dividends in the
foreseeable future. See "Dividend Policy."
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<PAGE> 20
SELLING STOCKHOLDERS
The selling stockholders hold unregistered shares of our common stock. The
selling stockholders may offer and sell the shares from time to time pursuant to
the terms of this prospectus, as further discussed under the caption, "Plan of
Distribution."
The following table sets forth information for each selling stockholder, as
of March 31, 2000 when there were 28,218,000 shares of our common stock
outstanding. The table assumes that the selling stockholders sell all of the
shares listed next to their names in the column entitled "Shares to be Offered."
Information in the table is based upon information supplied to us by the selling
stockholders. Except as otherwise indicated, we believe that the persons or
entities named in the following table have sole voting and investment power with
respect to all shares of the common stock shown as owned by them, subject to
community property laws where applicable. To prevent dilution to the selling
stockholders, the numbers in the table may change because of stock splits, stock
dividends or similar events involving our common stock. None of the selling
stockholders have held any positions or offices or have had material
relationships with us or any of our affiliates within the past three years other
than as a result of their ownership of our common stock.
<TABLE>
<CAPTION>
SHARES OWNED SHARES TO BE OWNED
BEFORE OFFERING AFTER OFFERING
--------------------- SHARES TO BE --------------------
NAME NUMBER PERCENTAGE+ OFFERED NUMBER PERCENTAGE
---- ------- ----------- ------------ ------ -----------
<S> <C> <C> <C> <C> <C>
Marcia Wray Little(7)................... 195,818 * 195,818 0 0
William Flanagan(7)..................... 12,954 * 12,954 0 0
Todd Hinton(7).......................... 31,324 * 31,324 0 0
Mark Samardich(7)....................... 31,298 * 31,298 0 0
Keith Tarter(7)......................... 31,298 * 31,298 0 0
Paul Wray(7)............................ 448,232 * 448,232 0 0
George Rebhan III(7).................... 448,232 * 448,232 0 0
J. Beach Clow(7)........................ 450,823 * 450,823 0 0
Lila M. Wray(7)......................... 69,955 * 69,955 0 0
Janice Rebhan(7)........................ 69,955 * 69,955 0 0
Bethann Clow(7)......................... 67,346 * 67,346 0 0
Charles Schwab & Company, Inc. FBO
George J. Rebhan II(7)................ 57,596 * 57,596 0 0
Charles Schwab & Company, Inc. FBO David
A. Rebhan(7).......................... 5,777 * 5,777 0 0
J. Beach Clow(7)........................ 11,529 * 11,529 0 0
Mr. John W. McFadden TTEE U/A DTD
12/23/97 by Mr. John W. McFadden(7)..... 11,529 * 11,529 0 0
Stephen Walden(7)....................... 11,529 * 11,529 0 0
Mr. John W. McFadden TTEE U/A DTD
12/23/97 by Mr. John W. McFadden(7)..... 102,083 * 102,083 0 0
Stephen Walden(7)....................... 17,281 * 17,281 0 0
Anne De Gennaro(1)...................... 124,147 * 124,147 0 0
Michael John Saich(1)................... 7,304 * 7,304 0 0
Malcolm Lewis-Jones(1).................. 7,304 * 7,304 0 0
Chairman Lewis Jones(1)................. 7,304 * 7,304 0 0
Michel Poirrier(2)...................... 10,617 * 10,617 0 0
Emmanual Quere(2)....................... 2,590 * 2,590 0 0
Marie Odile Cayeux(2)................... 1,899 * 1,899 0 0
Greater Bay Bank Corporation(3)......... 18,306 * 18,306 0 0
</TABLE>
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<PAGE> 21
<TABLE>
<CAPTION>
SHARES OWNED SHARES TO BE OWNED
BEFORE OFFERING AFTER OFFERING
--------------------- SHARES TO BE --------------------
NAME NUMBER PERCENTAGE+ OFFERED NUMBER PERCENTAGE
---- ------- ----------- ------------ ------ -----------
<S> <C> <C> <C> <C> <C>
The Corum Group(4)...................... 106,250 * 106,250 0 0
Nathaniel deLisle Burgess............... 18,750 * 18,750 0 0
William V. Flanagan(5).................. 90,682 * 90,682 0 0
Keith D. Tarter(5)...................... 7,772 * 7,772 0 0
Mark C. Samardich(5).................... 87,988 * 87,988 0 0
Charles C. Carey(5)..................... 15,353 * 15,353 0 0
Charles C. Carey(6)..................... 14,857 * 14,857 0 0
Nilton Bassi(8)......................... 13,952 * 13,952 0 0
</TABLE>
-------------------------
* Represents beneficial ownership of less than 1%.
