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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 22, 2000
REGISTRATION NO. 333-49292
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ACCRUE SOFTWARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-3238684
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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48634 MILMONT DRIVE
FREMONT, CALIFORNIA 94538-7353
(510) 580-4500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
COMPANY'S PRINCIPAL EXECUTIVE OFFICES)
RICHARD D. KREYSAR
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ACCRUE SOFTWARE, INC.
48634 MILMONT DRIVE
FREMONT, CALIFORNIA 94538-7353
(510) 580-4500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
JOHN V. BAUTISTA
FRANCES JOHNSTON
PETER D. HADROVIC
VENTURE LAW GROUP
A PROFESSIONAL CORPORATION
2775 SAND HILL ROAD
MENLO PARK, CA 94025
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box. [
]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an Offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same Offering. [ ] ________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same Offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
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Common Stock, par value
$0.001........................ 1,088,309 $4.75 $5,169,468 $1,365.00(2)
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(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933 based upon the
average of the high and low prices of the Common Stock as reported on the
Nasdaq National Market on November 1, 2000.
(2)Previously paid with the initial filing of this Registration Statement.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL 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
SUBJECT TO COMPLETION, DATED NOVEMBER 22, 2000
PROSPECTUS
ACCRUE SOFTWARE, INC.
1,088,309 SHARES COMMON STOCK
THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 2 IN
DETERMINING WHETHER TO PURCHASE THE COMMON STOCK.
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All references herein to "Accrue," "we," "our," "us," the "Company" and the
"Registrant" refer to Accrue Software, Inc. unless otherwise indicated by the
context.
The 1,088,309 shares of the Company's common stock, $0.001 par value,
covered by this Prospectus (the "Shares") are offered for the account of certain
stockholders of the Company listed under "Selling Stockholders" below (the
"Selling Stockholders"). 1,046,732 of the Shares were issued to the Selling
Stockholders in connection with an Agreement and Plan of Merger and
Reorganization dated as of September 14, 1999 among Accrue, Marketwave
Acquisition Corp., and Marketwave Corporation, pursuant to which Marketwave
Corporation became our wholly-owned subsidiary. 41,577 of the shares were issued
upon exercise by the Selling Stockholders of outstanding Marketwave options that
were assumed by Accrue in connection with our acquisition of Marketwave. We have
agreed to maintain the effectiveness of this registration statement until
January 27, 2001. No sales may be made pursuant to this prospectus after that
time unless we amend or supplement this prospectus to indicate that we have
agreed to extend the period of its effectiveness. The Selling Stockholders may
sell the shares from time to time on the over-the-counter market in regular
brokerage transactions, in transactions directly with market makers or in
certain privately negotiated transactions. Each Selling Stockholder has advised
us that no sale or distribution other than as disclosed in this prospectus will
be effected until after this prospectus has been appropriately amended or
supplemented, if required, to set forth those terms. We will not receive any
proceeds from the sale of the shares by the Selling Stockholders.
Each of the Selling Stockholders may be deemed to be an "underwriter," as
such term is defined in the Securities Act of 1933, as amended.
On November 1, 2000, the last sale price of our common stock on the Nasdaq
National Market was $4.66 per share. Our common stock is listed on the Nasdaq
National Market under the symbol "ACRU."
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) SELLING STOCKHOLDERS(1)
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Per Share...................... See Text Above See Text Above See Text Above
Total..........................
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(1) All expenses of registration of the Shares shall be borne by the Company.
Selling commissions, brokerage fees, any applicable stock transfer taxes and
any fees and disbursements of counsel to the Selling Stockholders are
payable by the Selling Shareholders.
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. NEITHER WE
NOR THE SELLING STOCKHOLDER MAY SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED ON THE
ADEQUACY OF ACCURACY OF THE DISCLOSURES IN THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 22, 2000
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES
IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SHARES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
This prospectus contains forward-looking statements. The outcome of the
events described in these forward-looking statements is subject to risks and
actual results could differ materially. See "Risk Factors."
THE COMPANY
Accrue is a leading provider of Internet data collection and analysis
software which enables business decision makers to address critical marketing
and merchandising questions concerning the effectiveness of their Web sites. Its
products, Accrue Insight, Hit List and Decision Series are comprehensive
solutions aimed at helping Internet businesses increase numbers of visitors,
customer loyalty and sales by collecting, storing, analyzing and reporting Web
site activity data at a level of detail and accuracy that distinguishes the
Company's technology from others. Accrue products are highly scalable, meaning
they are detailed and robust enough to meet the needs of successful and rapidly
expanding Web sites as their user volumes greatly expand.
Merchandising managers traditionally depend on analysis of marketing
metrics like campaign effectiveness, shopping patterns or price elasticity, and
the quantity of that data has increased dramatically as the information age has
extended the number of methods and reach for marketing communications.
Conducting traditional marketing analysis has therefore become more complicated.
In addition, the Internet has now emerged as the fastest growing communication
and commerce medium in history, creating new challenges that further compound
the complexity of collecting and analyzing valuable merchandising information.
As a result, businesses are demanding analysis that provides a measure of return
on investment for their Internet initiatives. Accrue attempts to meet this need
by creating a detailed, flexible, robust and easy-to-use approach to Internet
merchandising analysis.
The Company has licensed its products to customers representing a broad
spectrum of enterprises within diverse industries, including publishing,
entertainment and media, high technology, financial services and retail.
Accrue currently markets and sells its products primarily through its
direct sales force in North America and has recently expanded into international
markets through informal alliances with third parties such as Sumisho
Electronics Company, Ltd., a subsidiary of Sumitomo Corporation, and Itochu
Techno-Science Corporation in Japan and Scientific Computers GmbH in Europe.
The Company's objective is to extend its position as a leading provider of
enterprise-class e-business analysis software. To achieve this objective,
Accrue's strategy includes the following key elements: extend leadership in
high-end e-business analysis, maintain technological leadership in e-business
analysis software, leverage Web data platform, leverage and expand blue chip
customer base, continue developing strategic alliances, expand sales and
distribution channels, and pursue strategic acquisitions.
The Company was incorporated in Delaware under the name "Plumb, Inc." in
February 1996 and changed its name to "Gauge Technologies, Inc." in April 1996.
In October 1996 the Company changed its name from "Gauge Technologies, Inc." to
"Accrue Software, Inc." Accrue's principal executive offices are located at
48634 Milmont Drive, Fremont, California 94538-7353. The Company's telephone
number at that location is (510) 580-4500. The address of the Company's Web site
is http://www.accrue.com. Information contained in Accrue's Web site does not
constitute part of this prospectus.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in shares of our common stock. If
any of the following risks actually occur, our business, financial condition or
operating results could be materially adversely affected. This could cause the
trading price of our common stock to decline, and you may lose part or all of
your investment.
This prospectus also contains certain forward-looking statements that
involve risks and uncertainties. These statements refer to our future plans,
objectives, expectations and intentions. These statements may be identified by
the use of words such as "expects," "anticipates," "intends," "plans" and
similar expressions. Our actual results could differ materially from those
discussed in these statements. Factors that could contribute to these
differences include those discussed below and elsewhere in this prospectus.
