<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 9, 2000
REGISTRATION NO. 333-31230
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NET PERCEPTIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 7372 41-1844584
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
7901 FLYING CLOUD DRIVE
MINNEAPOLIS, MINNESOTA 55344
(612) 903-9424
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
STEVEN J. SNYDER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NET PERCEPTIONS, INC.
7901 FLYING CLOUD DRIVE
MINNEAPOLIS, MINNESOTA 55344
(612) 903-9424
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
KENT A. COIT, ESQ. JODIE M. BOURDET, ESQ.
SKADDEN, ARPS, SLATE, COOLEY GODWARD LLP
MEAGHER & FLOM LLP ONE MARITIME PLAZA
ONE BEACON STREET 20TH FLOOR
BOSTON, MASSACHUSETTS 02108-3194 SAN FRANCISCO, CALIFORNIA 94111
TELEPHONE: (617) 573-4800 TELEPHONE: (415) 693-2000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date hereof.
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 2 to the Registration Statement on Form S-1 of Net
Perceptions, Inc. contains alternate pages exclusively for use in the form of
international prospectus to be delivered in connection with the offering of our
common stock outside of the United States and Canada. Except for the ten
alternate pages filed with this Amendment No. 2, the international prospectus is
identical to the form of prospectus included as part of Amendment No. 1 to the
Registration Statement, as filed with the Securities and Exchange Commission on
March 7, 2000. Each of the alternate pages for the international prospectus
included in this Amendment No. 2 is labeled "Alternate Page for International
Prospectus."
<PAGE> 3
ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES, AND WE ARE NOT SOLICITING
OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS
NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 6, 2000
[NET PERCEPTIONS LOGO]
2,850,000 SHARES
COMMON STOCK
Net Perceptions is offering 2,000,000 shares of common stock and the
selling stockholders are selling an additional 850,000 shares. Net Perceptions'
common stock is currently quoted on the Nasdaq National Market under the symbol
"NETP." The last reported sale price of the common stock on the Nasdaq National
Market on March 3, 2000 was $54.19 per share.
-------------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 8.
-------------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -------
<S> <C> <C>
Public Offering Price....................................... $ $
Underwriting Discounts and Commissions...................... $ $
Proceeds to Net Perceptions................................. $ $
Proceeds to Selling Stockholders............................ $ $
</TABLE>
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We and the selling stockholders together have granted the underwriters a
30-day option to purchase up to an additional 427,500 shares of common stock to
cover over-allotments.
-------------------------
ROBERTSON STEPHENS INTERNATIONAL
CHASE H&Q
U.S. BANCORP PIPER JAFFRAY
DAIN RAUSCHER WESSELS
ADAMS, HARKNESS & HILL, INC.
THE DATE OF THIS PROSPECTUS IS , 2000.
<PAGE> 4
ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS
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. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO
BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR OF ANY SALE OF THE COMMON STOCK. IN THIS PROSPECTUS, UNLESS THE
CONTEXT OTHERWISE REQUIRES, "NET PERCEPTIONS," "WE," "US" AND "OUR" REFER TO NET
PERCEPTIONS, INC. AND OUR SUBSIDIARIES.
UNTIL , 2000 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
-------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 4
Risk Factors................................................ 8
Forward-Looking Statements.................................. 22
Use of Proceeds............................................. 23
Price Range of Common Stock................................. 23
Dividend Policy............................................. 23
Capitalization.............................................. 24
Dilution.................................................... 25
Selected Consolidated Financial Data........................ 26
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 27
Business.................................................... 37
Management.................................................. 52
Certain Transactions........................................ 61
Principal and Selling Stockholders.......................... 62
Description of Capital Stock................................ 64
Shares Eligible for Future Sale............................. 68
Material United States Federal Income Tax Consequences to
Non-U.S. Holders.......................................... 69
Underwriting................................................ 73
Legal Matters............................................... 75
Experts..................................................... 75
Where You Can Find Additional Information................... 76
Index to Financial Statements............................... F-1
</TABLE>
-------------------------
Industry data included in this prospectus has been obtained from third
parties and has not been independently verified by us.
