PROSPECTUS
7,901,867 SHARES
SAVOIR TECHNOLOGY GROUP, INC.
COMMON STOCK
This prospectus relates to the resale from time to time of 7,901,867 shares
of common stock, $.01 par value per share, of Savoir Technology Group, Inc. held
by Savoir stockholders. The offering is not being underwritten.
The shares being offered by the selling stockholders include:
o 2,637,317 shares of common stock issued or issuable upon conversion of
Savoir Series A Preferred Stock;
o 1,121,250 shares of common stock issued or issuable upon the exercise
of warrants issued in connection with the sale of the Series A
Preferred Stock;
o 112,125 shares of common stock issuable upon the exercise of warrants
issued to the placement agents in connection with the private
placement of the Series A Preferred Stock and the related common stock
warrants;
o 828,001 shares of common stock issued as dividends on the Series A
Preferred Stock;
o 500,000 shares of common stock issuable upon the exercise of warrants
held by other Savoir securityholders; and
o 2,703,174 other shares of common stock held by Savoir stockholders.
The selling stockholders may offer and sell their shares in transactions on
the Nasdaq National Market, in negotiated transactions, or both. These sales may
occur at fixed prices that are subject to change, at prices that are determined
by prevailing market prices, or at negotiated prices.
The selling stockholders may sell shares to or through broker-dealers, who
may receive compensation in the form of discounts, concessions or commissions
from the selling stockholders, the purchasers of the shares, or both. Savoir
will not receive any of the proceeds from the sale of the shares.
Savoir common stock is traded on the Nasdaq National Market under the symbol
"SVTG." On May 14,
1999, the last reported sale price of Savoir common stock reported on the Nasdaq
National Market was $10.281 per share.
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INVESTING IN SAVOIR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY READ AND CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 3.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION 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.
May 17, 1999
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We have not authorized anyone to provide you with information or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. The selling stockholders are
offering to sell, and seeking offers to buy, only the shares of common stock
covered by this prospectus, and only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this prospectus is
current only as of its date, regardless of the time of delivery of this
prospectus or of any sale of the shares.
YOU SHOULD READ CAREFULLY THIS ENTIRE PROSPECTUS, AS WELL AS THE DOCUMENTS
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, BEFORE MAKING AN INVESTMENT
DECISION. ALL REFERENCES TO "WE," "US," "OUR" OR "SAVOIR" IN THIS PROSPECTUS
MEAN SAVOIR TECHNOLOGY GROUP, INC. AND ITS SUBSIDIARIES, EXCEPT WHERE IT IS MADE
CLEAR THAT THE TERM MEANS ONLY THE PARENT COMPANY.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements regarding future events
and Savoir's plans and expectations that involve risks and uncertainties. When
used in this prospectus, the words "estimate," "project," "intend" and "expect"
and similar expressions are intended to identify such forward-looking
statements. Such statements are subject to risks and uncertainties, including
those discussed below, that could cause actual results to differ materially from
those projected. Factors that may cause or contribute to such differences
include, but are not limited to, those discussed below under "Risk Factors," as
well as those discussed elsewhere in this prospectus and in the documents
incorporated herein by reference. These forward-looking statements speak only as
of the date hereof.
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TABLE OF CONTENTS
PAGE
The Company.............................................................. 3
Risk Factors............................................................. 3
Proceeds from the Offering............................................... 13
Income Tax Considerations................................................ 13
Selling Stockholders..................................................... 14
Plan of Distribution..................................................... 17
Legal Matters............................................................ 18
Experts.................................................................. 18
Where You Can Find More Information...................................... 18
Documents Incorporated by Reference...................................... 18
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THE COMPANY
Savoir is a value-added wholesale distributor of commercial mid-range
servers, peripheral equipment (including wireless networking equipment, storage
products, printers and terminals) and software. Through our Mid-Range Systems
Division, we primarily distribute commercial mid-range servers and related
products to value-added resellers (known in the industry as "VARs") who
generally incorporate commercial applications or other software and sell
integrated computer systems to end-user customers. Through our Computer and
Peripherals Group, we integrate and configure personal computers, workstations
and departmental servers for original equipment manufacturers (also known as
"OEMs"). We have a national presence served through four warehouse, distribution
and integration centers, and maintain sales offices throughout the United States
and Canada.
Savoir was incorporated in California in 1975, and we changed our state of
incorporation to Delaware in August 1997. Previously known as Western Micro
Technology, Inc., we changed our name to Savoir Technology Group, Inc. in
November 1997. Our principal executive office is located at 254 East Hacienda
Avenue, Campbell, California 95008, and our telephone number is (408) 379-0177.
RISK FACTORS
INVESTING IN SAVOIR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
READ AND CONSIDER CAREFULLY THE FOLLOWING FACTORS BEFORE MAKING AN INVESTMENT
DECISION.
WE ARE DEPENDENT UPON IBM AS OUR PRINCIPAL VENDOR
Our business, financial condition and results of operations are highly
dependent upon our relationship with International Business Machines Corporation
("IBM") and upon the continued market acceptance of IBM commercial mid-range
servers, storage products and other peripheral equipment. During the years ended
December 31, 1996, 1997 and 1998, approximately 50%, 65% and 80%, respectively,
of our net sales was generated from the sale of IBM products, and we expect the
percentage in 1999 to be consistent with 1998. Our agreement with IBM is
non-exclusive and may be unilaterally modified by IBM upon 30 days' written
notice, renews automatically but may be terminated by IBM upon written notice
given not less than 90 days prior to the renewal date (January 1, 2001),
provides no franchise rights and may not be assigned by us. The continued
consolidation of wholesale distributors of commercial mid-range servers may also
result in IBM raising the sales volume threshold required to maintain most
favorable volume discount status. As part of our business strategy, and in order
to maintain most favorable volume discount status with IBM, we have recently
completed several acquisitions and we are actively engaged in an ongoing search
for additional acquisitions. We are also seeking to make minority equity
investments in potential large customers for similar purposes. However, we
cannot assure you that we will be successful in completing any future
acquisitions or in making any equity investments. If we are unable to complete
other acquisitions or make equity investments, or are otherwise unable to
increase our sales volume through internal growth, we could lose our most
favorable volume discount status with IBM, which would, in turn, have a material
adverse effect on our relationship with IBM and on our business, financial
condition and results of operations. The occurrence of any of the following
events could have a material adverse effect upon our business, financial
condition and results of operations:
o any disruption, change or termination in our relationship with IBM or
in the manner in which IBM distributes its products;
o the failure of IBM to develop new products which are accepted by our
customers;
o our failure to continue to achieve sufficient sales volumes of certain
IBM products, or to maintain the required infrastructure, in each case
as required to maintain most favorable volume discount status; and
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o the addition of other wholesale distributors by IBM.