WE HAVE A LIMITED OPERATING HISTORY, MAKING IT DIFFICULT FOR YOU TO EVALUATE OUR
BUSINESS AND YOUR INVESTMENT
Accrue was formed in February 1996, and we introduced Accrue Insight 1.0,
our first software product, in January 1997. For the fiscal years ended March
31, 1998, 1999 and 2000, we generated $2.1 million, $4.7 million and $18.9
million in revenue, respectively. For the six months ended September 30, 2000,
we generated $19.8 million in revenue. Thus, we have a limited operating history
upon which you can evaluate our business and prospects. Due to our limited
operating history, it is difficult or impossible for us to predict future
results of operations. For example, we cannot forecast operating expenses based
on our historical results because they are limited, and we are required to
forecast expenses in part on future revenue projections. Most of our expenses
are fixed in the short term and we may not be able to quickly reduce spending if
our revenue is lower than we had projected, therefore net losses in a given
quarter would be greater than expected. In addition, our ability to forecast
accurately our quarterly revenue is limited due to a number of factors described
in detail below, making it difficult to predict the quarter in which sales will
occur. Moreover, due to our limited operating history, any evaluation of our
business and prospects must be made in light of the risks and uncertainties
often encountered by early-stage companies in Internet-related products and
services markets, which is new and rapidly evolving. Many of these risks are
discussed under the sub-headings below. We may not be able to successfully
address any or all of these risks and our business strategy may not be
successful.
WE INCURRED NET LOSSES OF $4.2 MILLION, $7.6 MILLION, $21.1 MILLION AND $29.8
MILLION FOR EACH OF THE RESPECTIVE FISCAL YEARS ENDED MARCH 31, 1998, 1999 AND
2000 AND THE SIX MONTHS ENDED SEPTEMBER 30, 2000
We have not achieved profitability. We incurred net losses of $4.2 million
for the fiscal year ended March 31, 1998, $7.6 million for the fiscal year ended
March 31, 1999, $21.1 million for the fiscal year ended March 31, 2000 and $29.8
million for the six months ended September 30, 2000. As of September 30, 2000,
we had an accumulated deficit of $64.6 million. If we do achieve profitability,
we cannot be certain that we can sustain or increase profitability on a
quarterly or annual basis in the future, or at all.
WE EXPECT OPERATING EXPENSES TO INCREASE SIGNIFICANTLY, WHICH MAY IMPEDE OUR
ABILITY TO ACHIEVE PROFITABILITY
As we grow our business we expect operating expenses to increase
significantly, and as a result, we will need to generate increased quarterly
revenue to achieve and maintain profitability. In particular, we expect to incur
additional costs and expenses related to:
- the expansion of our sales force and distribution channels;
- the expansion of our product and services offerings;
- development of relationships with strategic business partners;
- the expansion of management and infrastructure; and
- brand development, marketing and other promotional activities.
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IF WE CANNOT FUND OPERATIONS FROM CASH GENERATED BY OUR BUSINESS, WE MAY BE
REQUIRED TO SELL ADDITIONAL COMMON STOCK, WHICH COULD DEPRESS OUR COMMON STOCK
PRICE
To date, we have been unable to fund our operations from cash generated by
our business and have funded operations primarily by selling securities. If our
revenue fails to offset operating expenses, we may be required to fund future
operations through the sale of additional common stock, which could cause our
common stock price to decline.
FLUCTUATIONS IN OUR OPERATING RESULTS MAKE IT DIFFICULT TO PREDICT OUR FUTURE
PERFORMANCE AND MAY RESULT IN VOLATILITY IN THE MARKET PRICE OF OUR COMMON STOCK
Our annual operating results have fluctuated in the past and may fluctuate
significantly in the future due to a variety of factors, particularly as a
result of the risks we describe in this section. Because our operating results
are volatile and difficult to predict, you should not rely on the results of one
quarter as an indication of future performance. It is likely that in some future
quarter our operating results will fall below the expectations of securities
analysts and investors. In this event, the trading price of our common stock may
fall significantly.
THE LOSS OF KEY MANAGEMENT PERSONNEL COULD HARM OUR BUSINESS AND DECREASE THE
VALUE OF YOUR INVESTMENT
Our success depends largely upon the continued services of our key
management and technical personnel, the loss of which could seriously harm our
business. In particular, we rely on Richard Kreysar, President, Chief Executive
Officer and a director, and Bob Page, Vice President of Product Development and
Chief Technology Officer. Messrs. Kreysar and Page do not have employment or
non-competition agreements and could therefore terminate their employment with
us at any time without penalty. We do not maintain key person life insurance
policies on any of our employees.
WE FACE INTENSE COMPETITION WHICH COULD MAKE IT DIFFICULT FOR US TO ACQUIRE AND
RETAIN CUSTOMERS NOW AND IN THE FUTURE
The market for e-business analysis solutions is intensely competitive,
evolving and subject to rapid technological change. We expect the intensity of
competition to increase in the future. Competitors vary in size and in the scope
and breadth of the products and services they offer. Our principal competitors
today include:
- vendors of software that target e-business customer data collection and
analysis markets such as Andromedia, Inc., net.Genesis Corporation,
WebTrends Corporation, Broadbase Software, Inc. and E.piphany, Inc.;
- developers of software that address only certain technology components of
our products; and
- in-house development efforts by potential customers or partners.
We expect that if we are successful in our strategy to expand the scope of
our products and services, we may encounter many additional, market-specific
competitors. In addition, because there are relatively low barriers to entry in
the software market, we expect additional competition from traditional business
intelligence and enterprise software vendors as the Internet software market
continues to develop and expand. Some of these companies, as well as some other
competitors, have longer operating histories, significantly greater financial,
technical, marketing and other resources, significantly greater name recognition
and a larger installed base of customers than we have. In addition, many of our
competitors have well-established relationships with current and potential
customers of ours, have extensive knowledge of our industry and are capable of
offering a single-vendor solution. As a result, our competitors may be able to
respond more quickly to new or emerging technologies and changes in customer
requirements, devote greater resources to the development, promotion and sale of
their products, or adopt more aggressive pricing policies to gain market share.
In addition, current and potential competitors have established or may establish
cooperative relationships among themselves or with third parties to increase
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the ability of their products to address customer needs. Accordingly, it is
possible that new competitors or alliances among competitors may emerge and
rapidly acquire significant market share. We also expect that competition will
increase as a result of software industry consolidations.
Increased competition is likely to result in price reductions, reduced
gross margins and loss of market share, any of which could seriously harm our
business, financial condition and results of operations. We may not be able to
compete successfully against current and future competitors, in which case our
business could suffer.
