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As filed with the Securities and Exchange Commission on June 23, 1997
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INTELLICORP, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 94-2756073
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
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1975 EL CAMINO REAL WEST, MOUNTAIN VIEW, CALIFORNIA 94040-2216
(415) 965-5500
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
KENNETH H. HAAS
1975 EL CAMINO REAL WEST
MOUNTAIN VIEW, CALIFORNIA 94040-2216
(415) 965-5500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH COPIES OF ALL ORDERS, NOTICES AND COMMUNICATIONS TO:
RICHARD A. PEERS
HELLER, EHRMAN, WHITE & MCAULIFFE
525 UNIVERSITY AVENUE
PALO ALTO, CALIFORNIA 94301-1908
TELEPHONE: (415) 324-7000
FACSIMILE: (415) 324-0638
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
--------------
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 being
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [x]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier 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 number of the earlier registration statement for
the same offering. [ ] __________
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SECURITY OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.001 2,748,000 $2.97(1) $8,161,560(1) $2,473
==========================================================================================================================
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(1) Estimated solely for the purpose of computing the amount of
registration fee pursuant to Rule 457(c) under the Securities Act of
1933, as amended, based on the average of the high and low prices
reported of the Registrant's Common Stock on the Nasdaq Stock Market
on June 19, 1997.
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PROSPECTUS
2,748,000 SHARES OF COMMON STOCK, ALL OF WHICH ARE OFFERED BY THE SELLING
STOCKHOLDERS
INTELLICORP, INC.
_____________
All of the 2,748,000 shares (the "Shares") of common stock, $.001 par
value, (the "Common Stock") of IntelliCorp, Inc. (the "Company" or
"IntelliCorp") covered by this prospectus (the "Prospectus") are being offered
by the holders of the Shares (collectively, the "Selling Stockholders") named
in this Prospectus. See "Selling Stockholders". The Company will not receive
any of the proceeds from the sale of the Shares by the Selling Stockholders.
Some or all of the Shares covered by this Prospectus may be offered
for sale from time to time by the Selling Stockholders at such prices and on
such terms as may then be obtainable, in negotiated transactions, or otherwise.
This Prospectus may be used by the Selling Stockholders or by any broker-dealer
who may participate in sales of the securities covered hereby. The Selling
Stockholders will pay all commissions, transfer taxes, and other expenses
associated with the sales of securities by them. The Company has paid the
expenses of the preparation of this Prospectus. The Company has agreed to
indemnify the Selling Stockholders against certain liabilities, including
liabilities arising under the Securities Act.
The Company's Common Stock is traded on the Nasdaq Stock Market under
the symbol "INAI". On June 19, 1997, the closing price for the Common Stock,
as reported on the Nasdaq Stock Market, was $3.00 per share.
IntelliCorp has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. As permitted by the rules and regulations of the Commission, this
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to IntelliCorp and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto, which
may be examined without charge at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies of which may be obtained from the Commission upon payment of
the prescribed fees. The Commission maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
commission, and the address of such site is http://www.sec.gov/.
____________
THESE ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH DEGREE OF RISK.
(SEE "RISK FACTORS" COMMENCING ON PAGE 3.)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
____________
The date of this Prospectus is ___________, 1997
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No person is authorized to give any information or to make any
representations or projections of future performance other than those contained
or incorporated by reference in this Prospectus and, if given or made, such
information, projections or representations must not be relied upon as having
been authorized. This Prospectus does not constitute an offer of any
securities other than those to which it relates or an offer to sell or
solicitation of an offer to buy to any person in any jurisdiction where such
offer would be unlawful. The delivery of this Prospectus or sale hereunder at
any time does not imply that the information herein is correct as of any time
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information may be
inspected at the public reference facilities of the Commission at Judiciary
Plaza, 450 Fifth Street, N. W., Washington, D.C. 20549. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at such address. Such reports, proxy statements and other
information can also be inspected at the Commission's regional offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and at 500 West
Madison, Chicago, Illinois 60661. The Commission maintains a World Wide Web
Site that contains reports, proxy and information statements and other
information regarding registrants, such as the Company, that file
electronically with the Commission, and the address of such site is
http://www/sec.gov/. The Common Stock of the Company is traded on the Nasdaq
Stock Market. Reports and other information concerning the Company may be
inspected at the National Association of Securities Dealers, Inc., 1735 K.
Street, N.W., Washington, D.C. 20006-1500.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
(i) the Company's annual report on Form 10-KSB for the fiscal year
ended June 30, 1996, and quarterly reports on Form 10-QSB for each of the
fiscal quarters ended September 30, 1996, December 31, 1996 and March 31, 1997,
each filed pursuant to Section 13(a) or 15(d) of the Exchange Act;
(ii) all other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the annual report referred to in (i) above; and
(iii) the description of the Company's securities contained in its
Form 8-A Registration Statements filed pursuant to Section 12 of the Exchange
Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of securities hereunder shall be deemed to be
incorporated herein by reference and shall be a part hereof from the date of
the filing of such documents. Any statements contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or replaced for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
replaces such statement. Any such statement so modified or replaced shall not
be deemed, except as so modified or replaced, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of any document incorporated by reference in
this Prospectus, other than exhibits to such documents not specifically
incorporated by reference. Such requests should be directed to IntelliCorp,
Inc., 1975 El Camino Real West, Mountain View, California 94040, Attention:
Kenneth A. Czaja, Chief Financial Officer, Telephone: (415) 965-5500.
