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As filed with the Securities and Exchange Commission on September 8, 2000
Registration No.333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RED HAT, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or other jurisdiction of incorporation or organization)
06-1364380
(I.R.S. Employer Identification Number)
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2600 Meridian Parkway
Durham, North Carolina 27713
(919) 547-0012
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Matthew Szulik
President and Chief Executive Officer
Red Hat, Inc.
2600 Meridian Parkway
Durham, North Carolina 27713
(919) 547-0012
(Name, address including zip code, and telephone number, including area code, of
agent for service)
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Copies to:
Brian T. Atkinson, Esq.
Moore & Van Allen, PLLC
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202-4003
(704) 331-1000
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Approximate date of commencement of proposed sale to the public: From time to
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time after the effective date of this Registration Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
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, 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.[_]
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
Title of Each Class of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered (1) Unit Price (2) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $0.0001 179,610 $26.38 $4,738,112 $1,251
par value
</TABLE>
(1) Also includes an indeterminate number of shares that selling stockholders
may acquire as a result of a stock-split, stock dividend or similar
transaction involving the common stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended. The
average high and low prices of the Registrant's common stock reported by the
Nasdaq National Market on September 6, 2000 was $26.38 per share.
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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 this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
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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. The prospectus is not an offer
to sell and it is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
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SUBJECT TO COMPLETION.
PRELIMINARY PROSPECTUS DATED SEPTEMBER 8, 2000
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179,610 Shares
Red Hat, Inc.
Common Stock
The selling stockholders identified in this prospectus may offer and sell
the shares of common stock offered by this prospectus from time to time. We
previously issued the shares in private offerings to raise capital or to acquire
the selling stockholders' businesses or other assets.
We are registering the offer and sale of the shares held by the selling
stockholders to satisfy our contractual obligations to provide the selling
stockholders with freely tradeable shares. Red Hat will not receive any of the
proceeds from the sale of shares being sold by the selling stockholders.
The common stock is quoted on the Nasdaq National Market under the symbol
"RHAT." The last reported sale price of the common stock on September 6, 2000
was $25.69 per share.
See "Risk Factors" section beginning on page 2 to read about certain factors you
should consider before buying shares of our common stock.
Neither the U.S. Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the adequacy
or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
Prospectus dated September __, 2000.
<PAGE>
SUMMARY
You should read the following summary together with the more detailed
information appearing elsewhere in, or incorporated by reference into, this
prospectus. You should also read our financial statements and the notes to
those statements incorporated by reference into this prospectus.
We are a leading global developer and provider of open source software and
solutions. Unlike proprietary software, open source software has publicly
available source code and can be copied, modified and distributed with minimal
restrictions. Our software and solutions are provided for a variety of
computing systems, ranging from desktops, workstations and servers to special-
purpose computing devices such as wireless telephones, personal digital
assistants, routers and phone switches.
We offer professional services for the Red Hat Linux operating system,
related tools and libraries and popular open source applications. Our services
include technical support and maintenance, developer support, custom
development, consulting, training and education and hardware certification.
Our web site, redhat.com, is a leading destination for open source software
users and developers and serves as the primary delivery mechanism and customer
interface for many of our solutions. redhat.com also offers extensive news and
content for the open source community, an important forum for open source
software development, a commerce site and priority access for software downloads
and upgrades.
We are committed to serving the interests and needs of open source software
users and developers and to sharing our product developments with the open
source community. Companies with which we have strategic relationships include
Cisco, Compaq, Dell, Hewlett Packard, IBM, Intel, Nokia, Nortel, Oracle, SAP,
Silicon Graphics and Sony Computer Entertainment.
Our common stock is traded on the Nasdaq National Market under the symbol
"RHAT." Our principal executive offices are located at 2600 Meridian Parkway,
Durham, North Carolina 27713. Our telephone number is (919) 547-0012.
RISK FACTORS
You should carefully consider and evaluate all of the information in this
prospectus, including the risk factors set forth below and the documents
incorporated by reference into this prospectus, before investing in the shares
being offered.
Risks Related to our Linux-based Open Source Business Model
Our open source software business model is unproven.
We have not demonstrated the success of our open source business model, which
gives our customers the right to freely copy and distribute our software. No
other company has built a successful open source business. Few open source
software products have gained widespread commercial acceptance partly due to the
lack of viable open source industry participants to offer adequate service and
support on a long term basis. In addition, open source vendors are not able to
provide industry standard warranties and indemnities for their products, since
these products have been developed largely by independent parties over whom open
source vendors exercise no control or supervision. If open source software
should fail to gain widespread commercial acceptance, we would not be able to
sustain our revenue growth and our business could fail.
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We depend on the support of Linus Torvalds and other prominent Linux developers
to release major product upgrades and maintain market share.
We may not be able to release major product upgrades of Red Hat Linux on a
timely basis because the heart of Red Hat Linux, the Linux kernel, is maintained
by third parties. Linus Torvalds, the original developer of the Linux kernel,
and a small group of independent engineers are primarily responsible for the
development and evolution of the Linux kernel. If this group of developers
fails to further develop the Linux kernel or if Mr. Torvalds or other prominent
Linux developers, such as Alan Cox, David Miller or Stephen Tweedie, were to
join one of our competitors or no longer work on the Linux kernel, we will have
to either rely on another party to further develop the kernel or develop it
ourselves. We cannot predict whether enhancements to the kernel would be
available from reliable alternative sources. We could be forced to rely to a
greater extent on our own development efforts, which would increase our
development expenses and may delay our product release and upgrade schedules. In
addition, any failure on the part of the kernel developers to further develop
and enhance the kernel could stifle the development of additional Linux-based
applications.
We may not be able to effectively assemble and test our software because it
consists largely of code developed by independent third parties over whom we
exercise no control, which could result in unreliable products and damage to our
reputation.
Red Hat Linux, in compressed form, consists of approximately 546 megabytes of
code. Of that total, approximately 500 megabytes have been developed by
independent third parties, including approximately 10 megabytes of code
contained in the Linux kernel. Included within the 546 megabytes of code are
approximately 700 distinct software components developed by thousands of
individual programmers which we must assemble and test before we can release a
new version of Red Hat Linux. If these components are not reliable, Red Hat
Linux could fail, resulting in serious damage to our reputation and potential
litigation. Although we attempt to assemble only the best available components,
we cannot be sure that we will be able to identify the highest quality and most
reliable components or successfully assemble and test them. In addition, if
these components were no longer available, we would have to develop them
ourselves, which would significantly increase our development expenses.