IF WE ARE UNABLE TO MEET THE RAPID CHANGES IN e-COMMERCE TECHNOLOGY, OUR PRODUCT
REVENUE COULD DECLINE
The market for our products is marked by rapid technological change,
frequent new product introductions, Internet-related technology enhancements,
uncertain product life cycles, changes in client demands and evolving industry
standards. We cannot be certain that we will successfully develop and market new
products, new product enhancements or new products compliant with present or
emerging Internet technology standards. In developing our products, we have
made, and will continue to make, assumptions with respect to which standards
will be adopted by the industry, our customers and competitors. If the standards
adopted are different from those which we have chosen to support, market
acceptance of our products may be significantly reduced or delayed and our
business will be seriously harmed. In addition, we may be required to make
significant expenditures to adapt our products to changing or emerging
technologies. New products based on new technologies or new industry standards
can render existing products obsolete and unmarketable. To succeed, we will need
to enhance our current products and develop new products on a timely basis to
keep pace with developments related to Internet technology and to satisfy the
increasingly sophisticated requirements of our clients. E-business analysis
technology is complex and new products and product enhancements can require long
development and testing periods. Any delays in developing and releasing enhanced
or new products could harm our business, operating results and financial
condition.
THE FAILURE TO RETAIN AND ATTRACT KEY TECHNICAL PERSONNEL COULD HARM OUR
BUSINESS AND DECREASE THE VALUE OF YOUR INVESTMENT
Because of the complexity of our products and technologies, we are
substantially dependent upon the continued service of our existing product
development personnel. In addition, we intend to hire a number of engineers with
high levels of experience in designing and developing software and
Internet-related products in time-pressured environments. The competition in
Silicon Valley for qualified engineers in the computer software and Internet
markets is intense. New personnel will require training and education and take
time to reach full productivity. Our future success depends on our ability to
attract, train and retain these key personnel.
FAILURE TO EXPAND OUR SALES OPERATIONS AND CHANNELS OF DISTRIBUTION WOULD LIMIT
OUR GROWTH
In order to maintain and increase our market share and revenue, we will
need to expand our direct and indirect sales operations and channels of
distribution. We have recently expanded our direct sales force and plan to hire
additional sales personnel. As of September 15, 2000, our direct sales and
support organization consisted of 102 employees. Competition for qualified sales
personnel is intense, and we might not be able to hire the kind and number of
sales personnel we are targeting. New hires will require extensive training and
typically take several months to achieve productivity. In addition, we need to
expand our relationships with domestic and international channel partners,
distributors, value-added resellers, systems integrators, online and other
resellers, Internet service providers, original equipment manufacturers, and
other partners to build our indirect sales channel.
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WE MAY BE UNABLE TO ADEQUATELY DEVELOP A PROFITABLE PROFESSIONAL SERVICES
ORGANIZATION, WHICH COULD NEGATIVELY AFFECT BOTH OUR OPERATING RESULTS AND OUR
ABILITY TO ASSIST OUR CUSTOMERS WITH THE IMPLEMENTATION OF OUR PRODUCTS
Customers that license our software typically engage our professional
services organization to assist with support, training, consulting and
implementation of their e-business analysis solutions. We believe that growth in
our product sales depends on our ability to provide our customers with these
services and to educate third-party resellers on how to use our products. We
expect our services revenue to increase in absolute dollars as we continue to
provide consulting and training services that complement our products and as our
installed base of customers grows. We generally bill our clients for our
services on a fixed-price basis; however, from time to time we bill our clients
on a time-and-materials basis. Failure to estimate accurately the resources and
time required for an engagement, to manage our customers' expectations
effectively regarding the scope of services to be delivered for an estimated
price or to complete fixed-price engagements within budget, on time and to the
customer's satisfaction could expose us to risks associated with cost overruns,
and in some cases, penalties, and may harm our business. Although we plan to
expand our services in order to address our customers' needs, we cannot be
certain that this organization will ever achieve profitability.
OUR GROWTH COULD BE LIMITED IF WE FAIL TO EXECUTE OUR PLAN TO EXPAND
INTERNATIONALLY
Licenses and services sold to clients located outside of the United States
were less than 5% of our total revenue in fiscal year 1999, less than 15% of our
total revenue in fiscal year 2000, approximately 15% of our total revenue in the
first six months of fiscal year 2001. We expect international revenue to account
for an increasing percentage of total revenue in the future. We believe that we
must continue to expand our international sales activities in order to be
successful. We initiated operations in selected international markets in the
third quarter of our fiscal year ending March 31, 2000. Continued expansion into
international markets will require management attention and resources. We also
intend to enter into a number of international alliances as part of our
international strategy and rely extensively on these business partners to
conduct operations, coordinate sales and marketing efforts, and provide software
localization services. As of September 15, 2000, we had non-exclusive alliances
with Sumisho Electronics Company, Ltd., a subsidiary of Sumitomo Corporation,
and Itochu Techno-Science Corporation for distribution of our products in Japan,
and a small number of value added resellers and distributors for distribution of
our products in Europe. These alliances are not subject to binding agreements,
have no specified performance requirements by us or our alliance partners, and
may be terminated by either party at any time. Our success in international
markets will depend on the success of our business partners and their
willingness to dedicate sufficient resources to our relationships. We cannot
assure you that we will be successful in expanding internationally.
International operations are subject to other inherent risks, including:
- protectionist laws and business practices that favor local competition;
- difficulties and costs of staffing and managing foreign operations;
- dependence on local vendors;
- multiple, conflicting and changing governmental laws and regulations;
- longer sales and collection cycles;
- foreign currency exchange rate fluctuations;
- political and economic instability;
- reduced protection for intellectual property rights in some countries;
- seasonal reductions in business activity; and
- expenses associated with localizing products for foreign countries.
If we fail to address these risks adequately our business may be seriously
harmed.
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OUR GROWTH COULD BE LIMITED IF WE FAIL TO SUCCESSFULLY IDENTIFY AND INTEGRATE
POTENTIAL ACQUISITIONS AND INVESTMENTS
Due to the intensely competitive nature of the e-business analysis market,
we believe that our success will depend on our ability to attain significant
market share, which will depend in part on our ability to successfully identify
and acquire businesses, products and technologies from third parties that are
complementary to our existing products and services. We do not have any present
understanding, nor are we having any discussions relating to any acquisition or
investment. We cannot be certain that we will be able to rapidly expand our
product and services offerings through these acquisitions or investments. Some
of the risks we may encounter include:
- complementary products and services may not be available on commercially
reasonable terms;
- we may be unable to compete for acquisitions of products and services
with many of our competitors who have greater financial resources than we
do;
- acquired products and services may not meet the needs of our customers;
- we may incur difficulties associated with the integration of the
personnel and operations of an acquired company with our personnel and
operations;
- we may incur difficulties in assimilating acquired products, services or
technologies, with our existing products, services and technologies; and
- integration of acquired and existing products and services may result in
decreases in revenue from existing products and services.
These difficulties could disrupt our ongoing business, distract our
management and employees and increase our expenses. Furthermore, we may have to
issue equity securities to pay for any future acquisition which could be
dilutive to our existing stockholders. We may also have to incur debt which
could contain covenants that restrict our operations. In addition, acquisitions
and investments may have negative effect on our reported results of operations
from acquisition-related charges and amortization of acquired technology and
other intangibles. Any of these acquisition-related risks could harm our
business.