We have the following registered trademarks in the United States: Net
Perceptions, the Net Perceptions logo and GroupLens. This prospectus also
includes common law trademarks, including common law trademarks that are the
subject of pending trademark applications, belonging to Net Perceptions and
trademarks of other companies that are the property of their respective owners.
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ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS
Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at any time during the three months preceding a sale and who has
beneficially owned shares proposed to be sold for at least two years is entitled
to sell such shares under Rule 144(k) without regard to the volume limitations,
manner of sale provisions, public information requirements or notice
requirements.
RULE 701
In general, under Rule 701 of the Securities Act, any of our employees,
consultants or advisors who purchased shares from us under a stock option plan
or other written agreement prior to our initial public offering can resell those
shares excluding the effect of the "lock-up" agreements described above, in
reliance on Rule 144, but without complying with some of the restrictions,
including the holding period, contained in Rule 144. Approximately 458,404
shares of our outstanding common stock are eligible for resale under resale
under Rule 701. Some of these shares are subject to the "lock-up" agreement with
FleetBoston Robertson Stephens Inc. described above.
REGISTRATION RIGHTS
Upon completion of this offering, the holders of approximately 1,319,677
shares of our common stock will be entitled to rights to registration of their
shares under the Securities Act. After registration, these shares will become
freely tradable without restrictions under the Securities Act. Any sales of
securities by these shareholders could decrease the trading price of our common
stock. A more detailed discussion of these registration rights is included in
this prospectus under the heading "Description of Capital Stock -- Registration
rights."
STOCK OPTIONS
We have filed registration statements on Form S-8 to register approximately
6,970,657 shares of common stock reserved for issuance under our stock option
plans and our Employee Stock Purchase Plan. Each year as the number of shares
reserved for issuance under our 1999 Equity Incentive Plan and 1999 Employee
Stock Purchase plan automatically increases, we intend to file amendments to the
registration statements covering the additional shares. As of December 31, 1999,
options to purchase 2,548,766 shares of common stock were issued and outstanding
under our stock option plans and 1,035,578 shares were reserved for issuance
pursuant to future grants of stock options. In addition, as of December 31,
1999, 957,616 shares were reserved for issuance under our 1999 Employee Stock
Purchase Plan. Shares registered under these registration statements will, upon
the optionee's exercise and subject to vesting and lock-up provisions and Rule
144 volume limitations applicable to our affiliates, be available for sale in
the open market. We also intend to file a registration statement on Form S-8 to
register approximately 268,914 shares of our common stock reserved for issuance
under KD One's 1996 Stock Option Plan, which we assumed in connection with our
acquisition of KD One.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
TO NON-U.S. HOLDERS
The following is a general discussion of the material U.S. federal income
tax consequences of the purchase, ownership and disposition of our common stock
to a non-U.S. Holder. For the purpose of this discussion, a non-U.S. Holder is
any holder that for U.S. federal income tax purposes is not a U.S. person.
For purposes of this discussion, the term U.S. person means:
- a citizen or resident of the U.S.;
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- a partnership and a corporation or other entity taxable as a corporation
created or organized in the U.S. or under the laws of the U.S. or any
political subdivision thereof;
- an estate whose income is included in gross income for U.S. federal
income tax purposes regardless of its source; or
- a trust, if its administration is subject to the primary supervision of a
U.S. court and one or more U.S. persons have the authority to control all
substantial decisions of the trust or the trust has a valid election in
effect under applicable Treasury Regulations to be treated as a U.S.
person.
Additionally, this discussion does not address U.S. federal income tax
consequences to non-U.S. Holders subject to special treatment under U.S. federal
income tax law, such as:
- U.S. expatriates;
- financial institutions;
- dealers in securities;
- insurance companies;
- tax-exempt entities;
- holders who acquire our common stock pursuant to the exercise of an
employee stock option or right or otherwise as compensation;
- holders who hold our common stock as qualified small business stock for
purposes of Section 1202 of the Internal Revenue Code of 1986, as
amended;
- holders who do not hold our common stock as a capital asset (generally,
an asset held for investment purposes); or
- holders who hold our common stock as part of a hedge, straddle,
conversion or other risk reduction transaction.
Nor does this discussion address any tax consequences arising under the
laws of any state, local or non-U.S. taxing jurisdiction.