The scarcity of software applications for Linux-based operating systems could
prevent commercial adoption of our products.
Our products will not gain widespread commercial adoption until there are more
third-party software applications designed to operate on Linux-based operating
systems. These applications include word processors, databases, accounting
packages, spreadsheets, e-mail programs, Internet browsers, presentation and
graphics software and personal productivity applications. We intend to
encourage the development of additional applications that operate on Linux-based
operating systems by attracting third-party developers to the Linux platform, by
providing open source tools to create these applications and by maintaining our
existing developer relationships through marketing and technical support for
third-party developers. If we are not successful in achieving these goals,
however, our products will not gain widespread commercial acceptance and we will
not be able to maintain our product sales growth.
We may not be able to generate revenue from sales of Official Red Hat Linux if
users can more quickly download it from the Internet.
Anyone can download a free copy of Red Hat Linux from the Internet. However,
because this download can take up to 36 hours using a standard telephone
connection, many of our users choose to buy the shrink-wrapped version of
Official Red Hat Linux. If hardware and data transmission technology advances
in the future to the point where increased bandwidth allows users to more
quickly download our products from the Internet, users may no longer choose to
purchase Official Red Hat Linux. This could lead to a significant loss of
product revenue.
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We may not succeed in shifting our business focus from traditional shrink-
wrapped software sales to offering subscription-based product and services
offerings.
We have recently begun to focus our sales and marketing efforts on providing
subscription-based products and services as opposed to relying on sales of
shrink-wrapped software. This change has required us to expend significant
financial and managerial resources and may ultimately prove unsuccessful. The
failure to successfully implement this transition of our sales model could
materially adversely affect our operating results.
Our customers may find it difficult to install and implement Red Hat Linux,
which could lead to customer dissatisfaction and damage our reputation.
Installation and implementation of Red Hat Linux often involves a significant
commitment of resources, financial and otherwise, by our customers. This
process can be lengthy due to the size and complexity of our products and the
need to purchase and install new applications. The failure by us to attract and
retain services personnel to support our customers, the failure of companies
with which we have strategic alliances to commit sufficient resources towards
the installation and implementation of our products, or a delay in
implementation for any other reason could result in dissatisfied customers.
This could damage our reputation and the Red Hat brand and result in decreased
revenue.
We may be unable to predict the future course of open source technology
development, which could reduce the market appeal of our products and damage our
reputation.
We do not exercise control over many aspects of the development of open source
technology. Historically, different groups of open source software programmers
have competed with each other to develop new technology. Typically one of those
groups develops the technology that becomes more widely used than that developed
by others. If we adopt new technology and incorporate it into our products, and
competing technology becomes more widely used, the market appeal of our products
may be reduced, which could harm our reputation, diminish the Red Hat brand and
result in decreased revenue.
Risks Related to our Financial Results and Condition
Our limited operating history in the new and developing market for Linux-based
operating systems makes it difficult to evaluate our business.
Red Hat was formed in March 1993. We began offering Red Hat Linux in October
1994. Our limited operating history makes it difficult to evaluate the risks
and uncertainties that we face. Our failure to address these risks and
uncertainties could cause our business results to suffer and result in the loss
of all or part of your investment.
We have limited combined operating history with the companies we have acquired
since our initial public offering and may have difficulty integrating these
businesses.
The successful integration of the operations, products, services and personnel
of Red Hat and the five companies we have acquired since our initial public
offering -- Cygnus Solutions, Hell's Kitchen Systems, Inc., Bluecurve, Inc.,
WireSpeed Communications Corporation and C2Net Software, Inc. -- is important to
the future financial performance of the combined enterprise. The anticipated
benefits of these acquisitions may not be achieved unless, among other things,
the operations, products, services and personnel of the acquired companies are
successfully combined with those of Red Hat in a timely and efficient manner.
Integration of these companies' operations, products, services and personnel
may be hampered because, among other things:
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. the products and services offered by each of the acquired companies
and Red Hat are highly complex and have been developed independently;
. integration of the product lines of Red Hat and each of the acquired
companies will require the coordination of separate development and
engineering teams from each company; and
. the employees and management of the acquired companies and Red Hat are
located in disparate geographical regions.
In addition, the costs associated with integrating these companies' operations,
products, services and personnel may be substantial and could include, among
other things:
. employee redeployment or relocation; and
. the combination of research and development teams and processes.
Any of these difficulties and costs encountered in the transition process, could
divert the attention of management, and could have an adverse impact on the
revenues and operating results of the combined enterprise.
We expect to incur substantial losses for the foreseeable future.
We have incurred operating losses in five of our previous six fiscal years,
including our most recent fiscal year ended February 29, 2000. We expect to
incur significant losses for the foreseeable future, as we substantially
increase our sales and marketing, research and development and administrative
expenses. In addition, we are investing considerable resources in our web
initiative and to expand our professional services offerings. As a result, we
cannot be certain when or if we will achieve sustained profitability. Failure to
become and remain profitable may adversely affect the market price of our common
stock and our ability to raise capital and continue operations.
You should not rely on our quarterly results of operations as an indication of
our future results because they fluctuate significantly and are difficult to
forecast.
Due to our limited combined operating history and the unpredictability of our
business, our revenue and operating results may fluctuate significantly from
quarter to quarter and are difficult to forecast. We base our current and
projected future expense levels in part on our estimates of future revenue. Our
expenses are, to a large extent, fixed in the short term. We may not be able to
adjust our spending quickly if our revenue falls short of our expectations.
Accordingly, a revenue shortfall in a particular quarter would have a
disproportionate adverse effect on our operating results for that quarter. You
should not rely on quarter-to-quarter comparisons of our results of operations
as an indication of our future performance. Our future operating results may
fall below expectations of securities analysts or investors, which would likely
cause the market price of our common stock to decline significantly.
We may not be able to effectively attract additional enterprise customers and
preserve relationships with current enterprise customers, which could adversely
affect revenue.