OUR VARIED SALES CYCLES MAKE IT DIFFICULT TO BUDGET AND FORECAST OUR OPERATING
RESULTS
We have varied sales cycles because we generally need to educate potential
clients regarding the use and benefits of our product applications. The
stability of our sales cycle continues to evolve as our products mature. Our
sales cycles make it difficult to predict the quarter in which sales may fall
and to budget and forecast operating results. In addition, a significant portion
of our sales fall within the last month of a quarter, making it difficult to
predict revenue until late in the quarter and to adjust expenses accordingly.
OUR OPERATING RESULTS MAY BE ADVERSELY AFFECTED BY SMALL DELAYS IN CUSTOMER
ORDERS OR PRODUCT INSTALLATIONS
Small delays in customer orders can cause significant variability in our
license revenue and operating results for any particular period. We derive a
substantial portion of our revenue from the sale of software products and
related services. Our revenue recognition policy requires us to deliver the
software prior to recognizing any revenue for the product and to substantially
complete the implementation of our product before we can recognize service
revenue. Any end of quarter delays in orders for delivery or product
installation schedules could harm operating results for that quarter.
IF WE FAIL TO GENERATE REPEAT OR EXPANDED BUSINESS FROM OUR CURRENT AND FUTURE
CUSTOMERS, OUR BUSINESS WILL BE SERIOUSLY HARMED
Our success is dependent on the continued growth of our customer base and
the retention of our customers. For the fiscal year ended March 31, 1999 and
2000, approximately 15 - 20% and 25 - 30% of our revenue, respectively, was
derived from sales of products and services to existing customers. We expect
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to continue to derive a significant amount of revenue from our existing
customers. If we fail to generate repeat and expanded business from our current
and future customers, particularly from maintenance contract renewals, our
operating results would be seriously harmed. Our ability to attract new
customers will depend on a variety of factors, including the accuracy,
scalability, reliability and cost-effectiveness of our products and services and
our ability to effectively market our products and services. In the past, we
have lost potential customers to competitors for various reasons, including
lower prices and other incentives not matched by us. Many of our current
customers initially purchase a license for our products and services for
installation on a limited number of servers. If an installation is successful,
the customer may purchase additional licenses to expand the use of our products
in its organization, license additional products and services from us, or renew
maintenance fees.
IF WE FAIL TO SUCCESSFULLY PROMOTE OUR ACCRUE BRAND NAME OR IF WE INCUR
SIGNIFICANT EXPENSES PROMOTING AND MAINTAINING OUR ACCRUE BRAND NAME, OUR
BUSINESS COULD BE HARMED
Due in part to the emerging nature of the market for e-business analysis
solutions and the substantial resources available to many of our competitors,
there may be a time-limited opportunity for us to achieve and maintain a
significant market share. Developing and maintaining awareness of the Accrue
brand name is critical to achieving widespread acceptance of our e-business
analysis solutions. Furthermore, the importance of brand recognition will
increase as competition in the market for our products increases. Successfully
promoting and positioning the Accrue brand will depend largely on the
effectiveness of our marketing efforts and our ability to develop reliable and
useful products at competitive prices. Therefore, we may need to increase our
financial commitment to creating and maintaining brand awareness among potential
customers.
THE STRAIN THAT OUR GROWTH RATE PLACES UPON OUR SYSTEMS AND MANAGEMENT RESOURCES
MAY ADVERSELY AFFECT OUR BUSINESS AND DECREASE THE VALUE OF YOUR INVESTMENT
We have recently experienced a period of significant expansion of our
operations that has placed a significant strain on our management,
administrative and operational resources. In addition, we have recently hired a
significant number of employees and plan to further increase our total
headcount. Our headcount has increased from 22 at March 31, 1997, to 38 at March
31, 1998, to 59 at March 31, 1999, to 133 at March 31, 2000 and to 164 at
September 15, 2000. In addition, we intend to further expand our finance,
administrative and operations staff. Any failure to properly manage our growth
could have a material adverse effect on our business, results of operations, and
financial condition. To properly manage this growth, we must, among other
things, implement and improve additional and existing administrative, financial,
and operational systems, procedures, and controls on a timely basis. We may not
be able to complete the necessary improvements to our systems, procedures, and
controls necessary to support our future operations in a timely manner.
Management may not be able to hire, train, retain, motivate, and manage required
personnel and may not be able to successfully identify, manage, and exploit
existing and potential market opportunities. In connection with our expansion,
we plan to increase our operating expenses to expand our sales and marketing
operations, develop new distribution channels, fund greater levels of research
and development, broaden professional services and support, and improve
operational and financial systems. Failure of our revenue to increase along with
these expenses during any fiscal period could have a materially adverse impact
on our financial results for that period.
ACCRUE INSIGHT, OUR MOST IMPORTANT PRODUCT, IS NOT PROTECTED BY A PATENT. IF
ANOTHER PARTY WERE TO USE THIS TECHNOLOGY, OUR BUSINESS WOULD SUFFER
We regard substantial elements of our e-business analysis solutions as
proprietary and attempt to protect them by relying on patent, trademark, service
mark, trade dress, copyright, and trade secret laws and restrictions, as well as
confidentiality procedures and contractual provisions. However, Accrue Insight,
our most important product, is not protected by a patent. Any steps we take to
protect our intellectual property may be inadequate, time consuming, and
expensive. In addition, despite our efforts, we may be unable to prevent third
parties from infringing upon or misappropriating our intellectual property,
which
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<PAGE> 10
could have a material adverse effect on our business. Furthermore, legal
standards relating to the validity, enforceability, and scope of protection of
intellectual property rights in Internet-related industries are uncertain and
still evolving, and the future viability or value of any of our intellectual
property rights is uncertain. Effective trademark, copyright, and trade secret
protection may not be available in every country in which our products are
distributed or made available through the Internet. Furthermore, our competitors
may independently develop similar technology that substantially limits the value
of our intellectual property or design around patents issued to us.
OTHERS MAY BRING INFRINGEMENT CLAIMS AGAINST US WHICH COULD HARM OUR BUSINESS,
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In addition to the technology we have developed internally, we also use
code libraries developed and maintained by third parties and have acquired or
licensed technologies from other companies. Our internally developed technology,
the code libraries, or the technology we acquired or licensed may infringe a
third party's intellectual property rights who may bring claims against us
alleging infringement of their intellectual property rights. In recent years,
there has been significant litigation in the United States involving patents and
other intellectual property rights. We are not currently involved in any
intellectual property litigation. However, as the number of entrants into our
market increases, the possibility of an intellectual property claim against us
grows and we may be a party to litigation in the future to protect our
intellectual property or as a result of an alleged infringement of others'
intellectual property. These claims and any resulting litigation could subject
us to significant liability for damages and invalidation of our proprietary
rights, would likely be time-consuming and expensive to defend and would divert
management time and attention. Any potential intellectual property litigation
could also force us to do one or more of the following:
- cease selling, incorporating, or using products or services that
incorporate the challenged intellectual property;
- obtain from the holder of the infringed intellectual property right a
license to sell or use the relevant technology, which license may not be
available on reasonable terms, or at all; and/or
- redesign those products or services that incorporate infringing
technology.
Any of these results could seriously harm our business.