We receive market development funds from IBM. These market development funds
directly affect our gross profit, as we typically use them to offset a portion
of our sales and marketing expenses. Any change in the availability of these
market development funds would have a material adverse effect on our business,
financial condition and results of operations.
OUR OPERATING RESULTS MAY FLUCTUATE FROM QUARTER TO QUARTER
Our quarterly net sales and operating results may vary significantly as a
result of a variety of factors, including, but not limited to:
o changes in the supply and demand for commercial mid-range servers,
peripheral equipment, software and related services;
o the cost, timing and integration of acquisitions;
o the addition or loss of a key vendor or customer;
o the introduction of new technologies;
o changes in manufacturers' prices, price protection policies or stock
rotation (return) privileges;
o changes in market development or other promotional funds;
o product supply shortages;
o disruption of warehousing or shipping channels;
o inventory adjustments;
o increases in the amount of accounts receivable written off;
o price competition; and
o changes in the mix of products sold through distribution channels and
in the mix of products purchased by OEMs.
Our operating results could also be adversely affected by:
o general economic and other conditions affecting the timing of customer
orders and capital spending;
o a downturn in the market for commercial mid-range servers; and
o order cancellations or rescheduling.
In addition, historically a substantial portion of our net sales has been made
in the last few days of a quarter. Our quarterly operating results are therefore
difficult to predict and delays in the closing of sales near the end of a
quarter could cause quarterly net sales to fall substantially short of
anticipated levels and, to a greater degree, adversely affect profitability.
Thus, we believe that period-to-period comparisons of our operating results are
not necessarily meaningful and should not be relied upon as an indication of our
future performance. Our future operating results are expected to fluctuate as a
result of these and other factors, which could have a material adverse effect on
our business, financial condition and results of operations and on the price of
our common stock. It is possible that in future periods our operating results
may be below the expectations of securities
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analysts and investors. If this happens, it is likely that the market price of
our common stock would be materially and adversely affected.
WE FACE SUBSTANTIAL COMPETITION
The markets in which we operate are highly competitive. Competition is based
primarily on:
o product availability;
o price;
o credit availability;
o speed of delivery;
o ability to tailor specific solutions to customer needs; and
o breadth and depth of product lines and services, technical expertise
and pre-sale and post-sale service and support.
Increased competition may result in further price reductions, reduced gross
profit margins and loss of market share, any of which could materially and
adversely affect our business, financial condition and results of operations.
Through our Mid-Range Systems Division, we compete with national, regional
and local distributors, including Gates/Arrow Commercial Systems, a division of
Arrow Electronics, Inc., Hamilton Hall-Mark Computer Products, a subsidiary of
Avnet, Inc., and Pioneer Standard Electronics, Inc. In some limited
circumstances, we also compete with our own vendors.
In the distribution of storage products, we compete with national, regional
and local distributors. Through our Computers and Peripherals Group, we compete
with contract manufacturers, systems integrators and assemblers of computer
products. We have experienced, and expect to continue to experience, increased
competition from current and potential competitors, many of which have
substantially greater financial, technical, sales, marketing and other
resources, as well as greater name recognition and a larger customer base than
we do. Accordingly, present or future competitors may be able to respond more
quickly to new or emerging technologies and changes in customer requirements or
to devote greater resources to the development, promotion and sale of their
products than we can. Competitors that are larger than Savoir may be able to
obtain more favorable pricing and terms from vendors than we can. As a result,
we may be at a disadvantage when competing with these larger companies. If we
fail to compete effectively, our business, financial condition and results of
operations would be materially and adversely affected.
SIRIUS COMPUTER SOLUTIONS, LTD. ACCOUNTS FOR 15% OF OUR NET SALES
During the years ended December 31, 1997 and 1998 and during the quarter
ended March 31, 1999, sales to Sirius Computer Solutions, Ltd. accounted for
approximately 11%, 18% and 15%, respectively, of our net sales. Our sales to
Sirius are made under the Industry Remarketer Affiliate Agreement between Savoir
and Sirius dated as of September 30, 1997, under which we appointed Sirius as
one of our industry remarketer affiliates for IBM products. This agreement
provides that Sirius may not enter into any similar arrangement with any third
party for the purpose of selling IBM products to its end-user customers and also
provides a favorable pricing structure to Sirius. As a result, Sirius is
expected to remain our largest customer for the duration of this agreement and
to account for approximately the same percentage of our net sales in 1999 as it
represented in 1998. The agreement with Sirius expires on December 31, 2000, but
may be terminated earlier upon the happening of specified events. This agreement
may not be unilaterally terminated by either Savoir or Sirius. Any disruption,
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change or termination of our relationship with Sirius or a reduction in Sirius's
purchases from us could have a material adverse effect upon our business,
financial condition and results of operations.
INTEGRATION OF ACQUIRED COMPANIES AND OUR BUSINESS MAY NOT BE SUCCESSFUL
Since December 1994, we have completed twelve acquisitions. The combination
of our business and acquired businesses requires, among other things:
o integration of the respective management teams and sales and other
personnel;
o coordination of sales and marketing efforts;
o conversion of computer systems (including inventory control, order
entry and financial reporting); and
o integration of the businesses' products and physical facilities.