Furthermore, the following discussion is based on current provisions of the
Internal Revenue Code, the Treasury Regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as in effect on the
date hereof, and all of which are subject to change, possibly with retroactive
effect. We have not requested a ruling from the Internal Revenue Service ("IRS")
or an opinion of counsel with respect to the U.S. federal income tax
consequences of the purchase, ownership and disposition of our common stock to a
non-U.S. Holder under the Internal Revenue Code.
ACCORDINGLY, EACH NON-U.S. HOLDER SHOULD CONSULT A TAX ADVISOR REGARDING
THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES OF
ACQUIRING, HOLDING AND DISPOSING OF SHARES OF OUR COMMON STOCK.
DIVIDENDS
We have never paid dividends on our common stock and do not expect to pay
any cash dividends on our common stock for the foreseeable future. In the event,
however, that we do pay dividends on our common stock, any dividend paid to a
non-U.S. Holder of common stock generally will be subject to U.S. withholding
tax either at a rate of 30% of the gross amount of the dividend or such lower
rate as may be specified by an applicable tax treaty. Dividends received by a
non-U.S.
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Holder that are effectively connected with a U.S. trade or business conducted by
the non-U.S. Holder are exempt from such withholding tax. However, those
effectively connected dividends, net of certain deductions and credits, are
taxed at the same graduated rates applicable to U.S. persons. In addition to the
graduated tax described above, dividends received by a corporate non-U.S. Holder
that are effectively connected with a U.S. trade or business of the corporate
non-U.S. Holder may also be subject to a branch profits tax at a rate of 30% or
such lower rate as may be specified by an applicable tax treaty.
A non-U.S. holder may be required to satisfy certain certification
requirements in order to claim treaty benefits or otherwise claim a reduction
of, or exemption from, the withholding described above.
GAIN ON DISPOSITION OF COMMON STOCK
A non-U.S. Holder generally will not be subject to U.S. federal income tax
on any gain realized upon the sale or other disposition of our common stock
unless:
- the gain is effectively connected with a U.S. trade or business of the
non-U.S. Holder (which gain, in the case of a corporate non-U.S. Holder,
must also be taken into account for branch profits tax purposes);
- the non-U.S. Holder is an individual who holds his or her common stock as
a capital asset and who is present in the U.S. for a period or periods
aggregating 183 days or more during the calendar year in which the sale
or disposition occurs and certain other conditions are met; or
- we are or have been a "United States real property holding corporation"
for U.S. federal income tax purposes at any time within the shorter of
the five-year period preceding the disposition or the holder's holding
period for our common stock.
We have determined that we are not and do not believe that we will become a
"United States real property holding corporation" for U.S. federal income tax
purposes.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Generally, we must report annually to the IRS the amount of dividends paid,
the name and address of the recipient, and the amount, if any, of tax withheld.
A similar report is sent to the holder. Pursuant to tax treaties or other
agreements, the IRS may make its reports available to tax authorities in the
recipient's country of residence.
Dividends paid to a non-U.S. Holder at an address within the U.S. may be
subject to backup withholding at a rate of 31% if the non-U.S. Holder fails to
establish that it is entitled to an exemption or to provide a correct taxpayer
identification number and other information to the payer. Backup withholding
generally will not apply to dividends paid to non-U.S. Holders at an address
outside the U.S. on or prior to December 31, 2000 unless the payer has knowledge
that the payee is a U.S. person. Under recently finalized Treasury Regulations
regarding withholding and information reporting, payment of dividends to
non-U.S. Holders at an address outside the U.S. after December 31, 2000 may be
subject to backup withholding at a rate of 31% unless such non-U.S. Holder
satisfies various certification requirements.