PRODUCT DEFECTS COULD LEAD TO LOSS OF CUSTOMERS WHICH COULD HARM OUR BUSINESS,
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Despite internal testing and testing by current and potential customers,
our current and future products may contain serious defects, including Year 2000
errors, the occurrence of which could result in adverse publicity, loss of or
delay in market acceptance, or claims by customers against us, any of which
could harm our business, results of operations, and financial condition. In
addition, our products and product enhancements are very complex and may from
time to time contain errors or result in failures that we did not detect or
anticipate when introducing our products or enhancements to the market. The
computer hardware environment is characterized by a wide variety of non-standard
configurations that make pre-release testing for programming or compatibility
errors very difficult and time consuming. Despite our testing, errors may still
be discovered in some new products or enhancements after the products or
enhancements are delivered to customers.
WE ARE SUBJECT TO POTENTIAL PRODUCT LIABILITY CLAIMS THAT COULD REQUIRE
CONSIDERABLE EFFORT AND EXPENSE TO DEFEND AND WHICH COULD HARM OUR BUSINESS
Our products are used to monitor the traffic data of our customers' Web
sites, and to segment, analyze and report this data. These and other functions
that our products provide are often critical to our customers, especially in
light of the considerable resources many organizations spend on the development
and maintenance of their Web sites. Our end-user licenses contain provisions
that limit our exposure to
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product liability claims, but these provisions may not be enforceable in all
jurisdictions. Additionally, we maintain limited product liability insurance. To
the extent our contractual limitations are unenforceable or these claims are not
covered by insurance, a successful product liability claim could harm our
business.
WE MAY BE UNABLE TO INTEGRATE SUCCESSFULLY MARKETWAVE CORPORATION, NEOVISTA
SOFTWARE, INC., PILOT SOFTWARE, INC. AND/OR ASSETS ACQUIRED FROM TANTAU
SOFTWARE, INC. AND TANTAU SOFTWARE INTERNATIONAL, INC. INTO OUR BUSINESS OR
ACHIEVE THE EXPECTED BENEFITS OF THE ACQUISITIONS
Our acquisition of Marketwave Corporation, which was completed in
September, 1999, and our acquisition of NeoVista Software, Inc., which was
completed in January 2000, and our acquisition of Pilot Software, Inc., which
was completed in September 2000, will require integrating the businesses and
operations of those three companies with our company. Similarly, our acquisition
of certain assets from Tantau Software, Inc. and Tantau Software International,
Inc., which was completed in July 2000, will require integrating new technology
into our business. We may not be able to successfully assimilate the personnel,
technology, operations and customers of Marketwave, NeoVista, Pilot and/or
Tantau into our business. In addition, we may fail to achieve the anticipated
synergies from these acquisitions, including marketing, product development,
distribution and other operational synergies. The integration process of these
businesses and assets may further strain our existing financial and managerial
controls and reporting systems and procedures. This may result in the diversion
of management and financial resources from our core business objectives. In
addition, we are not experienced in managing significant facilities or
operations in geographically distant areas. Finally, we cannot be certain that
we will be able to retain Marketwave, NeoVista, Pilot and/or Tantau employees.
WE MAY ACQUIRE TECHNOLOGIES OR COMPANIES IN THE FUTURE, AND THESE ACQUISITIONS
COULD RESULT IN THE DILUTION OF OUR STOCKHOLDERS AND DISRUPTION OF OUR BUSINESS
We may acquire technologies or companies in the future. Entering into an
acquisition entails many risks of any which could materially harm our business,
including:
- diversion of management's attention from other business concerns;
- failure to assimilate the acquired company with our pre-existing
business;
- potential loss of key employees from either our pre-existing business or
the acquired business;
- dilution of our existing stockholders as a result of issuing equity
securities; and
- assumption of liabilities of the acquired company.
EVOLVING REGULATION OF THE INTERNET MAY HARM OUR BUSINESS
As e-commerce continues to evolve, increasing regulation by federal, state,
or foreign agencies becomes more likely. This regulation is likely in the areas
of user privacy, pricing, content, quality of products and services, taxation,
advertising, intellectual property rights, and information security. In
particular, laws and regulations applying to the solicitation, collection, or
processing of personal or consumer information could negatively affect our
activities. Typically, our products capture traffic data when consumers,
business customers or employees visit a Web site. The perception of security and
privacy concerns, whether or not valid, may indirectly inhibit market acceptance
of our products. In addition, legislative or regulatory requirements may
heighten these concerns if businesses must notify Web site users that the data
captured after visiting Web sites may be used by marketing entities to
unilaterally direct product promotion and advertising to that user. We are not
aware of any similar legislation or regulatory requirements currently in effect
in the United States. Other countries and political entities, such as the
European Economic Community, have adopted legislation or regulatory
requirements. The United States may adopt similar legislation or regulatory
requirements. If consumer privacy concerns are not adequately addressed, our
business could be harmed. Moreover, the applicability to the Internet of
existing laws governing issues such as intellectual property ownership and
infringement, copyright, trademark, trade secret, obscenity and libel is
uncertain and developing. Furthermore, any regulation imposing fees or
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assessing taxes for Internet use could result in a decline in the use of the
Internet and the viability of e-commerce. Any new legislation or regulation, or
the application or interpretation of existing laws or regulations, may decrease
the growth in the use of the Internet, may impose additional burdens on
e-commerce or may require us to alter how we conduct our business. This could
decrease the demand for our products and services, increase our cost of doing
business, increase the costs of products sold through the Internet or otherwise
have a negative effect on our business, results of operations and financial
condition.
OUR SUCCESS DEPENDS ON CONTINUED USE AND EXPANSION OF THE INTERNET
Continued expansion in the sales of our e-business analysis solutions will
depend upon the continued growth of the Internet as a widely used medium for
commerce and communication. Rapid growth in the use of the Internet is a recent
phenomenon. Acceptance and use may not continue to develop at historical rates
and a sufficiently broad base of customers may not adopt or continue to use the
Internet and online services as a medium of commerce and communication. Demand
and market acceptance for recently introduced products and services relating to
the Internet are subject to a high level of uncertainty and few proven products
and services exist. If the Internet does not continue to grow as a widespread
communications medium and commercial marketplace, the demand for our e-business
analysis solutions could be significantly reduced. The Internet may not prove to
be a viable commercial marketplace because of inadequate development of the
necessary infrastructure, such as a reliable network backbone, or timely
development of complementary products, such as high speed modems. The Internet
infrastructure may not be able to support the demands placed on it by continued
growth. Additionally, the Internet could lose its viability due to delays in the
development or adoption of new standards and protocols to handle increased
levels of Internet activity, security, reliability, cost, ease of use,
accessibility, and quality of service.