The difficulties of such integration may be increased by the necessity of
coordinating geographically separate organizations. The integration of
operations will require the dedication of management resources which may
temporarily divert attention away from the day-to-day business of the combined
company. We cannot assure you that the required coordination and integration
will be accomplished smoothly or successfully. Our inability to integrate
successfully the operations of acquired businesses could have a material adverse
effect on our business, financial condition and results of operations. In
addition, during the integration phase, aggressive competitors may attempt to
attract our customers and recruit our key employees. We cannot assure you that
acquisitions will not materially and adversely affect the selling patterns of
vendors and the buying patterns of our present and potential customers, and that
any change in these patterns will not materially and adversely affect our
business, financial condition and results of operations.
Our ability to achieve the anticipated benefits of our acquisitions depends
in part upon whether the integration of our business and any acquired business
is accomplished in an efficient and effective manner, and we cannot assure you
that this will occur. Our previous acquisitions and investments have placed and
will, together with future acquisitions, continue to place, substantial demands
on our management team and financial resources. The integration of the
operations of acquired companies has on occasion been slower, more complex and
more costly than we originally anticipated. We will encounter similar
uncertainties and risks in any future acquisitions and investments. Although we
expect to realize cost savings and sales enhancements as a result of the recent
and proposed acquisitions, we cannot assure you that these savings or
enhancements will be realized in full or when anticipated, or that any cost
savings will not be offset by increases in other expenses.
WE MAY NOT BE ABLE TO COMPLETE THE FUTURE ACQUISITIONS AND EXPANSION THAT WE
BELIEVE ARE IMPORTANT TO THE GROWTH OF OUR BUSINESS
Acquisitions have played an important role in the implementation of our
business strategy, and we believe that additional acquisitions are important to
our growth, development and continued ability to compete effectively in the
marketplace. We evaluate potential acquisitions and strategic investments on an
ongoing basis. We cannot assure you as to our ability to compete successfully
for available acquisition or investment candidates or to complete future
acquisitions and investments or as to the financial effect on us of any acquired
businesses or equity investments. Any future acquisitions and investments we
might make may involve significant cash expenditures and may result in increased
indebtedness, interest and amortization expense or decreased operating income,
any of which could have a material adverse effect on our business, financial
condition and results of operations. In addition, future growth will require
additional financing to fund the working capital requirements of our business
and to finance future acquisitions and strategic equity investments, if any. We
cannot assure you that we will be able to raise financing on satisfactory terms
and conditions, if at all. Should we be unable to implement successfully our
acquisition and investment strategy, our business, financial condition and
results of operations could be materially and adversely affected.
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WE MAY HAVE DIFFICULTY IN MANAGING OUR GROWTH
Since 1997, we have experienced significant growth in the number of our
employees and in the scope of our operating and financial systems, resulting in
increased responsibilities for our management. To manage future growth
effectively, we will need to continue to improve our operational, financial and
management information systems, procedures and controls and expand, train,
motivate, retain and manage our employee base. We cannot assure you that we will
be successful in managing any future expansion or identifying, attracting and
retaining key personnel, and failure to do so could have a material adverse
effect on our business, financial condition and results of operations.
WE ARE DEPENDENT ON KEY PERSONNEL
Our future success depends in part on the continued service of our key
management, technical, sales and marketing personnel and our ability to identify
and hire additional personnel. Competition for qualified management, technical,
sales and marketing personnel is intense and we cannot assure you that we can
retain and recruit adequate personnel to operate our business. Our success is
largely dependent on the skills, experience and efforts of our key personnel,
particularly P. Scott Munro, Chairman of the Board, President, Chief Executive
Officer and Secretary, and Carlton Joseph Mertens, II, Chief Executive Officer
and President of our subsidiary, Business Partner Solutions, Inc., each of whom
has entered into an employment agreement with us. The loss of either of these
individuals or other key personnel could have a material adverse effect on our
business, financial condition and results of operations. We maintain life
insurance on Mr. Munro and Mr. Mertens in the amounts of $7.9 million and $10.0
million, respectively.
WE HAVE SIGNIFICANT FUTURE CAPITAL NEEDS, AND THE AVAILABILITY OF ADDITIONAL
FINANCING IS UNCERTAIN
Our operations to date have required substantial amounts of working capital
to finance accounts receivable and product inventories. Although we believe that
we have sufficient funds, or alternate sources of funds, to carry on our
business as presently conducted through 1999, we will need to raise additional
amounts through public or private debt or equity financings in order to achieve
the growth contemplated by our business plan. We cannot assure you that
additional financing of any type will be available on acceptable terms, or at
all, and failure to obtain such financing could have a material adverse effect
upon our business, financial condition and results of operations.
WE ARE DEPENDENT UPON THE AVAILABILITY OF CREDIT AND OUR PRESENT CREDIT FACILITY
In order to obtain necessary working capital, we rely primarily on a line of
credit that is collateralized by substantially all of our assets. The amount of
credit available to us may be adversely affected by numerous factors beyond our
control, such as:
o delays in collection or deterioration in the quality of our accounts
receivable;
o economic trends in the technology industry;
o the obsolescence of our inventory;
o interest rate fluctuations; and
o the lending policies of our creditors.
Any decrease or material limitation on the amount of capital available to us
under our line of credit or other financing arrangements will limit our ability
to fill existing sales orders or expand our sales levels and, therefore, would
have a material adverse effect on our business, financial condition and results
of operations. In addition, any significant increase in interest rates will
increase our cost of financing and could have a material adverse effect on our
business, financial condition and results of operations. We are dependent on the
availability of
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accounts receivable financing on reasonable terms and at levels that are high
relative to our equity base in order to maintain and increase our sales. We
cannot assure you that such financing will continue to be available to us or
available under terms acceptable to us. Our inability to have continuous access
to such financing at reasonable costs would materially and adversely impact our
business, financial condition, results of operations and cash flows.
We have primarily funded our working capital requirements through a $125.0
million Inventory and Working Capital Agreement with IBM Credit Corporation.