Under current Treasury Regulations, the payment of the proceeds of the
disposition of common stock to or through the U.S. office of a broker is subject
to information reporting and backup withholding at a rate of 31% unless the
holder certifies its non-U.S. status under penalties of perjury
or otherwise establishes an exemption. Generally, the payment of the proceeds of
the disposition by a non-U.S. Holder of common stock outside the U.S. to or
through a foreign office of a broker will not
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be subject to backup withholding but will be subject to information reporting
requirements if the broker is:
- a U.S. person;
- a "controlled foreign corporation" for U.S. federal income tax purposes;
or
- a foreign person 50% or more of whose gross income for certain periods is
from the conduct of a U.S. trade or business unless the broker has
documentary evidence in its files of the holder's non-U.S. status and
certain other conditions are met, or the holder otherwise establishes an
exemption. Neither backup withholding nor information reporting generally
will apply to a payment of the proceeds of a disposition of common stock
by or through a foreign office of a foreign broker not subject to the
preceding sentence.
In general, the recently promulgated final Treasury Regulations, described
above, do not significantly alter the substantive withholding and information
reporting requirements but would alter the procedures for claiming benefits of
an income tax treaty and change the certifications procedures relating to the
receipt by intermediaries of payments on behalf of the beneficial owner of
shares of common stock. Non-U.S. Holders should consult their tax advisors
regarding the effect, if any, of those final Treasury Regulations on an
investment in our common stock. Those final Treasury Regulations generally are
effective for payments made after December 31, 2000.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided that the required information is furnished to the IRS.
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UNDERWRITING
The underwriters named below, acting through their representatives,
FleetBoston Robertson Stephens Inc., Chase Securities Inc., U.S. Bancorp Piper
Jaffray Inc., Dain Rauscher Incorporated and Adams, Harkness & Hill, Inc. have
severally agreed with us and the selling stockholders, subject to the terms and
conditions of the underwriting agreement, to purchase from us and the selling
stockholders the number of shares of common stock set forth below opposite their
respective names. The underwriters are committed to purchase and pay for all
shares if any are purchased.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- ----------- ----------
<S> <C>
FleetBoston Robertson Stephens Inc..........................
Chase Securities Inc........................................
U.S. Bancorp Piper Jaffray Inc..............................
Dain Rauscher Incorporated..................................
Adams, Harkness & Hill, Inc.................................
INTERNATIONAL UNDERWRITER
- -------------------------
FleetBoston Robertson Stephens International Limited........
Chase Securities Inc........................................
U.S. Bancorp Piper Jaffray Inc..............................
Dain Rauscher Incorporated..................................
Adams, Harkness & Hill, Inc.................................
----------
Total.....................................................
==========
</TABLE>
The representatives have advised us and the selling stockholders that the
underwriters propose to offer the shares of common stock to the public at the
public offering price set forth on the cover page of this prospectus and to
certain dealers at that price less a concession of not in excess of $ per
share, of which $ may be reallowed to other dealers. After this offering,
the public offering price, concession and reallowance to dealers may be reduced
by the representatives. No such reduction shall change the amount of proceeds to
be received by us or the selling stockholders as set forth on the cover page of
this prospectus. The common stock is offered by the underwriters as stated
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part.
The underwriters have advised us that they do not expect sales to
discretionary accounts to exceed 5% of the total number of shares offered.
Over-allotment option
We have granted to the underwriters an option, exercisable during the
30-day period after the date of this prospectus, to purchase up to 300,000
additional shares of common stock and the selling stockholders have granted the
underwriters an option to purchase 127,500 additional shares of common stock at
the same price per share as we and the selling stockholders will receive for the
2,850,000 shares that the underwriters have agreed to purchase. To the extent
that the underwriters exercise their over-allotment option, the underwriters
have severally agreed, subject to certain conditions, to purchase approximately
the same percentage thereof as the number of shares to be purchased by each of
them bears to the total number of shares of common stock offered in this
offering. If purchased, these additional shares will be sold by the underwriters
on the same terms as those on which the shares offered hereby are being sold. We
and the selling stockholders will be obligated, pursuant to the over-allotment
option, to sell shares to the underwriters to the extent the over-allotment
option is exercised. The underwriters may exercise the over-allotment option
only to cover over-allotments made in connection with the sale of the shares of
common stock offered in this offering.