+ Based on the number of shares outstanding on March 31, 2000, which was
28,218,000.
(1) Represents a total of 146,079 shares issued in connection with the
acquisition of Sagent U.K. Ltd., on June 11, 1999.
(2) Represents a total of 20,141 shares issued in connection with the
acquisition of Sagent France on November 30, 1999.
(3) Represents 18,306 shares convertible upon the exercise of underlying
warrants, issued to Greater Bay Bank Corporation on June 7, 1999.
(4) Represents 106,260 shares issued to Corum Group Ltd. on March 21, 2000.
(5) Represents an aggregate of 201,795 incentive stock options exercised by
employees.
(6) Represents 14,857 non-qualified stock options exercised by an employee.
(7) Represents an aggregate of 2,074,577 shares issued pursuant to the
acquisition of Qualitative Marketing Software, Inc. on December 11, 1999.
(8) Represents shares issued in connection with the acquisition of Sagent do
Brazil on March 30, 2000.
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of the shares. The shares
are being offered on behalf of the selling stockholders. The shares may be sold
or distributed from time to time by the selling stockholders, or by pledgees,
donees or transferees of, or other successors in interest to, the selling
stockholders, directly to one or more purchasers (including pledgees) or through
brokers, dealers or underwriters who may act solely as agents or may acquire
shares as principals, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices, or at fixed
prices, which may be changed.
The sale of the shares may be effected in one or more of the following
methods:
- ordinary brokers' transactions, which may include long or short sales;
- transactions involving cross or block trades or otherwise on the Nasdaq
National Market;
- purchases by brokers, dealers or underwriters as principal and resale by
such purchasers for their own accounts pursuant to this prospectus;
- "at the market" to or through market makers or into an existing market
for the shares;
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<PAGE> 22
- in other ways not involving market makers or established trading markets,
including direct sales to purchases or sales effected through agents;
- through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or
- any combination of the foregoing, or by any other legally available
means.
In addition, the selling stockholders or their successors in interest may
enter into hedging transactions with broker-dealers who may engage in short
sales of shares in the course of hedging the positions they assume with the
selling stockholders. The selling stockholders or their successors in interest
may also enter into option or other transactions with broker-dealers that
require the delivery by such broker-dealers of the shares, which shares may be
resold thereafter pursuant to this prospectus.
Brokers, dealers, underwriters or agents participating in the distribution
of the shares as agents may receive compensation in the form of commissions,
discounts or concessions from the selling stockholders and/or purchasers of the
shares for whom such broker-dealers may act as agent, or to whom they may sell
as principal, or both (which compensation as to a particular broker-dealer may
be less than or in excess of customary commissions). The selling stockholders
and any broker-dealers who act in connection with the sale of shares hereunder
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any commissions they receive and proceeds of any sale of shares may be deemed to
be underwriting discounts and commissions under the securities act. Neither we
nor any selling stockholder can presently estimate the amount of such
compensation. We know of no existing arrangements between any selling
stockholder, any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of the shares.
LEGAL MATTERS
The validity of the issuance of common stock will be passed upon for us by
Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1999 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2,609,634 SHARES
SAGENT TECHNOLOGY, INC.
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The Registrant will pay all reasonable expenses incident to the
registration of the shares other than any commissions and discounts of
underwriters, dealers or agents. Such expenses are set forth in the following
table. All of the amounts shown are estimates except the SEC registration fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
SEC registration fee........................................ $ 5,372.58
Legal fees and expenses..................................... $ 30,000
Accounting fees and expense................................. $ 5,000
Miscellaneous expenses...................................... $ 2,000
----------
Total............................................. $40,385.11
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sagent's certificate of incorporation limits the liability of directors to
the maximum extent permitted by Delaware law. Delaware law provides that
directors of a corporation shall not be personally liable for monetary damages
for breach of their fiduciary duties as directors, except for:
- Any breach of the director's duty of loyalty to Sagent or its
stockholders
- Acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law
- Unlawful payments of dividends or unlawful stock repurchases, redemptions
or other distributions
- Any transaction from which the director derived an improper personal
benefit
These provisions are permitted under Delaware law.