Historically, we focused our sales and marketing efforts on product sales to
individuals. We have recently, however, begun to focus our efforts on expanding
our enterprise customer base. To this end, we have invested extensively to
attract enterprise customers. In addition, we have gained a significant number
of enterprise customers through our acquisition of Cygnus Solutions. These
enterprise customers expect diverse and extensive service programs, and if we
are unable to continue to successfully expand and
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enhance our service offerings, we may not be able to meet these customers' needs
or attract new customers, and, consequently, our revenue would suffer.
Our failure to update and modernize our internal systems, procedures and
controls may prevent the implementation of our business strategies in a rapidly
evolving market and may retard our future growth.
Our operational and financial systems, procedures and controls, which were
adequate for a small private company, are becoming outdated as we grow. During
the last completed fiscal year, since March 1, 1999 we have increased the number
of employees more than tenfold. To accommodate this growth, we have evaluated
our financial and operational systems, procedures and controls. Although we
have revised or are in the process of revising and updating most of them, if we
continue our rapid growth, we may not be able to improve our transaction
processing and reporting systems and procedures, or expand and train our
expanding workforce quickly enough to maintain a competitive position in our
markets. In addition, failure to quickly replace obsolete systems, procedures
and controls could impede our management's decision-making abilities. This, in
turn, may impair our ability to pursue business opportunities and may hamper
future growth.
We may not be able to generate enough additional revenue from our international
expansion to offset the costs associated with establishing and maintaining
foreign operations.
A key component of our growth strategy is to expand our presence in foreign
markets. We have recently established subsidiaries or offices in Ireland, the
United Kingdom, Germany, Italy, Japan, France, Singapore and Australia, and are
considering further expansion worldwide. We may also enter other markets as
opportunities arise. It will be costly to establish international facilities
and operations, promote our brand internationally, and develop localized web
sites and other systems. Revenue from international activities may not offset
the expense of establishing and maintaining these foreign operations. In
addition, because we have little experience in marketing and distributing
products or services for these markets, we may not benefit from any first-to-
market advantages.
Our management team may not be able to successfully implement our business
strategies because it has only recently begun to work together.
Our business is highly dependent on the ability of our management to work
together effectively to meet the demands of our growth. Several members of our
senior management, including our Chief Executive Officer and President, Matthew
Szulik, and our Chief Operating Officer, Tim Buckley, have been employed by us
for a relatively short period of time. These individuals have not previously
worked together as a management team. In addition, the members of our
management team who have been with us since 1997 or earlier have had only
limited experience managing a rapidly growing company on either a public or
private basis. The failure of our management team to work together effectively
could prevent efficient decision-making by our executive team, affecting product
development and sales and marketing efforts, which would negatively impact our
operating results.
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We depend on our key personnel.
Our future success depends on the continued services of a number of key
directors and officers, including our Chairman, Robert Young, our Chief
Executive Officer and President, Matthew Szulik, and our Chief Operating
Officer, Tim Buckley. The loss of the technical knowledge and industry
expertise of any of these people could seriously impede our success. Moreover,
the loss of one or a group of our key employees, particularly to a competitor,
and any resulting loss of customers could reduce our market share and diminish
the Red Hat brand.
We may lack the financial and operational resources needed to increase our
market share and compete effectively with Microsoft, other established operating
systems developers, software development tools developers and other service and
support providers.
In the market for operating systems, we face significant competition from larger
companies with greater financial resources and name recognition than we have.
These competitors, which offer hardware-independent multi-user operating systems
for Intel platforms and/or UNIX-based operating systems, include Microsoft,
Novell, IBM, Sun Microsystems, The Santa Cruz Operation, AT&T, Compaq, Hewlett-
Packard, Olivetti and Unisys. Some of these competitors currently, or may in the
future, produce and market open source operating systems.
With our acquisition of Cygnus, we now face competition in the market for
software development tools and operating systems for special purpose computing.
Our competitors in this market, some of which have greater market share than we
do, include Wind River Systems, Integrated Systems Incorporated, Green Hills
Software, and the Metrowerks subsidiary of Motorola. Some of these companies
currently produce or use open source software as part of their product
offerings. We may not be able to compete effectively in this market if
customers choose proprietary solutions. If the demand for open source solutions
in this market expands, however, we could lose market share as existing
competitors reposition or new companies emerge to address the opportunity.
As we increase our services offerings, we may face competition from larger and
more capable companies that currently service and support other operating
systems, particularly UNIX-based operating systems, due to the fact that Linux-
and UNIX-based operating systems share many common features. These companies
may be able to leverage their existing service organizations and provide higher
levels of support on a more cost-effective basis than we can. We may not be
able to compete successfully with these current or potential competitors.
We may not be able to match the promotional activities and pricing policies
offered by other suppliers of Linux-based and other open source operating
systems, which could result in a loss of market share.
In the new and rapidly-evolving market for Linux-based operating systems, we
face intense competition from a number of other suppliers of Linux-based
operating systems. We also face competition to a lesser extent from developers
of non-Linux-based open source operating systems such as BSD-based operating
systems. BSD-based operating systems such as FreeBSD, NetBSD and OpenBSD are
open source operating systems produced by communities of developers working
together via the Internet, and which are published and distributed by Walnut
Creek CD-ROM, among others. We expect competition in broader open source
operating systems and the Linux-based operating systems market to intensify. In
addition, companies like Sun Microsystems and Corel, which are more established
and have larger customer bases than we do, have indicated a growing interest in
the market for Linux-based operating systems. These companies may be able to
undertake more extensive promotional activities, adopt more aggressive pricing
policies, and offer more attractive terms to their customers than we can.
Furthermore, because Linux-based operating systems can be downloaded from the
Internet for free or purchased at a nominal cost and modified and re-sold with
few restrictions, traditional barriers to entry are minimal. Accordingly, it is
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possible that new competitors or alliances among existing competitors may emerge
and rapidly acquire significant market share.
If we fail to establish and maintain strategic distribution and other
collaborative relationships with industry-leading companies, we may not be able
to attract and retain a larger customer base.