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The following table summarizes the total compensation to be paid to the
underwriters by us and the selling stockholders who have granted us this option:
<TABLE>
<CAPTION>
WITHOUT WITH
PER OVER- OVER-
SHARE ALLOTMENT ALLOTMENT
----- --------- ---------
<S> <C> <C> <C>
Underwriting discounts and commissions payable by us...... $ $ $
Underwriting discounts and commissions payable by the
selling stockholders.................................... $ $ $
</TABLE>
We estimate expenses payable by us in connection with this offering, other
than the underwriting discounts and commissions referred to above, will be
approximately $900,000.
Indemnity
The underwriting agreement contains covenants of indemnity among the
underwriters, us and the selling stockholders against various civil liabilities,
including liabilities under the Securities Act and liabilities arising from
breaches of representations and warranties contained in the underwriting
agreement.
Lock-up agreements
Each executive officer and director and certain other holders of our common
stock have agreed, during the period of 90 days after the effective date of this
prospectus, subject to specified exceptions, not to offer to sell, contract to
sell, or otherwise sell, dispose of, loan, pledge or grant any rights with
respect to any shares of common stock or any options or warrants to purchase any
shares of common stock, or any securities convertible into or exchangeable for
shares of common stock owned as of the date of this prospectus or thereafter
acquired directly by these holders or with respect to which they have the power
of disposition, without the prior written consent of FleetBoston Robertson
Stephens Inc. However, FleetBoston Robertson Stephens Inc. may, in its sole
discretion, at any time or from time to time, without notice, release all or any
portion of securities subject to the lock-up agreements. There are no existing
agreements between the representatives and any of our stockholders who have
executed a lock-up agreement providing consent to the sale of shares prior to
the expiration of the lock-up period.
In addition, we have agreed that during the lock-up period we will not,
without the prior written consent of FleetBoston Robertson Stephens Inc.,
subject to various exceptions, consent to the disposition of any shares held by
stockholders subject to lock-up agreements prior to the expiration of the
lock-up period, or issue, sell, contract to sell, or otherwise dispose of, any
shares of common stock, any options to purchase any shares of common stock or
any securities convertible into, exercisable for or exchangeable for shares of
common stock other than our sale of shares in this offering, the issuance of our
common stock upon the exercise of outstanding options and the issuance of
options under existing stock option and incentive plans provided that those
options do not vest prior to the expiration of the lock-up period. See "Shares
Eligible for Future Sale."
Listing
The common stock is currently quoted on the Nasdaq National Market under
the trading symbol "NETP."
Stabilization
The representatives have advised us that, pursuant to Regulation M under
the Securities Act of 1933, some persons participating in this offering may
engage in transactions, including stabilizing bids,
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syndicate covering transactions or the imposition of penalty bids, that may have
the effect of stabilizing or maintaining the market price of the shares of
common stock at a level above that which might otherwise prevail in the open
market. A "stabilizing bid" is a bid for or the purchase of shares of common
stock on behalf of the underwriters for the purpose of fixing or maintaining the
price of the common stock. A "syndicate covering transaction" is the bid for or
purchase of common stock on behalf of the underwriters to reduce a short
position incurred by the underwriters in connection with the offering. A
"penalty bid" is an arrangement permitting the representatives to reclaim the
selling concession otherwise accruing to an underwriter or syndicate member in
connection with the offering if the common stock originally sold by such
underwriter or syndicate member is purchased by the representatives in a
syndicate covering transaction and has therefore not been effectively placed by
such underwriter or syndicate member. The representatives have advised us that
such transactions may be effected on the Nasdaq National Market or otherwise
and, if commenced, may be discontinued at any time.
Other compensation
In connection with the KD One acquisition, FleetBoston Robertson Stephens
Inc. was paid a commission of $1.2 million in cash for advisory services
provided to us.
LEGAL MATTERS
The validity of the issuance of the shares of common stock we are offering
will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, Boston,
Massachusetts. Legal matters in connection with this offering will be passed
upon for the underwriters by Cooley Godward LLP, San Francisco, California.
EXPERTS
The financial statements of Net Perceptions, Inc. and Knowledge Discovery
One, Inc. as of December 31, 1998 and 1999 and for each of the three years in
the period ended December 31, 1999 included in this prospectus have been so
included in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission, Washington, D.C.