Borrowings under this credit facility are collateralized by substantially all of
our assets, including accounts receivable, inventories and equipment. This
credit facility provides that the outstanding interest-bearing cash advance
balance is subject to interest at the annual rate of prime plus 1.875% (9.625%
at March 31, 1999) and expires on August 31, 2000. IBM Credit Corporation may
terminate this credit facility at any time upon the occurrence of, and
subsequent failure to cure, an "Event of Default" (as that term is defined in
the documentation for the credit facility). In the event of termination, the
outstanding borrowings under the credit facility become immediately due and
payable. The termination of this credit facility and our subsequent inability to
secure a replacement credit facility on terms and conditions no less favorable
than those contained in our present credit facility would have a material
adverse effect on our business, financial condition and results of operations.
OUR PRESENT CREDIT FACILITY LIMITS OUR ABILITY TO INCUR ADDITIONAL INDEBTEDNESS
The terms of our credit facility with IBM Credit Corporation require that we
obtain the consent of IBM Credit Corporation prior to incurring some types of
additional indebtedness, including any additional senior or subordinated debt.
We may incur additional indebtedness without IBM's consent through capital
leases and general business commitments if the terms are commercially reasonable
and consistent with our prior business practices. Our present credit facility
and our anticipated cash flows may not provide funding sufficient to achieve the
growth contemplated by our business plan. We may therefore need to obtain the
consent of IBM Credit Corporation to incur additional indebtedness. While we
have no reason to believe that IBM will not so consent, we cannot assure you
that IBM Credit Corporation will give its consent. Failure to obtain IBM's
consent or to obtain an alternate credit facility could have a material adverse
effect on our business, financial condition and results of operations.
OUR BUSINESS IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE, PRICE REDUCTIONS AND
INVENTORY RISK
Since we acquire inventory in advance of product orders and shipments, there
is a risk that we will forecast incorrectly and stock excessive or insufficient
inventory of particular products. The markets for products that we sell are
extremely competitive and are characterized by declining selling prices over the
life of a particular product and rapid technological change. Therefore, our
business, like that of other wholesale distributors, is subject to the risk that
the value of our inventory will decline as a result of price reductions by
manufacturers or due to technological changes affecting the usefulness or
desirability of our product inventory. It is the policy of many manufacturers of
technology products to protect wholesale distributors such as Savoir from the
loss in value of inventory due to technological change or reductions in the
manufacturers' prices. Under the terms of most of our distribution agreements,
vendors will generally credit us for inventory losses resulting from the
vendor's price reductions if we comply with the conditions set forth in those
agreements. In addition, generally under such agreements, we have the right to
return for credit or exchange for other products a portion of our slow moving or
obsolete inventory items within designated periods of time. We cannot assure you
that, in every instance, we will be able to comply with all necessary conditions
or manage successfully our price protection or stock rotation opportunities, if
available. Also, a manufacturer that elects to terminate a distribution
agreement generally will repurchase its products carried in a wholesale
distributor's inventory. These industry practices are sometimes not included in
written agreements and do not protect us in all cases from declines in inventory
value, excess inventory or product obsolescence. We cannot assure you that
manufacturers will continue these protective practices or that we will be able
to manage successfully our existing and future inventories. Historically, we
have not experienced losses due to obsolete inventory in excess of established
inventory reserves. Significant declines in inventory value in excess of
established inventory reserves or dramatic changes
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in prevailing technology could have a material adverse effect on our business,
financial condition and results of operations.
IBM and some of the other major systems vendors have developed programs that
allow us to assemble systems from components provided by the vendors. While we
have developed the ability to integrate and configure computer products, the
process of assembling large volumes of systems from components will require us
to implement new business practices. It is uncertain how the vendors will apply
policies related to price protection, stock rotation and other protections
against the decline in inventory value of system components acquired for a
system assembly program. We cannot assure you that we will be successful in the
integration and configuration of computer products or that our vendors will
apply price protection and stock rotation policies to our component inventories
devoted to these programs.
OUR BUSINESS HAS LOW PROFIT MARGINS
As a result of price competition, we have low gross profit and operating
income margins. These low margins magnify the impact on operating results of
variations in net sales and operating costs. We have partially offset the
effects of our low gross profit margins by increasing net sales, availing
ourself of large volume purchase discount opportunities and reducing selling,
general and administrative expenses as a percentage of net sales. However, we
cannot assure you that we will maintain or increase net sales, continue to avail
ourselves of large volume purchase discount opportunities or further reduce
selling, general and administrative expenses as a percentage of net sales.
Future gross profit margins may be materially and adversely affected by changes
in product mix, vendor pricing actions and competitive and economic pressures.
WE MAY EXPERIENCE PRODUCT SUPPLY SHORTAGES
We are dependent upon the supply of products available from our vendors.
From time to time, the industry has experienced shortages of some of the
products that we distribute due to vendors' difficulty in projecting demand.
When product shortages occur, we typically receive an allocation of product from
the vendor. We cannot assure you that our vendors will be able to maintain an
adequate supply of products to fulfill all of our orders on a timely basis. If
we fail to obtain adequate product supplies, or if product supplies are
available to competitors but not to us, it would have a material adverse effect
on our business, financial condition and results of operations.
WE EXTEND CREDIT TO CUSTOMERS WITHOUT REQUIRING COLLATERAL
We sell products to a broad geographic and demographic base of customers and
offer unsecured credit terms to our customers. Sirius accounted for
approximately 20% of our outstanding accounts receivable at March 31, 1999. No
other single customer accounted for more than 5% of our outstanding accounts
receivable at March 31, 1999. To reduce our credit risk, we perform ongoing
credit evaluations of our customers, maintain an allowance for doubtful accounts
and have credit insurance. Historically, we have not experienced losses from
write-offs in excess of established reserves. Should our customers increase the
rate at which they default on payments due to us, and should we be unable to
collect our accounts receivable at a rate consistent with our present
experience, it could have a material adverse effect on our business, financial
condition and results of operations.