Our success depends on our ability to continue to establish and maintain
strategic distribution and other collaborative relationships with industry-
leading hardware manufacturers, distributors, software vendors and enterprise
solutions providers. These relationships allow us to offer our products and
services to a much larger customer base than we would otherwise be able to
through our direct sales and marketing efforts. We may not be able to maintain
these relationships or replace them on attractive terms. In addition, our
existing strategic relationships do not, and any future strategic relationships
may not, afford us any exclusive marketing or distribution rights. As a result,
the companies with which we have strategic alliances are free to pursue
alternative technologies and to develop alternative products and services in
addition to or in lieu of our products and services, either on their own or in
collaboration with others, including our competitors. Moreover, we cannot
guarantee that the companies with which we have strategic relationships will
market our products effectively or continue to devote the resources necessary to
provide us with effective sales, marketing and technical support.
Any disruption in our relationships with our two largest distributors, on whom
we rely for a significant percentage of our product revenue, could cause our
revenue to decline.
We are highly dependent on revenue from sales to our two largest distributors,
Frank Kasper & Associates and Ingram Micro, who together accounted for a
significant percent of our total revenue for the fiscal year ended February 29,
2000. These distributors are not obligated to purchase products from us and the
loss of one or both of these distributors, or a reduction in the amount of
product sales generated by them, could significantly reduce our product revenue.
We may not be able to meet the operational and financial challenges that we will
encounter as our international operations expand.
As we expand our international operations, we will face a number of additional
challenges associated with the conduct of business overseas. For example:
. we may have difficulty managing and administering a globally-dispersed
business;
. fluctuations in exchange rates may negatively affect our operating
results;
. we may not be able to repatriate the earnings of our foreign
operations;
. we have to comply with a wide variety of foreign laws with which we
are not familiar;
. we may not be able to adequately protect our trademarks overseas due
to the uncertainty of laws and enforcement in certain countries
relating to the protection of intellectual property rights;
. reductions in business activity during the summer months in Europe and
certain other parts of the world could negatively impact the operating
results of our foreign operations;
. export controls could prevent us from shipping our products into and
from some markets;
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. multiple and possibly overlapping tax structures could significantly
reduce the financial performance of our foreign operations;
. changes in import/export duties and quotas could affect the
competitive pricing of our products and services and reduce our market
share in some countries; and
. economic or political instability in some international markets could
result in the forfeiture of some foreign assets and the loss of sums
spent developing and marketing those assets.
Expanding our services business will be costly and may not result in any benefit
to us.
We have recently expanded our strategic focus to place additional emphasis on
consulting, custom engineering and development, education and support services,
from which we have historically derived an insignificant amount of revenue. We
cannot be certain that our customers will engage our professional services
organization to assist with support, consulting, custom development, training
and implementation of our products. We also cannot be certain that we can
attract or retain a sufficient number of the highly qualified services personnel
that the expansion of our services business will need. In addition, this
expansion has required, and will continue to require, significant additional
expenses and development, financial and operational resources. The need for
these additional resources will place further strain on our management,
financial and operational resources and may make it more difficult for us to
achieve and maintain profitability.
Attempts to expand by means of business combinations and strategic alliances may
not be successful and may harm our operational efficiency, financial performance
and relationships with employees and third parties.
We may continue to expand our operations or market presence by entering into
additional business combinations, investments, joint ventures or other strategic
alliances with hardware manufacturers, software vendors, Internet companies,
open source software developers or other companies both in the United States and
internationally. Our ability to expand in this way may be limited due to the
many financial and operational risks accompanying these transactions. For
example:
. we may have difficulty assimilating the operations, technology and
personnel of the combined companies;
. our business may be disrupted by the allocation of resources to
consummate these transactions;
. we may have problems retaining key technical and managerial personnel
from acquired companies;
. we may experience one-time in-process research and development charges
and ongoing expenses associated with amortization of goodwill and
other purchased intangible assets;
. our stockholders will suffer dilution if we issue equity to fund these
transactions;
. acquired businesses may initially be unprofitable resulting in our
assumption of operating losses and increased expenses;
. our reputation may be harmed if the open source development community
does not approve of these transactions;
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. our relationships with existing employees, customers and business
partners may be weakened or terminated as a result of these
transactions; and
. our investment activities, particularly with respect to emerging-
growth technology companies, are inherently risky and we may not
realize any benefit from such activities.
Risks Related to our Internet Strategy
We may fail to promote and enhance our web site effectively, which may prevent
us from attracting new visitors, advertisers or electronic commerce partners to
our web site.
Enhancing the redhat.com web site is critical to our ability to increase our
revenue. In order to attract and retain Internet users, advertisers and
electronic commerce partners, we intend to substantially increase our
expenditures for enhancing and further developing our web site. Our success in
promoting and enhancing the redhat.com web site will also depend on our ability
to provide high quality content, features and functionality. If we fail to
promote our web site successfully or if visitors to our web site or advertisers
do not perceive our services to be useful, current or of high quality, our
ability to generate revenue from our web site will be significantly impaired.
Visitors to our web site could experience delays and decreased performance
during periods of heavy traffic, which could result in dissatisfaction with our
web site and damage to our reputation.
Our web site must accommodate a high volume of traffic and deliver frequently
updated information. Our web site has in the past experienced slower response
times or decreased traffic for a variety of reasons. These occurrences have not
had a material impact on our business. These types of occurrences in the
future, however, could materially adversely affect our reputation and brand name
and could cause users to perceive our web site as not functioning properly.
Under these circumstances, our users might choose another web site or other
methods to obtain Linux-based operating systems or Linux-related information.
Because there is no industry standard for the measurement of the effectiveness
of Internet advertising, advertisers may not increase or even maintain their
current levels of Internet advertising, which would prevent us from generating a
significant amount of revenue from our web site.
As we execute our Internet strategy, we expect to derive an increasing
percentage of our revenue from sponsorships and advertising on our web site. We
may not generate these revenues if advertisers do not maintain or increase their
current levels of Internet advertising. As there is no industry standard for the
measurement of the effectiveness of Internet advertising, advertisers that
currently advertise on the Internet may reduce or eliminate this form of
advertising and advertisers that have traditionally relied upon other
advertising media may be reluctant to begin to advertise on the Internet.