20549, a registration statement on Form S-1 under the Securities Act of 1933
with respect to the common stock we propose to sell in this offering. This
prospectus, which constitutes a part of the registration statement, does not
contain all of the information set forth in the registration statement and the
exhibits and schedules to the registration statement. For further information
about us and the common stock we propose to sell in this offering, we refer you
to the registration statement and the exhibits and schedules filed as a part of
the registration statement. Statements contained in this prospectus concerning
the contents of any contract or any other document filed as an exhibit to the
registration statement are not necessarily complete. If a contract or document
has been filed as an exhibit to the registration statement, we refer you to the
copy of the contract or document that has been filed.
The registration statement, including exhibits and schedules thereto, may
be inspected without charge at the principal office of the Securities and
Exchange Commission in Washington, D.C., and copies of all or any part of the
registration statement may be inspected and copied at the public reference
facilities maintained by the Securities and Exchange Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of this material can also be obtained at
prescribed rates by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain more information
about the Public Reference Room by calling the Securities and Exchange
Commission at 1-800-SEC-0330. In addition, the Securities and Exchange
Commission maintains a website (http://www.sec.gov) that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.
We are subject to the information and periodic reporting requirements of
the Securities Exchange Act of 1934, and, in accordance with the requirements of
the Securities Exchange Act of 1934, file periodic reports, proxy statements and
other information with the Securities and Exchange Commission. These periodic
reports, proxy statements and other information will be available for inspection
and copying at the regional offices, public reference facilities and website of
the Securities and Exchange Commission referred to above.
76
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses, other than underwriting discounts and commissions, expected
to be incurred by us in connection with the sale of common stock being
registered are estimated to be as follows:
<TABLE>
<S> <C>
SEC Registration fee........................................ $ 42,000
NASD fee.................................................... 17,000
Printing and engraving...................................... 150,000
Legal fees and expenses..................................... 300,000
Accounting fees and expenses................................ 150,000
Transfer agents' fees....................................... 7,750
Miscellaneous............................................... 233,250
--------
Total............................................. $900,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation law authorizes a court to
award or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933
(the "Act"). Article VII of our Amended and Restated Bylaws provides for
mandatory indemnification of our directors and officers and permissible
indemnification of employees and other agents to the maximum extent permitted by
the Delaware General Corporation Law. Our Amended and Restated Certificate of
Incorporation provides that, pursuant to Delaware law, a director shall not be
liable for monetary damages for breach of the directors' fiduciary duty as
directors to us and our stockholders. This provision in our Amended and Restated
Certificate of Incorporation does not eliminate the directors' fiduciary duty,
and in appropriate circumstances equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to us for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of laws, for actions
leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
We have entered into Indemnification Agreements with our officers and
directors, a form of which is attached as Exhibit 10.1 hereto and incorporated
herein by reference. The Indemnification Agreements provide our officers and
directors with further indemnification to the maximum extent permitted by the
Delaware General Corporation Law. We also maintain liability insurance for our
directors and officers. Reference is also made to the form of underwriting
agreement filed as Exhibit 1.1 hereto, indemnifying our officers and directors
against certain liabilities, and Section 1.10 of the Amended and Restated
Investor Rights Agreement contained in Exhibit 4.1 hereto and Section 1.10 of
the Registration Rights Agreement contained in Exhibit 4.2 hereto, each
indemnifying certain of our stockholders, including controlling stockholders,
against certain liabilities.
II-1
<PAGE> 14
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
(a) In the three years preceding the filing of this registration statement,
we issued and sold the following securities that were not registered under the
Securities Act:
1. We issued and sold 950,150 shares (assuming no exercise of stock
options after December 31, 1999) of our common stock to our employees,
consultants and directors pursuant to exercises of options under our stock
plans for an aggregate consideration of $253,890.
2. We granted options to purchase 3,941,550 shares of common stock, at
a weighted average exercise price of $5.51 per share, to our employees and
consultants under our stock plans, of which 950,150 shares have been
exercised as of December 31, 1999.
3. On October 28, 1997, we issued and sold warrants to purchase
approximately 11,982 shares of Series C preferred stock to Silicon Valley
Bank.
4. On August 17, 1999, we issued 10,565 shares of our common stock to
Silicon Valley Bank pursuant to the net exercise of the warrant described
in 15(a)(3).