OUR BUSINESS IS SEASONAL
The computer distribution industry experiences seasonal trends and, within
each quarter, a substantial amount of product is generally sold in the last few
days of the quarter. Our largest vendor, IBM, sells 35-40% of its products in
the last calendar quarter, and the continuation of this pattern could have an
effect on our quarterly net sales. Historically, a substantial portion of our
net sales has been made in the last few days of a quarter. Due to our recent
significant growth through acquisitions and our increased dependence on the sale
of IBM products, sales variations may be magnified in the future and could have
a material adverse effect on our business, financial condition and results of
operations.
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OUR ABILITY TO EXPAND OUR SERVICE CAPABILITIES IS UNCERTAIN
We are expanding the nature and scope of our value-added services. We cannot
assure you that new value-added services will be integrated successfully with
our commercial mid-range server and related products distribution business. If
we are unable to provide value-added services effectively, we may be unable to
compete for the business of customers that demand services as a condition to
purchasing products from us. In addition, we will be subject to risks commonly
associated with a value-added services business, including dependence on
reputation, fluctuations in workload and dependence on the ability to identify,
recruit and retain qualified technical personnel. The expansion of our
value-added services is expected to require a significant capital investment,
including an increase in the number of technical employees. We cannot assure you
that difficulties encountered in connection with the expansion of our
value-added services will not have a material adverse effect on our business,
financial condition and results of operations.
WE ARE DEPENDENT ON THIRD-PARTY SHIPPERS
We presently ship a majority of our products from our warehouses via Federal
Express Corporation, but we also ship via United Parcel Service of America, Inc.
and other common carriers. In addition, we sometimes drop-ship products from our
vendors directly to our customers via these carriers. Changes in shipping terms
or the inability of Federal Express, United Parcel Service or any other
third-party shipper to perform effectively (whether as a result of mechanical
failure, casualty loss, labor stoppage, other disruption or any other reason)
could have a material adverse effect on our business, financial condition and
results of operations. We cannot assure you that we can maintain favorable
shipping terms or replace our present shipping services on a timely or
cost-effective basis.
OUR PLANNED INTERNATIONAL EXPANSION MAY NOT BE SUCCESSFUL
One of the elements of our business strategy is to expand internationally.
We have recently begun to distribute IBM's AS/400 products in Canada. We cannot
assure you that we will be able to expand our international business
successfully. Risks inherent in doing business on an international level
include:
o management of remote operations;
o unexpected changes in regulatory requirements;
o export restrictions;
o tariffs and other trade barriers;
o difficulties in staffing and managing foreign operations;
o longer payment cycles;
o problems in collecting accounts receivable;
o political instability;
o fluctuations in currency exchange rates; and
o potentially adverse tax consequences.
Any of these risks could adversely impact the success of our international
operations. We cannot assure you that difficulties encountered with one or more
of these factors will not have a material adverse effect on our future
international operations and, consequently, on our business, financial condition
and results of operations.
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WE ARE SUBJECT TO YEAR 2000 UNCERTAINTIES
Many presently-installed computer systems and software products are coded to
accept only two-digit entries in the date code year field. This date code field
will need to distinguish 21st century dates from 20th century dates. Systems
that do not properly recognize date information could generate erroneous data or
cause a system to fail. We are in the process of conducting a Year 2000
compliance audit. The Year 2000 issue creates risks for us from problems in our
own computer and embedded systems and from third parties, such as vendors and
customers, with whom we deal on financial and other transactions. Failure of our
and/or third parties' computer systems could have a material adverse effect upon
our ability to conduct our business.
We believe that our enterprise-wide business software system, which handles
our most critical functions, including finance, inventory control, warehousing,
shipping and receiving, logistics, purchasing, sales and order taking, is not
subject to the Year 2000 problem. If the system as a whole fails to work on
January 1, 2000 it could prevent us from controlling our inventory, taking
orders, buying inventory and billing our customers. We are presently also
inventorying and analyzing our remaining centralized computer and embedded
systems, as well as our network data services, network hardware, networking
equipment, voice-mail equipment and access and alarm systems, to identify any
potential Year 2000 issues. We currently expect to complete substantially the
remediation and validation of our internal systems, as well as to develop
contingency plans, by the third quarter of 1999.
As part of our Year 2000 audit, we are contacting our critical suppliers,
manufacturers, distributors and other vendors to determine if their operations
and the products and services that they provide to us are Year 2000 compliant.
However, we cannot assure you that we will identify all Year 2000 problems in
the products or computer systems of our vendors in advance of their occurrence
or that our vendors will be able to successfully rectify any problems that are
discovered. Absent written assurances of Year 2000 compliance by these third
parties, we will assume non-compliance and will attempt to mitigate our risks
with respect to these third parties by developing contingency plans. However, we
cannot assure you that we can implement contingency plans in all instances or
that our contingency plans will adequately serve the needs of our customers and
other constituents.
The estimated total cash expenditures required for the Year 2000 project are
approximately $1.5 million, although it is possible that as we continue our
audit and detect problems that are not currently known to us, additional
expenditures may be incurred, which could be substantial. The total expense
associated with our Year 2000 audit and required modifications to become Year
2000 compliant is not presently expected to be material to our business,
financial condition and results of operations.
The failure to correct a material Year 2000 problem could result in an
interruption in, or failure of, certain normal business activities or
operations. Any failure could materially and adversely affect our business,
financial condition and results of operations. Due to the uncertainty inherent
in the Year 2000 problem, resulting in part from the unknown state of Year 2000
readiness of third-party suppliers and customers, we are presently unable to
determine whether we will be affected by any Year 2000 failures or whether any
failure we experience will have a material adverse effect on our business,
financial condition and results of operations.
WE HAVE NOT PAID AND DO NOT PRESENTLY INTEND TO PAY CASH DIVIDENDS ON SAVOIR
COMMON STOCK
We have never declared or paid a cash dividend on our common stock. We
currently anticipate that we will retain all available funds for use in the
operation of our business, including possible acquisitions, and we do not intend
to pay any cash dividends in the foreseeable future. The payment of any future
dividends will be at the discretion of our Board of Directors and will depend
upon, among other factors:
o future earnings and cash flow;
o operations;
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<PAGE>
o capital requirements;
o acquisitions and strategic investment opportunities;
o our general financial condition; and
o general business conditions.