Moreover, widespread adoption of currently available software programs that
limit or prevent advertisements from being delivered to an Internet user's
computer would negatively affect the commercial viability of Internet
advertising and would further deter advertisers from increasing or maintaining
current levels of Internet advertising. Our ability to successfully execute our
Internet strategy will be adversely affected if the market for Internet
advertising fails to develop or develops more slowly than expected.
We may not be able to respond quickly to new pricing models for advertising,
which could prevent us from attracting quality sponsors to our web site.
Different pricing models are used to sell advertising on the Internet. It is
difficult to predict which, if any, will emerge as the industry standard. If we
cannot quickly and successfully respond to changes in pricing
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models for Internet advertising, or identify and adopt any industry standards
that may emerge, we will not be able to attract a sufficient number of quality
sponsors and our Internet advertising strategy will fail.
We may be unable to adequately measure the demographics of visitors to our web
site, which is critical to our ability to attract advertising revenue.
We expect that it will be important to our advertisers that we accurately
measure the demographics of the visitors to our web site. While we have not
committed significant resources to the measurement of demographics to date, we
are currently implementing systems designed to record demographic data on our
web site's visitors. This implementation may be costly, and if not done
effectively, may not permit us to accurately measure the demographic
characteristics of our web site's visitors. Until these new systems are
functional, we will continue to rely on third parties to provide some of these
measurement services. If these parties were unable to provide these services,
we would need to obtain them from other providers, which might not be readily
available. Companies may choose not to advertise on our web site or may pay
less for advertising if they do not perceive our measurements or measurements
made by third parties to be reliable.
Our Internet strategy will fail if the infrastructure of the Internet is not
continually developed and maintained.
The success of our Internet strategy will depend in large part on the continued
development and maintenance of the infrastructure of the Internet. Because
global commerce and the online exchange of information is new and evolving, we
cannot predict with any certainty that the Internet will be a viable commercial
marketplace in the long term. The Internet has experienced, and we expect it to
continue to experience, significant growth in the number of users and amount of
traffic. If the Internet continues to experience an increased number of users,
frequency of use or increased bandwidth requirements of users, it may not be
able to support the demands placed upon it by this growth, and its performance
and reliability may suffer. Furthermore, the Internet has experienced a variety
of outages and other delays as a result of damage to portions of its
infrastructure, and could face similar outages and delays in the future. Any
outage or delay could affect the level of Internet usage, as well as the volume
of traffic on our web site. In addition, the Internet could lose its viability
due to increased governmental regulation and delays in the development or
adoption of new standards and protocols to handle increased levels of activity.
If the necessary infrastructure, standards or protocols or complementary
products, services or facilities are not developed, or if the Internet does not
become a viable commercial marketplace, our Internet strategy will not succeed.
We are vulnerable to unexpected network interruptions caused by system failures,
which may result in reduced visitor traffic on our web site, decreased revenue
and harm to our reputation.
Substantially all of our communications hardware and other hardware related to
our web site is located at our facilities, although we have back-up and co-
location hardware for our web site located at third-party facilities. Fire,
floods, hurricanes, tornadoes, earthquakes, power loss, telecommunications
failures, break-ins and similar events could damage these systems. In addition,
although we have implemented network security measures, our servers are
vulnerable to computer viruses, electronic break-ins, human error and other
similar disruptive problems which could adversely affect our systems and web
site. Although we try to prevent unauthorized access to our systems, we cannot
eliminate this risk entirely. We could lose revenue and suffer damage to our
reputation if our systems were affected by any of these occurrences. Our
insurance policies may not adequately compensate us for any losses that may
occur due to failures or interruptions in our systems. We do not presently have
any secondary "off-site" systems or a formal disaster recovery plan.
11
<PAGE>
Risks Related to Legal Uncertainty
We could be prevented from selling or developing our products if the GNU General
Public License and similar licenses under which our products are developed and
licensed are not enforceable.
The Linux kernel and the Red Hat Linux operating system have been developed and
licensed under the GNU General Public License and similar licenses. These
licenses state that any program licensed under them may be liberally copied,
modified and distributed. We know of no circumstance under which these licenses
have been challenged or interpreted in court. Accordingly, it is possible that
a court would hold these licenses to be unenforceable in the event that someone
were to file a claim asserting proprietary rights in a program developed and
distributed under them. Any ruling by a court that these licenses are not
enforceable, or that Linux-based operating systems, or significant portions of
them, may not be liberally copied, modified or distributed, would have the
effect of preventing us from selling or developing our products.
Our products may contain defects that may be costly to correct, delay market
acceptance of our products and expose us to litigation.
Despite testing by us and our customers, errors have been and may continue to be
found in our products after commencement of commercial shipments. This risk is
exacerbated by the fact that most of the code in our products is developed by
independent parties over whom we exercise no supervision or control. If errors
are discovered, we may have to make significant expenditures of capital to
eliminate them and yet may not be able to successfully correct them in a timely
manner or at all. Errors and failures in our products could result in a loss of,
or delay in, market acceptance of our products and could damage our reputation
and our ability to convince commercial users of the benefits of Linux-based
operating systems and other open source software products.
In addition, failures in our products could cause system failures for our
customers who may assert warranty and other claims for substantial damages
against us. Although our license agreements with our customers typically contain
provisions designed to limit our exposure to potential product liability claims,
it is possible that these provisions may not be effective or enforceable under
the laws of some jurisdictions. Our insurance policies may not adequately limit
our exposure to this type of claim. These claims, even if unsuccessful, could be
costly and time consuming to defend.
We are vulnerable to claims that our products infringe third-party intellectual
property rights particularly because our products are comprised of many distinct
software components developed by thousands of independent parties.
We may be exposed to future litigation based on claims that our products
infringe the intellectual property rights of others. This risk is exacerbated by
the fact that most of the code in our products is developed by independent
parties over whom we exercise no supervision or control. Claims of infringement
could require us to reengineer our products or seek to obtain licenses from
third parties in order to continue offering our products. In addition, an
adverse legal decision affecting our intellectual property, or the use of
significant resources to defend against this type of claim, could place a
significant strain on our financial resources and harm our reputation.
Our efforts to protect our trademarks may not be adequate to prevent third
parties from misappropriating our intellectual property rights.
Our most valuable intellectual property is our collection of trademarks. The
protective steps we have taken in the past have been, and may in the future
continue to be, inadequate to deter misappropriation of our trademark rights.