BECAUSE ACCRUE'S OFFICERS AND DIRECTORS OWN APPROXIMATELY 13.7% OF THE
OUTSTANDING COMMON STOCK, YOU AND OTHER INVESTORS WILL HAVE MINIMAL INFLUENCE ON
STOCKHOLDER DECISIONS
As of October 31, 2000, our officers and directors beneficially owned
approximately 13.7% of our outstanding common stock. As a result, they will be
able to exercise significant influence over all matters requiring stockholder
approval, and you and other investors will have minimal influence over the
election of directors or other stockholder actions. As a result, these
stockholders could approve or cause Accrue to take actions which you disapprove
or that are contrary to your interests and those of other investors. Our
certificate of incorporation and bylaws do not provide for cumulative voting;
therefore, our controlling stockholders will have the ability to elect all of
our directors. The controlling stockholders will also have the ability to
approve or disapprove significant corporate transactions without further vote by
the investors who purchase common stock pursuant to this offering. This ability
to exercise influence over all matters requiring stockholder approval could
prevent or significantly delay another company or person from acquiring or
merging with us.
THE EFFECTS OF ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND IN DELAWARE
LAW COULD PREVENT A CHANGE IN CONTROL OF ACCRUE WHICH MAY REDUCE THE MARKET
PRICE OF OUR COMMON STOCK
Provisions of our certificate of incorporation and bylaws may have the
effect of delaying or preventing a merger or sale of Accrue, or making a merger
or acquisition less desirable to a potential acquirer, even where stockholders
may consider the acquisition or merger favorable. These provisions could also
have the effect of making it more difficult for a third party to effect a change
of control of the board of directors. The issuance of preferred stock may have
the effect of delaying, deferring, or preventing a change in control without
further action by the stockholders. Any issuance of preferred stock may harm the
market price of the common stock. The issuance of preferred stock may also
result in the loss of the voting control of holders of common stock to the
holders of the preferred stock.
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THE MARKET PRICE FOR OUR COMMON STOCK, LIKE OTHER TECHNOLOGY STOCKS, MAY BE
VOLATILE
The stock markets have, in general, and with respect to Internet companies
in particular, recently experienced extreme stock price and volume volatility
that has affected companies' stock prices. The stock markets may continue to
experience volatility that may adversely affect the market price of our common
stock. Stock prices for many companies in the technology and emerging growth
sector have experienced wide fluctuations that have often been unrelated to the
operating performance of these companies. Fluctuations such as these may affect
the market price of our common stock. In addition, if we fail to address any of
the risks described in this section, the market price for our common stock, and
consequently, the value of your investment, could decline.
SIGNIFICANT FLUCTUATIONS IN THE MARKET PRICE OF OUR COMMON STOCK COULD RESULT IN
SECURITIES CLASS ACTION CLAIMS AGAINST US, WHICH COULD SERIOUSLY HARM OUR
BUSINESS
Securities class action claims have been brought against companies in the
past where volatility in the market price of that company's securities has taken
place. This kind of litigation could be very costly and divert our management's
attention and resources, and any adverse determination in this litigation could
also subject us to significant liabilities, any or all of which could seriously
harm our business.
IF WE CANNOT RAISE FUNDS, IF NEEDED, ON ACCEPTABLE TERMS, WE MAY NOT BE ABLE TO
DEVELOP OR ENHANCE OUR PRODUCTS AND SERVICES, TAKE ADVANTAGE OF FUTURE
OPPORTUNITIES OR RESPOND TO COMPETITIVE PRESSURES OR UNANTICIPATED CAPITAL
REQUIREMENTS WHICH COULD HARM OUR BUSINESS
We expect the net proceeds from our public offering in July 1999, cash on
hand, cash equivalents and commercial credit facilities to meet our working
capital and capital expenditure needs for at least the next 12 months following
September 30, 2000. Accordingly, we may need to raise additional funds and we
cannot be certain that we would be able to obtain additional financing on
favorable terms, if at all. Further, if we issue equity securities, stockholders
may experience additional dilution or the new equity securities may have rights,
preferences or privileges senior to those of existing holders of common stock.
If we incur indebtedness to help us meet our future capital requirements, this
debt could contain covenants which restrict our operations. If we cannot raise
funds, if needed, on acceptable terms, we may not be able to develop or enhance
our products and services, take advantage of future opportunities or respond to
competitive pressures or unanticipated capital requirements, which could harm
our business, operating results and financial condition.
SUBSTANTIAL SALES OF OUR COMMON STOCK COULD CAUSE OUR STOCK PRICE TO DECLINE
Sales of a substantial number of shares of common stock in the public
market, or the perception that these sales may occur, could adversely affect the
market price of the common stock by potentially introducing a large number of
sellers of our common stock into a market in which the common stock price is
already volatile, thus driving the common stock price down. In addition, the
sale of these shares could impair our ability to raise capital through the sale
of additional equity securities. As of October 17, 2000, we had 30,355,976
shares of common stock outstanding. 4,485,000 shares of our common stock,
including the underwriter's option to purchase additional shares which was
exercised in full, were registered in connection with the initial public
offering of our common stock. 3,225,261 shares of our common stock were issued
to the stockholders of Marketwave Corporation in connection with our acquisition
of that company, and such shares were subsequently registered with the
Securities and Exchange Commission in March 2000. Of the 3,225,261 shares of our
common stock registered in March 2000, as of November 1, 2000, 1,054,598 shares
had been subsequently sold and 1,088,309 of the remaining 2,170,663 shares are
being reregistered pursuant to the registration statement of which this
Prospectus is a part and 1,082,354 of the remaining 2,170,663 shares are to be
de-registered. 1,666,667 shares of our common stock were issued to Tantau
Software, Inc. in connection with our purchase of certain assets from Tantau and
its wholly owned subsidiary, Tantau Software International, Inc., in July 2000
and are registered pursuant to a registration statement on Form S-3/A declared
effective by the Securities and Exchange Commission on November 13, 2000.
974,273 shares of our common stock were issued to Platinum Equity Holdings, LLC
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<PAGE> 14
in connection with our acquisition of Pilot Software, Inc. in September 2000 and
are registered pursuant to a registration statement on Form S-3 declared
effective by the Securities and Exchange Commission on November 13, 2000. The
foregoing shares issued to the Marketwave shareholders, to Platinum Equity
Holding, and to Tantau which have been registered with the Securities and
Exchange Commission may be sold without restriction or further registration
under the federal securities laws unless held by our "affiliates" as that term
is defined in Rule 144 while the respective registration statements remain
effective. The remaining 21,087,129 shares of common stock outstanding are
"restricted securities" as that term is defined in Rule 144; however, virtually
all of these shares are eligible for sale, in some cases only subject to the
volume, manner of sale and notice requirements of Rule 144. In addition, we have
registered a total of 11,274,407 shares of our common stock under our existing
stock option and employee stock purchase plans, including options originally
granted under stock option plans of Marketwave Corporation and NeoVista
Software, Inc., which options are now exercisable for shares of our common
stock.
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USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
1,088,309 shares of common stock being offered by the Selling Stockholders.
ISSUANCE OF COMMON STOCK TO SELLING STOCKHOLDERS
On September 14, 1999, we closed a certain Agreement and Plan of Merger and
Reorganization with the Selling Stockholders pursuant to which we agreed to
issue to the Selling Stockholders 2,880,475 shares of our common stock in
exchange for Marketwave Corporation becoming our wholly-owned subsidiary. In
addition, 344,786 shares of our common stock were issued upon exercise by the
Selling Stockholders of outstanding Marketwave Corporation options that were
assumed by us in connection with our acquisition of Marketwave Corporation. This
Prospectus covers the resale of 1,088,309 shares of the common stock issued in
connection with our acquisition of Marketwave Corporation.