5. Between December 18, 1997 and February 20, 1998, we issued and sold
4,635,834 shares of Series C preferred stock for an aggregate purchase
price of $7,116,005.19 to a group of 11 investors.
6. On February 4, 1999, we issued and sold a convertible promissory
note with a principal balance of $4,000,000.00 to Trans Cosmos, Inc.
7. On April 28, 1999, we issued 290,911 shares of our common stock to
Trans Cosmos, Inc. pursuant to the conversion of the promissory note
described in 15(a)(7).
8. On February 14, 2000 we issued and sold 1,969,013 shares of common
stock in connection with our acquisition of Knowledge Discovery One, Inc.
The issuances described in 15(a)(1) and 15(a)(2) were deemed exempt from
registration under the Act in reliance upon Rule 701 promulgated under the Act.
The issuances of the securities described in Items 15(a)(3) through 15(a)(5) and
15(a)(7) and 15(a)(8) were deemed to be exempt from registration under the Act
in reliance on Section 4(2) of the Act as transactions by an issuer not
involving any public offering. The issuance described in Item 15(a)(6) was
deemed exempt from registration under the Act in reliance on Regulation S. In
addition, the recipients of securities in each such transaction represented
their intentions to acquire the securities for investment only and not with a
view to or for sale in connection with any distribution thereof and appropriate
legends were affixed to the share certificates and warrants issued in such
transactions. All recipients had adequate access, through their relationships
with us, to information about us.
II-2
<PAGE> 15
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1* Form of Underwriting Agreement.
2.1*** Agreement and Plan of Merger, dated as of January 15, 2000,
as amended February 3, 2000, by and among Net Perceptions,
Inc., Kentucky Acquisition Corporation and Knowledge
Discovery One, Inc.
3.1** Amended and Restated Certificate of Incorporation.
3.2** Amended and Restated Bylaws.
4.1** Amended and Restated Investor Rights Agreement, dated
December 18, 1997, among Net Perceptions, Inc. and the
investors and founders named therein, as amended.
4.2*** Registration Rights Agreement, dated February 14, 2000, by
and among Net Perceptions, Inc. and the stockholders named
therein.
4.3** Specimen common stock certificate.
5.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
10.1** Form of Indemnification Agreement entered into between Net
Perceptions, Inc. and its directors and officers.
10.2** 1996 Stock Plan.
10.3** 1999 Equity Incentive Plan.
10.4** 1999 Non-Employee Director Option Plan.
10.5** Employee Stock Purchase Plan.
10.6**+ License Agreement between Net Perceptions, Inc. and Regents
of the University of Minnesota, dated July 31, 1996.
10.7**+ Amendment to License Agreement between Net Perceptions, Inc.
and Regents of the University of Minnesota, dated October
13, 1997.
10.8*** Knowledge Discovery One, Inc. 1996 Stock Option/Stock
Issuance Plan.
10.9**+ Orbix Development and Runtime License Agreement between IONA
Technologies PLC and Net Perceptions, Inc., dated July 9,
1998.
10.10**+ Agreement Amendment to Orbix Development and Runtime License
Agreement between IONA Technologies PLC and Net Perceptions,
Inc., dated October 12, 1998.
10.11** Lease between the Protective Group and Net Perceptions,
Inc., dated November 12, 1998.
10.12** Form of Master Purchase Agreement.
10.13** Change in Control Severance Plan and Summary Plan
Description.
10.15** Note Purchase Agreement between Net Perceptions, Inc. and
Trans Cosmos, Inc., dated February 4, 1999.
21*** List of Subsidiaries.
23.1*** Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2*** Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.3* Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
24.1*** Power of Attorney
27*** Financial Data Schedule.
</TABLE>
- -------------------------
* To be filed by amendment.
** Incorporated by reference to Net Perceptions' Registration Statement on Form
S-1 (Registration No. 333-71919).
*** Previously filed.
+ Confidential treatment has been granted for certain portions of this Exhibit
pursuant to Rule 406 under the Securities Act. Confidential portions have
been omitted and filed separately with the Securities and Exchange
Commission.