Although we do not believe that we have suffered any material harm from
12
<PAGE>
misappropriation to date, we may be unable to detect the unauthorized use of, or
take appropriate steps to enforce, our trademark rights. We have registered some
of our trademarks in the United States, Europe and Australia and have other
trademark applications pending in the United States, Europe, Australia, Canada,
Europe and Japan. Effective trademark protection may not be available in every
country in which we offer or intend to offer our products and services. Failure
to adequately protect our trademark rights could damage or even destroy the Red
Hat brand and impair our ability to compete effectively. Furthermore, defending
or enforcing our trademark rights could result in the expenditure of significant
financial and managerial resources.
We may be sued as a result of information published or posted on or accessible
from our redhat.com web site.
We may be subjected to claims for defamation, negligence, copyright or trademark
infringement or other claims relating to the information we publish on our web
site. These types of claims have been brought, sometimes successfully, against
online services in the past, and can be costly to defend. We may also be
subjected to claims based on content that is accessible from our web site
through links to other web sites or through content and materials that may be
posted by visitors to our web site. We believe that the scope and amount of our
commercial and general liability insurance is appropriate, given our current
financial position. However, this insurance may not adequately protect us
against these types of claims. We have not been a party to any lawsuit of this
type to date.
Risks Related to the Market for Our Common Stock
Our stock price has been extremely volatile and you may not be able to resell
your shares at or above the offering price.
The trading price of our common stock has been and is likely to continue to be
highly volatile and could be subject to wide fluctuations in response to factors
such as:
. actual or anticipated variations in quarterly operating results;
. new products or services offered by Red Hat or our competitors;
. changes in financial estimates by securities analysts;
. conditions or trends in the Internet, Linux and software industries;
. changes in the economic performance and/or market valuations of other
Internet, Linux and software industries;
. announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments;
. additions or departures of key personnel;
. sales of common stock; and
. other events or factors, many of which are beyond our control.
In addition, the stock market in general, and the Nasdaq National Market and the
market for Internet-related and technology companies in particular, has
experienced extreme price and volume fluctuations that
13
<PAGE>
have often been unrelated or disproportionate to the operating performance of
such companies. In addition, broad market and industry factors may materially
adversely affect the market price of our common stock, regardless of our actual
operating performance. In the past, following periods of volatility in the
market price of a company's securities, securities class-action litigation has
often been instituted against such companies. Such litigation, if instituted,
could result in substantial costs and a diversion of management's attention
and resources, which would materially adversely affectour business, financial
condition and operating results.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary", "Risk Factors",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Business", and elsewhere in this prospectus constitute forward-
looking statements. In some cases, you can identify forward-looking statements
by terminology such as "may", "will", "should", "expects", "plans",
"anticipates", "believes", "estimated", "predicts", "potential", or "continue"
or the negative of such terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties, and
other factors that may cause our or our industry's actual results, levels of
activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievements expressed or
implied by such forward-looking statements. These factors include, among other
things, those listed under "Risk Factors" and elsewhere in this prospectus.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. We are under no duty to update any of
the forward-looking statements after the date of this prospectus to conform
forward-looking statements to actual results.
WHERE YOU CAN FIND MORE INFORMATION ABOUT RED HAT
We file annual, quarterly and current reports, proxy statements and other
information with the U.S. Securities Exchange Commission (the "SEC"). These
reports and information relate to our business, financial condition and other
matters. You may read and copy these reports, proxy statements and other
information at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC located at 7
World Trade Center, Suite 1300, New York, New York 10048 and at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. You may obtain information on the
operation of the SEC's Public Reference Room in Washington, D.C. by calling the
SEC at 1-800-SEC-0330. Copies may be obtained from the SEC by paying the
required fees. The SEC maintains an internet web site that contains reports,
proxy and information statements and other information regarding Red Hat and
other registrants that file electronically with the SEC. The SEC's web site is
located at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring to documents we have previously filed with the SEC. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file later with the SEC will automatically update and
supercede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), until the selling stockholders sell all the shares offered by this
prospectus or we terminate the offering.
(1) The section entitled "Description of the Registrant's Securities to
be Registered" contained in our Registration Statement on Form 8-A
(File No. 00026281) filed on June 4, 1999, pursuant to Section 12(g)
of the Exchange Act;
14
<PAGE>
(2) Our Annual Report on Form 10-K for the fiscal year ended February 29,
2000;
(3) Our Quarterly Report on Form 10-Q for the fiscal quarter ended May 31,
2000;
(4) Our Current Report on Form 8-K, dated June 26, 2000, reporting our
entry into a definitive agreement to acquire WireSpeed Communications
Corporation ("WireSpeed");
(5) Our Current Report on Form 8-K, dated August 11, 2000, reporting the
completion of the WireSpeed acquisition; and
(6) Our Current Report on Form 8-K, dated August 23, 2000, reporting our
entry into a definitive agreement to acquire C2Net Software, Inc.
("C2Net").
We will provide a free copy of any or all of the documents incorporated by
reference in this prospectus (excluding exhibits to these documents unless the
exhibits are specifically incorporated by reference) to anyone who receives this
prospectus. Written or telephone requests should be directed to Mark H. Webbink,
General Counsel, Red Hat, Inc., Post Office Box 13588, Research Triangle Park,
North Carolina 27709.
This prospectus is part of a Registration Statement on Form S-3 filed with
the SEC by Red Hat. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits to the registration
statement. Statements about the contents of contracts or other documents
contained in this prospectus or in any other filing to which we refer you are
not necessarily complete. You should review the actual copy of these documents
filed as an exhibit to the registration statement or other filing. You may
obtain a copy of the registration statement and the exhibits filed with it from
the SEC at any of the locations listed above.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares being sold by the
selling stockholders.
DIVIDEND POLICY
We have never paid any cash dividends on our common stock and do not
anticipate paying any cash dividends in the foreseeable future. We presently
intend to retain future earnings, if any, to finance the expansion and growth of
our business. Payment of future dividends, if any, will be at the discretion of
our Board of Directors after taking into account various factors, including our
financial condition, operating results, current and anticipated cash needs and
plans for expansion.