Further, our ability to pay cash dividends is currently restricted by the terms
of our credit facility with IBM Credit Corporation and the terms of the
agreement by which we acquired Business Partner Solutions. The terms of future
credit facilities or other agreements may also contain similar restrictions. In
addition, our Certificate of Designation with respect to the Series A Preferred
Stock prohibits the payment of dividends on our common stock unless and until
dividends are paid on the Series A Preferred Stock in accordance with its terms.
IF WE ISSUE STOCK IN CONNECTION WITH FUTURE ACQUISITIONS, IT MAY RESULT IN
DILUTION TO EXISTING STOCKHOLDERS
In connection with acquisitions that we have completed, we expect to issue
up to approximately 340,000 additional shares of our common stock based on the
attainment of performance goals by the acquired businesses. In addition, we may
issue additional shares of our common stock or other equity or convertible debt
securities to effect future acquisitions or for other corporate purposes. Upon
the issuance of additional capital stock, the percentage ownership of our
stockholders will be reduced and stockholders may experience additional
dilution.
OUR STOCK PRICE HAS BEEN VOLATILE HISTORICALLY
The market price of our common stock has been and is likely to continue to
be highly volatile and may be significantly affected by factors such as:
o actual or anticipated fluctuations in our quarterly operating results;
o announcements of technological innovations;
o industry conditions and trends;
o changes in or our failure to meet the expectations of securities
analysts and investors; and
o general market conditions and other factors.
It is possible that in some future quarter, our operating results may be below
the expectations of securities analysts and investors. If this occurs, the price
of our common stock would likely decline, perhaps substantially. In addition,
the stock market has from time to time experienced significant price and volume
fluctuations that have particularly affected the market prices of the stocks of
technology companies. These broad market fluctuations may adversely affect the
market price of our common stock. In the past, following periods of volatility
in the market price of a particular company's securities, securities class
action litigation has often been brought. We cannot assure you that similar
litigation will not occur in the future with respect to us and our securities.
Any litigation relating to our securities could result in substantial costs and
a diversion of management's attention and resources, which could have a material
adverse effect upon our business, financial condition and results of operations.
PROVISIONS OF OUR CHARTER AND BYLAWS AND DELAWARE LAW MAY MAKE SAVOIR A LESS
ATTRACTIVE ACQUISITION CANDIDATE
Provisions of our Certificate of Incorporation and of our Bylaws may make it
more difficult for a third party to acquire, or may discourage a third party
from attempting to acquire, control of Savoir. These provisions could limit the
price that investors may be willing to pay for shares of our common stock. We
presently have
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<PAGE>
1,986,500 shares of Series A Preferred Stock and 10 shares of Series B Preferred
Stock outstanding and, without any further vote or action by the stockholders,
have the authority to issue up to an additional 8,013,490 shares of preferred
stock and to determine the price, rights, preferences, qualifications,
limitations and restrictions, including voting rights, of this additional
preferred stock. The issuance of additional preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could delay or prevent a third party from acquiring a
majority of our outstanding voting stock. Further, Section 203 of the General
Corporation Law of Delaware prohibits us from engaging in various types of
business combinations with interested stockholders. These provisions may delay
or prevent a change in control of Savoir without action by the stockholders, and
therefore could adversely affect the market price of our common stock.
PROCEEDS FROM THE OFFERING
Savoir will not receive any proceeds from the sale of the shares by the
selling stockholders. All proceeds from the sale of the shares will be for the
account of the selling stockholders.
INCOME TAX CONSIDERATIONS
Each prospective purchaser should consult his or her own tax advisor with
respect to the income tax issues and consequences of holding and disposing of
Savoir common stock.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information as of April 1, 1999
regarding the beneficial ownership of Savoir common stock by each of the selling
stockholders and the shares offered by this prospectus by those persons.
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares Beneficially Owned
Prior to Offering(1) Number of After Offering(1)
------------------------- Shares Being -------------------------
Number Percent(2) Offered Number Percent(2)
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Hymie Akst.............................. 1,268 * 1,268 -- *
Joan F. Albrecht........................ 1,352 * 1,352 -- *
Neil T. Anderson........................ 106,742 * 106,742 -- *
Chaim I. Anfang......................... 1,352 * 1,352 -- *
Argonaut Investors Fund Ltd............. 6,440 * 6,440 -- *
Argonaut Partnership, L.P............... 11,952 * 11,952 -- *
Astoria Capital Partners L.P.(3)........ 1,207,522 10.08 441,922 765,600 6.39
Ballina Trading Services Limited........ 2,818 * 2,818 -- *
Daniel M. Bogard Revocable Trust........ 3,793 * 3,793 -- *
Richard M. Brooks....................... 2,818 * 2,818 -- *
Michael E. Bushey and Martha L.
Bushey............................... 1,303 * 1,303 -- *
Canpartners Investments IV, LLC(4)...... 534,917 4.39 534,917 -- *
Central Fill Pharmacy, Inc.............. 2,438 * 2,438 -- *
Brian M. Chait.......................... 1,303 * 1,303 -- *
Phyllis J. Cohen........................ 1,689 * 1,689 -- *
Commonwealth Life Ins. Co.
(Teamsters - Cambden)................. 149,440 1.25 149,440 -- *
Irving Davies........................... 1,352 * 1,352 -- *
Abraham Debbi........................... 2,818 * 2,818 -- *
Jack Diener Living Trust................ 1,689 * 1,689 -- *
Duck Partners, L.P.(5).................. 18,035 * 18,035 -- *
Burton I. Epstein and Elaine G.