PLAN OF DISTRIBUTION
Shares of common stock offered by this Prospectus may be offered and sold
from time to time by the Selling Stockholders. As used in this Prospectus, the
term "Selling Stockholders" includes pledgees, transferees or other
successors-in-interest selling shares received from the Selling Stockholders as
a pledgor, a borrower or in connection with other non-sale-related transfers
after the date of this Prospectus. This Prospectus may also be used by
transferees of the Selling Stockholders, including broker-dealers of other
transferees who borrow or purchase the shares to settle or close out short sales
of shares of common stock. The Selling Stockholders will act independently of us
in making decisions with respect to the timing, manner and size of each sale.
The Selling Stockholders may sell shares on the Nasdaq National Market, or in
private sales at negotiated prices directly or through a broker. The Selling
Stockholders and any underwriters, dealers or agents who participate in the
distribution of the shares may be deemed to be "underwriters" under the
Securities Act of 1933. Any discount, commission or concession received by such
persons might be deemed to be an underwriting discount or commission under the
Securities Act. We have agreed to indemnify the Selling Stockholders against
certain liabilities arising under the Securities Act.
The Selling Stockholders will pay selling commissions or brokerage fees, if
any, with respect to the sale of the common stock offered by this Prospectus in
amounts customary for this type of transaction. The Selling Stockholders will
also pay all applicable transfer taxes and fees for their legal counsel incurred
in connection with the sale of shares.
The anti-manipulation rules under the Securities Exchange Act of 1934 may
apply to sales of the shares offered by this Prospectus in the market, and to
their own activities and those of their affiliates. The Selling Stockholders
have advised the Company that during such time as the Selling Stockholders may
be engaged in the attempt to sell Shares registered hereunder, the Selling
Stockholders will:
(i) not engage in any stabilization activity in connection with any of
the Company's securities;
(ii) cause to be furnished to each person to whom Shares included
herein may be offered, and to each broker-dealer, if any, through whom
Shares are offered, such copies of this Prospectus, as supplemented or
amended, as may be required by such person;
(iii) not bid for or purchase any of the Company's securities or any
rights to acquire the Company's securities, or attempt to induce any person
to purchase any of the Company's securities or rights to acquire the
Company's securities other than as permitted under the Exchange Act;
(iv) not effect any sale of distribution of the Shares until after the
Prospectus shall have been appropriately amended or supplemented, if
required, to set forth the terms thereof; and
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(v) effect all sales of Shares in broker's transactions through
broker-dealers acting as agents, in transactions directly with market
makers or in privately negotiated transactions where no broker or other
third party (other than the purchaser) is involved.
The Company has agreed to maintain the effectiveness of this Registration
Statement until January 27, 2001.
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<PAGE> 17
SELLING STOCKHOLDERS
The following table sets forth certain information as of October 17, 2000
with respect to the Selling Stockholders. The following table assumes that the
Selling Stockholders will sell all of the shares offered by this Prospectus. We
are unable to determine the exact number of shares that will actually be sold.
The number and percentage of shares beneficially owned is based on
30,355,976 shares outstanding at October 17, 2000 determined in accordance with
Rule 13d-3 of the Exchange Act. The information is not necessarily indicative of
beneficial ownership for any other purpose. Under Rule 13d-3, beneficial
ownership includes any shares as to which an individual has sole or shared
voting power or investment power, and also includes shares which an individual
has the right to acquire within 60 days of October 17, 2000 through the exercise
of any stock option or other right. Unless otherwise indicated in the footnotes,
each person has sole voting and investment power (or shares such powers with his
or her spouse) with respect to the shares shown as beneficially owned.
The Selling Stockholders have not had any material relationship with us or
any of our predecessors or affiliates within the last three years.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED NUMBER OWNED
PRIOR TO OFFERING(1) OF AFTER OFFERING(1)
--------------------- SHARES -------------------
SELLING STOCKHOLDERS NUMBER PERCENT OFFERED NUMBER PERCENT
-------------------- ---------- ------- ---------- ------- --------
<S> <C> <C> <C> <C> <C>
Steven T. Podrachik..................... 1,046,732 3.45% 1,046,732 0 *
1615 NE 63rd Street
Seattle, WA 98115
Michael D. McClure...................... 38,094 * 38,094 0 *
9520 221st Place SE
Woodinville, WA 98072
Wendy Williams.......................... 3,251 * 3,251 0 *
4215 NE 125th Street
Seattle, WA 98125
Elena Kopteva........................... 2,786 * 232 2,554 *
7557 20th Avenue NE
Seattle, WA 98115
</TABLE>
-------------------------
* Less than 1%
(1) Information with respect to beneficial ownership is based upon information
obtained from the Company's transfer agent and the Selling Stockholders.
(2) Assumes sale of all Shares offered hereby and no other purchases or sales of
the Company's Common Stock. See "Plan of Distribution."
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for the
Company by Venture Law Group, A Professional Corporation, 2775 Sand Hill Road,
Menlo Park, California 94025. John V. Bautista, a director of Venture Law Group,
is the Secretary of the Company. As of the date of this prospectus, certain
directors of Venture Law Group and an investment partnership affiliated with
Venture Law Group own 2,137 shares of the Company's common stock and hold
options to purchase 20,000 shares of the Company's common stock at an exercise
price of $8.00 per share.
EXPERTS
The consolidated financial statements of Accrue Software, Inc.,
incorporated in this Prospectus by reference to Accrue Software, Inc.'s Annual
Report on Form 10-K/A for the year ended March 31, 2000,
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<PAGE> 18
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The financial statements of Infocharger (a Business Unit of Tantau
Software, Inc.) as of December 31, 1999 and June 30, 2000, and from February 11,
1999 (inception) to December 31, 1999 and for the six months ended June 30,
2000, incorporated by reference in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated by reference elsewhere herein, and are
included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
ADDITIONAL INFORMATION AVAILABLE TO YOU
The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 under the Securities Act with respect to the
common stock offered hereby. This prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules. For further information with respect to the Company and the common
stock offered hereby, reference is made to the Registration Statement and to the
exhibits and schedules. Statements made in this prospectus concerning the
contents of any document referred to herein are not necessarily complete. With
respect to each such document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved. The Registration Statement and the exhibits and schedules may be
inspected without charge at the public reference facilities maintained by the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at Seven World Trade Center, 13th Floor, New
York, NY 10048, and the Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of all or any part of the
Registration Statement may be obtained from the SEC's offices upon payment of
fees prescribed by the SEC. The SEC maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of the
site is http://www.sec.gov.
The SEC allows the Company to "incorporate by reference" certain of its
publicly-filed documents into this prospectus, which means that information
included in those documents is considered part of this prospectus. Information
that the Company files with the SEC after the effective date of this prospectus
will automatically update and supersede this information. The Company
incorporates by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this prospectus and prior to the closing date of the
offering.