15
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information known to Red Hat
regarding the beneficial ownership of the shares to be offered by this
prospectus as of August 29, 2000 and as adjusted to reflect the sale of the
shares of common stock in this offering.
Unless otherwise indicated, to the knowledge of Red Hat, each stockholder
possesses sole voting and investment power over the shares listed, except for
shares owned jointly with that person's spouse.
The number of shares of common stock deemed outstanding includes shares
issuable upon exercise of options and warrants held by the respective person or
group which may be exercised within 60 days after August 29, 2000. For purposes
of calculating each person's or group's percentage ownership, stock options
exercisable within 60 days after August 29, 2000 and warrants are included for
that person or group but not the stock options and warrants of any other person
or group.
<TABLE>
<CAPTION>
Number of
Number of Number of Shares
Shares Beneficially Shares to be Beneficially
Owned Prior to Sold Owned After the
Name of Selling Stockholder the Offering in the Offering Offering
--------------------------- ------------ --------------- --------
<S> <C> <C> <C>
Lawrence J. Weidman 140,060 46,687 93,373
L. Todd Masco 132,044 44,015 88,029
Andrew M. Bressen 29,849 9,950 19,899
Barbara Jean Masco Abdul-Malek 38,430 12,810 25,620
Open Source, Inc. 36,209 36,209 ---
Stephen G. Wadlow 149 50 99
Victoria Landgraf 2,089 696 1,393
Gregory Plesur 5,224 1,741 3,483
Joshua Bluestein 1,492 497 995
Robert Miles 5,224 1,741 3,483
Regis Donovan 746 249 497
Maurice Rickard 746 249 497
Andrew M. Boardman 448 149 299
John G. Myers 508 169 339
Neil Masco 299 100 199
Horn Family Limited Partnership 14,924 4,975 9,949
Eleanor DeJulio 30 10 20
Robert A. and Mary K. Cumming 448 149 299
Frank J. DeJulio 5,970 1,990 3,980
Robert Weidman 2,686 895 1,791
Clifford B. and Rosanne M. Levine 8,995 2,985 5,970
Maria DiMaria 149 50 99
Marina LaCagnina 30 10 20
Douglas DeJulio 22,865 7,562 15,123
R. Joseph Vetter 2,239 746 1,493
Thomas G. Dopirak 895 298 597
Johathan L. Coburn 746 249 497
Thomas N. Canfield 4,975 1,658 3,317
Cynthia McMillin 1,194 398 796
Andrew Plotkin 3,283 1,094 2,189
Thorp, Reed & Armstrong, LLP 3,686 1,229 2,457
</TABLE>
PLAN OF DISTRIBUTION
Red Hat is registering 179,610 shares of the common stock offered hereby on
behalf of the selling stockholders. As used herein, "Selling Stockholders"
includes donees, pledgees, transferees or other successors-in-interest selling
shares received after the date of this prospectus from a Selling Stockholder, as
a gift, pledge, partnership distribution or other non-sale related transfer.
All costs, expenses and fees in connection with the registration of the common
stock offered hereby will be borne by Red Hat. Brokerage commissions and
similar selling expenses, if any, attributable to the sale of these shares of
common stock
16
<PAGE>
will be borne by the Selling Stockholders. Sales of shares may be effected by
Selling Stockholders from time to time in one or more types of transactions
(which may include block transactions) on the Nasdaq National Market, in
negotiated transactions, through put or call option transactions relating to the
shares, through short sales of shares or a combination of these methods of sale,
at market prices prevailing at the time of sale or at negotiated prices. These
transactions may or may not involve brokers or dealers. The Selling Stockholders
have advised us that they have not entered into any agreements, understandings
or arrangements with any underwriters or broker-dealers regarding the sale of
their securities, nor is their any underwriters or broker-dealers acting in
connection with the proposed sale of shares by the Selling Stockholders.
The Selling Stockholders may effect transactions by selling shares directly
to purchasers or through broker-dealers, which may act as agents or principals.
These broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of shares for whom these broker-dealers may act as agents or to whom they sell
as principal, or both. This compensation might be in excess of customary
commissions.
The Selling Stockholders and any broker-dealers that act in connection with
the sale of shares might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by these
broker-dealers and any profit on the resale of the Shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. We have agreed to indemnify each Selling Stockholder
against certain liabilities, including liabilities arising under the Securities
Act. The Selling Stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
Because Selling Stockholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the Selling Stockholders will be
subject to the prospectus delivery requirements of the Securities Act, which may
include delivery through the facilities of the Nasdaq National Market pursuant
to Rule 153 under the Securities Act. We have informed the Selling Stockholders
that the anti-manipulative provisions of Regulation M promulgated under the
Exchange Act may apply to their sales in the market.
Selling Stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
they meet the criteria and conform to the requirements of that Rule.
Upon being notified by a Selling Stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of Shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, we will file a supplement to this
prospectus, if required, pursuant to Rule 462(b) under the Securities Act,
disclosing (i) the name of the Selling Stockholder and the participating broker-
dealer(s), (ii) the number of shares involved, (iii) the price at which the
shares were sold, (iv) the commissions paid or discounts or concessions allowed
to the broker-dealer(s), where applicable,, (v) that the broker-dealer(s) did
not conduct any investigation to verify the information set forth or
incorporated by reference into this prospectus and (vi) other facts material to
the transaction. In addition, upon being notified by a Selling Stockholder that
a donee, pledgee, transferee or other successor-in-interest intends to sell more
than 500 shares, we will file a supplement to this prospectus.
TRANSFER AGENT
The transfer agent and registrar for the common stock is ChaseMellon
Stockholder Services, LLC.
LEGAL MATTERS
The validity of the shares of common stock to be issued in this offering
will be passed upon for Red Hat by Moore & Van Allen, PLLC, Charlotte, North
Carolina.
17
<PAGE>
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the fiscal year ended February
29, 2000 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses payable in connection with the offer and sale of the
common stock in this offering are as follows:
SEC registration fee $ 1,251
Legal fees and expenses 12,000
Accounting fees and expenses 7,500
Miscellaneous 249
--------
Total $ 21,000
========
The registrant will bear all of the expenses shown above.