Epstein............................... 3,414 * 3,414 -- *
Fahnestock & Co. Inc.................... 90,453 * 90,453 -- *
Dr. Edward R. Falkner Inc. Profit
Sharing TR DTD 2-1970................. 1,307 * 1,307 -- *
S. Marcus Finkle........................ 10,000 * 10,000 -- *
Fleming American Investment Trust....... 277,058 2.31 231,838 45,220 *
Gerstenhaber Investors L.P.............. 2,559 * 2,559 -- *
Dennis A. Gleicher...................... 3,414 * 3,414 -- *
Gruber & McBaine International.......... 84,157 * 24,157 60,000 *
Michael N. Gunnells (6)................. 1,106,587 9.32 1,106,587 -- *
John M. Harkins (6)..................... 1,121,587 9.44 1,121,587 -- *
Larry Horn.............................. 7,697 * 7,697 -- *
J.M. Hull Associates, L.P.(5)........... 35,731 * 35,731 -- *
Hull Overseas, Ltd.(5).................. 35,550 * 35,550 -- *
IBM Credit Corporation.................. 100,000 * 100,000 -- *
JMG Capital Partners L.P................ 218,210 1.83 218,210 -- *
KA Investments LDC...................... 91,199 * 91,199 -- *
David J. Katz........................... 1,352 * 1,352 -- *
Ivan Kaufman............................ 32,020 * 32,020 -- *
Kodiak Opportunity, L.P.(7)............. 86,191 * 86,191 -- *
Kodiak Opportunity Offshore, Ltd.(7).... 71,145 * 71,145 -- *
Marvin Kogod & Muriel Kogod............. 1,307 * 1,307 -- *
Lagunitas Partners, L.P................. 239,123 2.01 81,123 158,000 1.33
Avy Lahav and Vered S. Lahav............ 1,303 * 1,303 -- *
Janet Lehr.............................. 5,121 * 5,121 -- *
Moshe Levy.............................. 42,983 * 42,983 -- *
Hanka Lew............................... 4,510 * 4,510 -- *
Lew Lieberbaum & Co., Inc............... 21,672 * 21,672 -- *
Sheldon Lieberbaum...................... 2,818 * 2,818 -- *
Richard A. Lippe........................ 23,018 * 23,018 -- *
William Lippe........................... 10,671 * 10,671 -- *
Marc Loveman, IRA....................... 1,303 * 1,303 -- *
Michael G. Lucci........................ 1,393 * 1,393 -- *
Arthur Luxenberg........................ 8,683 * 8,683 -- *
Irwin Luxemberg and Michael
Luxemberg............................. 1,352 * 1,352 -- *
MDA Financial, Inc...................... 2,172 * 2,172 -- *
Virginia Meade Trust.................... 1,122 * 1,122 -- *
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares Beneficially Owned
Prior to Offering(1) Number of After Offering(1)
------------------------- Shares Being -------------------------
Number Percent(2) Offered Number Percent(2)
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Carlton Joseph Mertens, II(8)........... 460,000 3.87 460,000 -- *
Beno Michel, M.D. Trust................. 1,200 * 1,200 -- *
Microcap Partners, L.P.(9).............. 60,520 * 32,020 28,500 *
Microcap Partners Limited Partnership
(Astoria)(3).......................... 314,891 2.64 219,891 95,000 *
Millennium Trading Co., LP.............. 1,120 * 1,120 -- *
Gee Gee Morgan.......................... 1,085 * 1,085 -- *
NAV LLC(9).............................. 67,346 * 21,346 46,000 *
James M. Persky......................... 1,159 * 1,159 -- *
Pleiades Investment Partners, L.P.(9)... 91,120 * 32,020 59,100 *
Puck Trading Limited.................... 2,715 * 2,715 -- *
R Capital II, Ltd.(10).................. 130 * 130 -- *
R&J Trust Dtd 7-1-93.................... 1,348 * 1,348 -- *
Gerald Richter IRA...................... 29 * 29 -- *
Robert Fleming & Co..................... 532,931 4.42 457,971 74,960 *
Robert Fleming Inc...................... 111,164 * 87,524 23,640 *
Francine Rodin.......................... 1,125 * 1,125 -- *
ROI Offshore Fund Ltd.(9)............... 231,002 1.94 120,802 110,200 *
ROI Partners, L.P.(9)................... 452,988 3.80 213,488 239,500 2.01
Robert Rosin............................ 1,204 * 1,204 -- *
Corey K. Ruth........................... 5,121 * 5,121 -- *
Jay Salomon and Bernice Salomon......... 268 * 268 -- *
Esther Schachner TTEE U/A DTD:
11/2/95............................... 1,303 * 1,303 -- *
Harry Schwartz.......................... 8,963 * 8,963 -- *
Mark Schwartz IRA....................... 6,829 * 6,829 -- *
Scott's Cove Special Credits
Fund I L.P............................ 82,581 * 32,081 50,500 *
Scott's Cove Special Credits Master
Fund Inc.............................. 167,117 1.40 92,137 74,980 *
Beverly Segal........................... 2,500 * 2,500 -- *
Seneca Capital International Ltd........ 1,417 * 1,417 -- *
Seneca Capital L.P...................... 2,126 * 2,126 -- *
E. Donald Shapiro....................... 2,745 * 2,745 -- *
Sidelmar Partnership(11)................ 1,348 * 1,348 -- *
Irwin Simon............................. 1,307 * 1,307 -- *
SoundShore Partners L.P................. 21,346 * 21,346 -- *
Strome Hedgecap Limited(12)............. 74,404 * 62,313 12,091 *
Strome Offshore Limited(12)............. 309,445 2.59 252,760 56,685 *
Strome Partners, L.P.(12)............... 220,574 1.85 215,949 4,625 *
Strome, Susskind Hedgecap Fund,
L.P.(12).............................. 347,685 2.91 264,969 82,716 *
Bruce Toll.............................. 21,346 * 21,346 -- *
Triton Capital Investments Ltd.......... 26,520 * 26,520 -- *
Wesley T. Wood.......................... 1,303 * 1,303 -- *
</TABLE>
- -------------
* Less than 1%.
(1) Information with respect to beneficial ownership is based upon information
obtained from the selling stockholders and from our transfer agent. Unless
otherwise indicated, the persons and entities named in the table have sole
voting and sole investment power with respect to all shares beneficially
owned, subject to community property laws, where applicable. Shares of our
common stock receivable upon conversion of Series A Preferred Stock or
upon exercise of warrants that are currently exercisable or exercisable
within 60 days of April 1, 1999 are deemed to be outstanding and to be
beneficially owned by the person presently entitled to exercise the right
of conversion or exercise for the purpose of computing the percentage
ownership of such person but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.