II-3
<PAGE> 16
(b) FINANCIAL STATEMENT SCHEDULES
No financial statement schedules are required. The information required to
be set forth therein is not applicable or is shown in the financial statements
or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement, certificates in the
denominations and registered in the names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the Delaware General Corporation Law, the Amended and Restated
Certificate of Incorporation or the Bylaws of the registrant, Indemnification
Agreements entered into between the registrant and its officers and directors,
the Underwriting Agreement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered hereunder,
the registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus 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-4
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 2 to the Registration Statement to
be signed on its behalf by the undersigned, hereunto duly authorized, in the
City of Minneapolis, State of Minnesota, on this 9th day of March, 2000.
NET PERCEPTIONS, INC.
By: /s/ STEVEN J. SNYDER
------------------------------------
Steven J. Snyder
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
<TABLE>
<C> <S> <C>
/s/ STEVEN J. SNYDER President, Chief Executive Officer and March 9, 2000
- ------------------------------------------ Director (Principal Executive Officer)
Steven J. Snyder
* Chief Financial Officer and Secretary March 9, 2000
- ------------------------------------------ (Principal Financial and Accounting
Thomas M. Donnelly Officer)
* Director March 9, 2000
- ------------------------------------------
John T. Riedl
* Director March 9, 2000
- ------------------------------------------
Ann L. Winblad
* Director March 9, 2000
- ------------------------------------------
Douglas J. Burgum
* Director March 9, 2000
- ------------------------------------------
William Lansing
*By: /s/ STEVEN J. SNYDER March 9, 2000
- ------------------------------------------
Steven J. Snyder
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -------
<S> <C> <C>
1.1* Form of Underwriting Agreement.
2.1*** Agreement and Plan of Merger, dated as of January 15, 2000,
as amended February 3, 2000, by and among Net Perceptions,
Inc., Kentucky Acquisition Corporation and Knowledge
Discovery One, Inc.
3.1** Amended and Restated Certificate of Incorporation.
3.2** Amended and Restated Bylaws.
4.1** Amended and Restated Investor Rights Agreement, dated
December 18, 1997, among Net Perceptions, Inc. and the
investors and founders named therein, as amended.
4.2*** Registration Rights Agreement dated February 14, 2000, by
and among Net Perceptions, Inc. and the stockholders named
therein.
4.3** Specimen common stock certificate.
5.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
10.1** Form of Indemnification Agreement entered into between Net
Perceptions, Inc. and its directors and officers.
10.2** 1996 Stock Plan.
10.3** 1999 Equity Incentive Plan.
10.4** 1999 Non-Employee Director Option Plan.
10.5** Employee Stock Purchase Plan.
10.6**+ License Agreement between Net Perceptions, Inc. and Regents
of the University of Minnesota, dated July 31, 1996.
10.7**+ Amendment to License Agreement between Net Perceptions, Inc.
and Regents of the University of Minnesota, dated October
13, 1997.
10.8*** Knowledge Discovery One, Inc. 1996 Stock Option/Stock
Issuance Plan.
10.9**+ Orbix Development and Runtime License Agreement between IONA
Technologies PLC and Net Perceptions, Inc., dated July 9,
1998.
10.10**+ Agreement Amendment to Orbix Development and Runtime License
Agreement between IONA Technologies PLC and Net Perceptions,
Inc., dated October 12, 1998.
10.11** Lease between the Protective Group and Net Perceptions,
Inc., dated November 12, 1998.
10.12** Form of Master Purchase Agreement.
10.13** Change in Control Severance Plan and Summary Plan
Description.
10.15** Note Purchase Agreement between Net Perceptions, Inc. and
Trans Cosmos, Inc., dated February 4, 1999.
21*** List of Subsidiaries.
23.1*** Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2*** Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.3* Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
24.1*** Power of Attorney.
27*** Financial Data Schedule.
</TABLE>
- -------------------------
* To be filed by amendment.
** Incorporated by reference to Net Perceptions' Registration Statement on Form
S-1 (Registration No. 333-71919).
*** Previously filed.
+ Confidential treatment has been granted for certain portions of this Exhibit
pursuant to Rule 406 under the Securities Act. Confidential portions have
been omitted and filed separately with the Securities and Exchange
Commission.