Sagent's bylaws provide that Sagent shall indemnify its directors and
executive officers and may indemnify its other officers and employees and agents
and other agents to the fullest extent permitted by law. Sagent believes that
indemnification under its bylaws covers at least negligence and gross negligence
on the part of indemnified parties. Sagent's bylaws also permit Sagent to secure
insurance on behalf of any officer, director, employee or other agent for any
liability arising out of his or her actions in such capacity, regardless of
whether the bylaws would permit indemnification.
Sagent has entered into agreements to indemnify its directors and officers,
in addition to indemnification provided for in Sagent's bylaws. These
agreements, among other things, indemnify Sagent's directors and officers for
certain expenses, including attorneys' fees, judgments, fines and settlement
amounts incurred by any such person in any action or proceeding, including any
action by or in the right of Sagent, arising out of such person's services as a
director or officer of Sagent, any subsidiary of Sagent or any other company or
enterprise to which the person provides services at the request of Sagent. In
addition, Sagent has obtained directors' and officers' insurance providing
indemnification for certain of Sagent's directors, officers and employees for
certain liabilities. Sagent believes that these provisions, agreements and
insurance are necessary to attract and retain qualified directors and officers.
II-1
<PAGE> 25
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of Sagent where indemnification will be
required or permitted. Sagent is not aware of any threatened litigation or
proceeding that might result in a claim for such indemnification.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
2.1* Form of Agreement and Plan of Reorganization, dated as of
December 11, 1999 (Incorporated by reference from the
Company's Amended Current Report on Form 8-K/A, which became
effective on February 28, 2000)
4.1* Sagent Technology, Inc. Amended and Restated Certificate of
Incorporation dated March 10, 1999 (incorporated by
reference to Exhibit 3.2 of Registrant's Form S-1 as filed
on January 29, 1999)
4.2* Sagent Technology, Inc. Bylaws (incorporated by reference to
Exhibit 3.3 of Registrant's Form S-1 as filed on January 29,
1999)
4.3* Form of Registrant's Stock Certificate (incorporated by
reference to Exhibit 4.1 of Registrant's Form S-1 as filed
on January 29, 1999)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-4)
</TABLE>
-------------------------
* Incorporated by reference.
ITEM 17. UNDERTAKINGS
Sagent Technology hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a) and (b) above do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by Sagent
Technology pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-2
<PAGE> 26
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
4. That, for the purpose of determining any liability under the
Securities Act, each filing of Sagent Technology's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act, (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
5. To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Exchange Act; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set forth
in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
6. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of Sagent Technology pursuant to the foregoing provisions, or
otherwise, Sagent Technology has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
Sagent Technology of expenses incurred or paid by a director, officer, or
controlling person of Sagent Technology 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,
Sagent Technology will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE> 27
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 Mountain View, state of California, on June 28, 2000.
SAGENT TECHNOLOGY, INC.
By: /s/ KENNETH C. GARDNER
------------------------------------
Kenneth C. Gardner
Chief Executive Officer,
President and Director
POWER OF ATTORNEY
We, the undersigned officers and directors of Sagent Technology, Inc.
hereby constitute Kenneth Gardner our true and lawful attorney-in-fact, with
full power of substitution, to sign for us and in our names in the capacities
indicated below the Registration Statement filed herewith and any and all
amendments to said Registration Statement, and generally to do all such things
in our name and behalf in our capacities as officers and directors to enable
Sagent Technology, Inc. to comply with the provisions of the Securities Act of
1933, as amended, and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed
by our said attorney to said Registration Statement and any and all amendments
thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ KENNETH C. GARDNER Chief Executive Officer, June 28, 2000
-------------------------------------------------------- President and Director
Kenneth C. Gardner (Principal Executive
Officer)
/s/ KEITH F. JENSEN Vice President, Finance June 28, 2000
-------------------------------------------------------- (Principal Financial and
Keith F. Jensen Accounting Officer)
/s/ JOHN E. ZICKER Director June 28, 2000
--------------------------------------------------------
John E. Zicker
/s/ SHANDA BAHLES Director June 28, 2000
--------------------------------------------------------
Shanda Bahles
</TABLE>
II-4
<PAGE> 28
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JEFFREY T. WEBBER Director June 28, 2000
--------------------------------------------------------
Jeffrey T. Webber
Director
--------------------------------------------------------
Klaus S. Luft
Director
--------------------------------------------------------
Keith A. Maib
</TABLE>
II-5
<PAGE> 29
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-4)
</TABLE>