(2) Based on 11,877,315 shares of our common stock outstanding as of April 1,
1999.
(3) A limited partnership controlled by Richard Koe. Mr. Koe disclaims
beneficial ownership of these shares.
(4) These shares are beneficially owned by Joshua S. Friedman, Mitchell R.
Julis and R. Christian B. Evensen.
(5) These shares are beneficially owned by J. Mitchell Hull.
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<PAGE>
(6) Mr. Gunnells is Vice President of S-390 Sales and Marketing of Savoir. Mr.
Gunnells and Mr. Harkins received their respective shares as partial
consideration for the sale of MCBA Systems, Inc., of which they were the
sole shareholders, to Savoir in June 1998.
(7) These shares are beneficially owned by Lee E. Mickles and Mark R. Miller.
(8) Mr. Mertens is a director of Savoir, and is President of Business Partner
Solutions, Inc., a wholly-owned subsidiary of Savoir. Savoir acquired
Business Partner Solutions, Inc. (then named Star Management Services,
Inc.) in September 1997 and Mr. Mertens received these shares in partial
consideration for the sale to Savoir of his equity in Star Management
Services, Inc. Prior to its acquisition, Mr. Mertens was Executive Vice
President of Star Management Services, Inc.
(9) A limited partnership controlled by Mitchell Soboleski and Mark Boyer.
Messrs. Soboleski and Boyer disclaim beneficial ownership of these shares.
(10) A limited partnership controlled by Robert P. Saccogna. Mr. Saccogna
disclaims beneficial ownership of these shares.
(11) A partnership controlled by Sidney Dworkin, who is the beneficial owner of
these shares.
(12) A limited partnership controlled by Strome Susskind Investment Management,
L.P., of which SSCO, Inc. is the sole general partner. The Mark E. Strome
Living Trust is the controlling shareholder of SSCO, and Mark E. Strome is
the settlor and a trustee of the Trust.
Because a selling stockholder may offer by this prospectus all or some part
of the common stock which he or she holds, no estimate can be given as of the
date hereof as to the amount of common stock actually to be offered for sale by
a selling stockholder or as to the amount of common stock that will be held by a
selling stockholder upon the termination of such offering.
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<PAGE>
PLAN OF DISTRIBUTION
The shares covered 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 donees, pledgees, transferees or other
successors-in-interest selling shares received from a named selling stockholder
as a gift, partnership distribution, or other non-sale-related transfer after
the date of this prospectus. The selling stockholders will act independently of
Savoir in making decisions with respect to the timing, manner and size of each
sale. Sales of the shares may be effected by or for the account of the selling
stockholders in transactions on the Nasdaq National Market, the over-the-counter
market, or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices,
or in negotiated transactions. The shares may be sold by means of one or more of
the following methods:
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by that
broker-dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions in which the broker solicits
purchasers;
o in connection with short sales, in which the shares are redelivered to
close out short positions;
o in connection with the loan or pledge of shares covered by this
prospectus to a broker-dealer, and the sale of the shares so loaned or
the sale of the shares so pledged upon a default;
o in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions
in standardized or over-the-counter options;
o privately negotiated transactions; or
o in a combination of any of the above methods.
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate in resales. Broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders or from the purchasers of the shares or from both. This
compensation may exceed customary commissions.
The selling stockholders and any broker-dealers, agents or underwriters that
participate with the selling stockholders in the distribution of the shares may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933.
Any commissions paid or any discounts or concessions allowed to any of those
persons, and any profits received on the resale of the shares purchased by them,
may be deemed to be underwriting commissions or discounts under the Securities
Act of 1933.
Savoir has agreed to bear all expenses of registration of the shares (other
than fees and expenses, if any, of counsel or other advisors to the selling
stockholders). Any commissions, discounts, concessions or other fees, if any,
payable to broker-dealers in connection with any sale of the shares will be
borne by the selling stockholders selling those shares.
17
<PAGE>
LEGAL MATTERS
Certain matters with respect to the legality of the securities offered by
this prospectus will be passed upon for Savoir by Pillsbury Madison & Sutro LLP,
2550 Hanover Street, Palo Alto, California.
EXPERTS
The consolidated balance sheets of Savoir as of December 31, 1997 and 1998,
and the consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1998,
incorporated by reference in this prospectus, have been incorporated herein in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the Securities and Exchange Commission. You may read and copy
any materials we file with the Commission at the Commission's public reference
room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
Commission at 1-800-SEC-0330 for more information on its public reference rooms.
The Commission also maintains an Internet website at WWW.SEC.GOV that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission.
We have filed with the Commission four registration statements (which
contain this prospectus) on Form S-3 under the Securities Act of 1933. The
registration statements relate to the common stock offered by the selling
stockholders. This prospectus does not contain all of the information set forth
in the registration statements and the exhibits and schedules to the
registration statements. Please refer to the registration statements and their
exhibits and schedules for further information with respect to Savoir and the
common stock. Statements contained in this prospectus as to the contents of any
contract or other document are not necessarily complete and, in each instance,
we refer you to the copy of that contract or document filed as an exhibit to the
registration statements. You may read and obtain a copy of the registration
statements and their exhibits and schedules from the Commission, as described in
the preceding paragraph.
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this prospectus, and later information that we file
with the Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the Commission under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act or 1934 until this offering is completed. The documents
we incorporate by reference are:
o Our Annual Report on Form 10-K, as amended, for the fiscal year ended
December 31, 1998;
o Our Quarterly Report on Form 10-Q, for the quarter ended March 31,
1999; and
o The description of the our capital stock contained in our registration
statement on Form S-2 (Registration Statement No. 333-47965),
including any amendments and reports filed for the purpose of updating
such description.
18
<PAGE>
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and number:
Savoir Technology Group, Inc.
254 East Hacienda Avenue
Campbell, California 95008
Attn: Secretary
Telephone: (408) 379-0177
19