Item 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law, the registrant's charter and by-laws
provide for indemnification of the registrant's directors and officers for
liabilities and expenses that they may incur in such capacities. In general,
directors and officers are indemnified with respect to actions taken in good
faith in a manner reasonably believed to be in, or not opposed to, the best
interests of the registrant, and with respect to any criminal action or
proceeding, actions that the indemnitee had no reasonable cause to believe were
unlawful. Reference is made to the registrant's corporate charter filed as
Exhibit 3.1 hereto and the registrants by-laws filed as Exhibit 3.2 hereto.
The registrant currently has in place and maintains a directors' and
officers' insurance policy.
Item 16. Exhibits and Financial Schedules
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Reorganization dated November 5, 1999
by and among the Registrant, Cygnus Solutions, Miami
Acquisition Corp. and Michael Tiemann, as Securityholder
Agent (1)
2.2 Agreement and Plan of Merger by and among the Registrant,
HKS Acquisition Corp., Hell's Kitchen Systems, Inc. and
certain shareholders of Hell's Kitchen Systems, Inc., dated
as of January 4, 2000 (2)
2.3 Agreement and Plan of Reorganization by and among the
Registrant, Blue Acquisition Corp., Bluecurve, Inc., Thomas
Grubb, Mark Robinson, Michael Evans, Ted Vrakas and Michael
Evans as Securityholder Agent, dated as of April 17, 2000
(4)
2.4 Stock Purchase Agreement by and among the Registrant,
WireSpeed Communications Corporation, the shareholders of
WireSpeed Communications Corporation and Andrew Baily as
Securityholder Agent, dated as of June 13, 2000 (3)
2.5 Stock Purchase Agreement, dated July 27, 2000, by and among
the Registrant, WireSpeed Communications Corporation, the
shareholders of WireSpeed Communications Corporation and
Andrew Baily as Securityholder Agent, dated as of June 13,
2000 (3)
II-1
<PAGE>
2.6 Agreement and Plan of Reorganization, dated August 11, 2000,
by and among the Registrant, Atlas Acquisition Corp., C2Net
Software, Inc., certain shareholders of C2Net Software, Inc.
and William D. Rowzee as Securityholder Agent (4)
4 Specimen certificate representing the Registrant's common
stock (5)
5 Opinion of Moore & Van Allen, PLLC (4)
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Moore & Van Allen, PLLC (included in Exhibit 5)
24 Power of Attorney (included on Signature Page of
Registration Statement)
-------------
(1) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended November 30, 1999.
(2) Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (File no. 333-94775).
(3) Incorporated by reference from the Registrant's Current Report on Form 8-
K, filed August 11, 2000.
(4) To be filed by amendment.
(5) Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (File no. 333-80051).
II-2
<PAGE>
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 Durham, State of North Carolina, on this 7th day of
September, 2000.
RED HAT, INC.
By: /s/ Matthew J. Szulik
-------------------------------------
Matthew J. Szulik
President and Chief Executive Officer
We the undersigned directors and officers of Red Hat, Inc. do hereby
constitute and appoint each of Matthew J. Szulik and Mark H. Webbink, each with
full power of substitution, our true and lawful attorney-in-fact and agent to do
any and all acts and things in our names and on our behalf in our capacities
stated below, which acts and things each of them deem necessary and advisable to
enable Red Hat, Inc. to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the U.S. Securities and Exchange
Commission, in connection with this Registration Statement, including
specifically, but not limited to, power and authority to sign for any and all of
us in our names, in the capacities stated below, any and all amendments
(including post-effective amendments) hereto and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, and to file the same, with all exhibits thereto, and other documents on
connection therewith, with the U.S. Securities and Exchange Commission, and we
do hereby ratify and confirm all that they shall do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
-------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Matthew J. Szulik Chief Executive Officer, President September 7, 2000
_______________________________ and Director (principal executive
Matthew J. Szulik officer)
/s/ Jason Savod U.S. Controller (principal September 7, 2000
_______________________________ financial and accounting officer)
Jason Savod
_______________________________ Director September __, 2000
Robert F. Young
/s/ Eugene J. McDonald Director September 7, 2000
_______________________________
Eugene J. McDonald
/s/ William S. Kaiser Director September 7, 2000
_______________________________
William S. Kaiser
_______________________________ Director September __, 2000
Kevin Harvey
/s/ Eric Hahn Director September 7, 2000
_______________________________
Eric Hahn
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Reorganization dated November 5, 1999
by and among the Registrant, Cygnus Solutions, Miami
Acquisition Corp. and Michael Tiemann, as Securityholder
Agent (1)
2.2 Agreement and Plan of Merger by and among the Registrant,
HKS Acquisition Corp., Hell's Kitchen Systems, Inc. and
certain shareholders of Hell's Kitchen Systems, Inc., dated
as of January 4, 2000 (2)
2.3 Agreement and Plan of Reorganization by and among the
Registrant, Blue Acquisition Corp., Bluecurve, Inc., Thomas
Grubb, Mark Robinson, Michael Evans, Ted Vrakas and Michael
Evans as Securityholder Agent, dated as of April 17, 2000
(4)
2.4 Stock Purchase Agreement by and among the Registrant,
WireSpeed Communications Corporation, the shareholders of
WireSpeed Communications Corporation and Andrew Baily as
Securityholder Agent, dated as of June 13, 2000 (3)
2.5 Stock Purchase Agreement, dated July 27, 2000, by and among
the Registrant, WireSpeed Communications Corporation, the
shareholders of WireSpeed Communications Corporation and
Andrew Baily as Securityholder Agent, dated as of June 13,
2000 (3)
2.6 Agreement and Plan of Reorganization, dated August 11, 2000,
by and among the Registrant, Atlas Acquisition Corp., C2Net
Software, Inc., certain shareholders of C2Net Software, Inc.
and William D. Rowzee as Securityholder Agent (4)
4 Specimen certificate representing the Registrant's common
stock (5)
5 Opinion of Moore & Van Allen, PLLC (4)
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Moore & Van Allen, PLLC (included in Exhibit 5)
24 Power of Attorney (included on Signature Page of
Registration Statement)
------------
(1) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended November 30, 1999.
(2) Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (File no. 333-94775).
(3) Incorporated by reference from the Registrant's Current Report on Form 8-
K, filed August 11, 2000.
(4) To be filed by amendment.
(5) Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (File no. 333-80051).
II-4