The following documents filed with the SEC are incorporated by reference in
this prospectus:
1. The Company's Annual Report on Form 10-K/A for the year ended March
31, 2000 (File No. 0-26437).
2. The description of the Company's common stock in its Registration
Statement on Form 8-A filed with the SEC on June 18, 1999 (File No.
0-26437).
3. The Company's definitive Proxy Statement dated July 17, 2000, filed
in connection with our August 31, 2000 Annual Meeting of Stockholders.
4. The Company's Current Report on Form 8-K, filed with the SEC on
July 26, 2000 (File No. 0-26437).
5. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000 (File No. 0-26437).
6. The Company's Current Report on Form 8-K, filed with the SEC on
September 21, 2000 (File No. 0-26437).
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7. The Company's Current Report on Form 8-K/A, filed with the SEC on
September 22, 2000 (File No. 0-26437).
8. The Company's Current Report on Form 8-K, filed with the SEC on
October 27, 2000 (File No. 0-26437).
9. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000 (File No. 0-26437).
10. The Company's Current Report on Form 8-K, filed with the SEC on
November 21, 2000 (File No. 0-26437).
The Company will furnish without charge to you, on written or oral request,
a copy of any or all of the documents incorporated by reference, other than
exhibits to those documents. You should direct any requests for documents to
Gregory C. Walker, Chief Financial Officer, Accrue Software, Inc., 48634 Milmont
Drive, Fremont, California 94538, and telephone: (510) 586-4500.
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[BACK OUTSIDE PROSPECTUS COVER]
[ACCRUE LOGO]
EACH SELLING STOCKHOLDER THAT EFFECTS TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE SELLING STOCKHOLDERS' OBLIGATION TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD SHARES REGISTERED PURSUANT TO THIS PROSPECTUS.
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale and distribution of the common stock
being registered. Selling commissions and brokerage fees and any applicable
transfer taxes and fees and disbursements of counsel for the Selling
Stockholders are payable individually by the Selling Stockholders. All amounts
are estimates except the SEC registration fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE
PAID
-------
<S> <C>
SEC registration fee........................................ $ 1,437
Printing.................................................... $ 5,000
Legal fees and expenses..................................... $30,000
Accounting fees and expenses................................ $25,000
Miscellaneous fees and expenses............................. $ 5,000
-------
Total..................................................... $66,437
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "Delaware Law")
authorizes a court to award, or a corporation's Board of Directors to grant,
indemnity 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,
as amended (the "Securities Act"). Article XIII of the Registrant's Certificate
of Incorporation and Article VI of the Company's Bylaws provide for
indemnification of the Company's directors, officers, employees and other agents
to the maximum extent permitted by Delaware Law. In addition, the Company has
entered into Indemnification Agreements with its officers and directors.
In connection with this offering, the Selling Stockholders have agreed to
indemnify the Registrant, its directors and officers and each such person who
controls the Registrant, against any and all liability arising from inaccurate
information provided to the Registrant by the Selling Stockholders and contained
herein up to a maximum of the net proceeds received by the Selling Stockholders
from the sale of their Shares hereunder.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
2.1+ Agreement and Plan of Merger and Reorganization dated as of
September 14, 1999, by and between the Company, Marketwave
Acquisitions Corporation and Marketwave Corporation.
2.2++ Agreement and Plan of Merger and Reorganization dated as of
November 17, 1999, by and between Accrue, NeoVista
Acquisition Corp. and NeoVista Software, Inc.
4.2+ Investors' Rights Agreement dated as of September 30, 1999,
by and between the Company and the Marketwave Holders.
4.3+++ Marketwave Corporation 1997 Stock Option Plan.
4.4+++ NeoVista Software, Inc. 1991 Incentive Stock Option Plan.
4.5+++ NeoVista Software, Inc. 1991 Non-Qualified Stock Option
Plan.
5.1++++ Opinion of Venture Law Group regarding the legality of the
Common Stock being registered.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
</TABLE>
II-1
<PAGE> 22
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
23.2 Consent of Ernst & Young LLP, Independent Auditors.
23.3 Consent of Counsel (included in Exhibit 5.1).
24.1++++ Power of Attorney.
</TABLE>
-------------------------
+ Previously filed with our Current Report on Form 8-K dated September 30,
1999, and incorporated herein by reference.
++ Previously filed with our Current Report on Form 8-K dated January 14,
2000, and incorporated herein by reference.
+++ Previously filed with our Registration Statement on Form S-8 (#333-95903)
and incorporated herein by reference.
++++Previously filed with our Registration Statement on Form S-3 (File No.
333-49292) and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 15 above 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 Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted against the Registrant 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 whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-2
<PAGE> 23
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 Fremont, State of California, on the 21st day of
November 2000.
ACCRUE SOFTWARE, INC.
By: /s/ RICHARD D. KREYSAR
------------------------------------
Richard D. Kreysar
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ RICHARD D. KREYSAR President and Chief November 21, 2000
-------------------------------------------------------- Executive Officer
Richard D. Kreysar (Principal Executive
Officer)
/s/ GREGORY C. WALKER Chief Financial Officer November 21, 2000
-------------------------------------------------------- (Principal Financial and
Gregory C. Walker Accounting Officer)
* Director November 21, 2000
--------------------------------------------------------
David Folkman
* Director November 21, 2000
--------------------------------------------------------
Max D. Hopper
* Director November 21, 2000
--------------------------------------------------------
A. Brooke Seawell
* Chairman of the Board of November 21, 2000
-------------------------------------------------------- Directors
Robert Smelick
* By: /s/ GREGORY C. WALKER
--------------------------------------------------------
Gregory C. Walker
Attorney-in-Fact
</TABLE>
II-3
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
2.1+ Agreement and Plan of Merger and Reorganization dated as of
September 14, 1999, by and between the Company, Marketwave
Acquisitions Corporation and Marketwave Corporation.
2.2++ Agreement and Plan of Merger and Reorganization dated as of
November 17, 1999, by and between Accrue, NeoVista
Acquisition Corp. and NeoVista Software, Inc.
4.2+ Investors' Rights Agreement dated as of September 30, 1999,
by and between the Company and the Marketwave Holders.
4.3+++ Marketwave Corporation 1997 Stock Option Plan.
4.4+++ NeoVista Software, Inc. 1991 Incentive Stock Option Plan.
4.5+++ NeoVista Software, Inc. 1991 Non-Qualified Stock Option
Plan.
5.1++++ Opinion of Venture Law Group regarding the legality of the
Common Stock being registered.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Ernst & Young LLP, Independent Auditors.
23.3 Consent of Counsel (included in Exhibit 5.1).
24.1++++ Power of Attorney (see page II-3).
</TABLE>
-------------------------
+ Previously filed with our Current Report on Form 8-K dated September 30,
1999, and incorporated herein by reference.
++ Previously filed with our Current Report on Form 8-K dated January 14,
2000, and incorporated herein by reference.
+++ Previously filed with our Registration Statement on Form S-8 (#333-95903)
and incorporated herein by reference.
++++Previously filed with our Registration Statement on Form S-3 (File No.
333-49292) and incorporated herein by reference.