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RISK FACTORS
The information about the Company included or incorporated by
reference herein contains forward looking statements that involve risks and
uncertainties, including the risks detailed below. An investment in the
securities being offered hereby involves a high degree of risk. In addition to
the other information in this Prospectus, prospective investors should
carefully consider the following risk factors before purchasing the Shares.
NEED FOR ACCEPTANCE OF MODELING TECHNOLOGY AND COMPANY PRODUCTS
The market for the Company's products is new and evolving, and its
growth depends upon broader market acceptance of modeling technology, including
object-oriented technology. Modeling technologies represent fundamental shifts
in analysis, design and programming methodologies. They require substantial
investment in the retraining of programmers and business analysts, which can be
expensive and can reduce the productivity of programmers and analysts during
the training period. As a result, there can be no assurance that organizations
will choose to make the investment required to use modeling techniques in
planning their operations and for the enhancement of their businesses or their
clients' businesses.
Even if modeling technology gains broader market acceptance, there can
be no assurance that PowerModel and LiveModel, the Company's principal products
at this time, will be accepted for implementation of object-oriented and
modeling technology. PowerModel and LiveModel are both relatively new products
with limited market acceptance. In the case of the product market for
LiveModel: SAP R/3 Edition, it is unclear if this product's modeling approach
will be accepted as a solution to customers' SAP implementation problems, or if
the product will be used by customers who have previously installed SAP's R/3
software. In addition, even if PowerModel and LiveModel gain broader market
acceptance, a number of other vendors offer competing products. There are also
a number of other approaches to business and application modeling, including
the use of traditional CASE tools. See "Competition" below.
The Company has refocused its efforts on the SAP market and, in June
1996, LiveModel: SAP R/3 Edition was commercially released to address the need
for a modeling tool to assist companies who are implementing SAP's R/3 system.
As a result of refocusing a substantial portion of the Company's business on
the SAP market, increased acceptance of the Company's software products will
depend on continued market acceptance of SAP's R/3 system. In addition, sales
of the Company's SAP R/3 based products will depend on the acceptance and use
by consulting firms and others who assist their customers to implement the
complex R/3 system. There can be no assurance that the Company will be
successful in achieving and sustaining partnerships with third party packaged
system vendors or with strategic consulting firms. SAP has formed strategic
alliances with other companies to develop R/3 modeling/implementation software
packages and SAP itself offers products that include a subset of the
capabilities of IntelliCorp's products. While the Company believes that
LiveModel: SAP R/3 Edition offers advantages over competing products in this
market, there can be no assurance that the Company will be successful in
refocusing its business in the SAP R/3 market or that the Company's products
will successfully compete with others in this market.
The Company's fiscal 1997 and 1998 sales forecast anticipates a
significant portion of revenues to be derived from sales of and consulting
services related to LiveModel: SAP R/3 Edition. Factors which could impact
the level of revenues generated from LiveModel: SAP R/3 Edition include, but
are not limited to, the timing and level of market acceptance of the new
product, the timing of market introduction of competing products, the success
of providing consulting services and the success of sales efforts with
strategic partners. There can be no assurance, however, that the actual sales
will not differ materially from the sales forecast in the near term.
The Company has attempted to focus its PowerModel business on the
concurrent engineering market for manufacturing and design. However, there can
be no assurance that customers will accept the Company's product solutions once
the solutions are completed, that the Company will have the necessary expertise
for this market, or that the Company will obtain the right business
partnerships. In fact, the revenue related to the PowerModel business has been
declining during fiscal 1997.
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RAPID TECHNOLOGICAL CHANGE; PRODUCT DEVELOPMENT
The market for the Company's products is characterized by ongoing
technological developments, evolving industry standards, rapid changes in
customer requirements and increasing customer demands. As a result, the
Company's success depends upon its ability to continue to enhance its existing
products, develop and introduce in a timely manner new products that take
advantage of technological advances, and respond to new customer requirements
and demands. To the extent one or more of the Company's competitors introduce
products that fully address customer requirements, the Company's business could
be adversely affected. There can be no assurance that the Company will be
successful in developing and marketing enhancements to its existing products or
new products incorporating new technology on a timely basis, or that its new
products will adequately address the changing needs of the marketplace. If the
Company is unable to develop and introduce new products, or enhancements to
existing products, in a timely manner in response to changing market conditions
or customer requirements or demands, the Company's business and results of
operations will be materially and adversely affected. Versions of LiveModel
and PowerModel are currently available for use on the UNIX operating system.
UNIX enjoys relatively limited market acceptance at present and there can be no
assurance that market acceptance for UNIX will expand or will not decrease.
Additionally, sales of existing products on UNIX have declined substantially
and there can be no assurance that future sales of these products will not
continue to decline.
With the introduction of LiveModel: SAP R/3 Edition, the Company has
shifted its emphasis from UNIX systems to Windows and other Microsoft operating
systems. There can be no assurance that this shift from UNIX to Windows will
be successful or that the Company will achieve significant success of its
Windows-based products.
In addition, the Company and SAP AG have a joint development agreement
under which the utility of the IntelliCorp technology within the context of the
SAP R/3 system is being explored. There is no assurance that SAP or
IntelliCorp will continue to find the mutual development of interfacing
products to be in their mutual best interests or that SAP will not terminate
the partnership or change their products or strategies in a way that is adverse
to IntelliCorp. Even though IntelliCorp may wish to further its relationship
with SAP and its development of products, there can be no assurance that the
Company will be successful in doing so. Termination of its arrangement with
SAP could have a material adverse effect on the Company's financial results.
In addition, the Company relies on licenses from third parties, such as POET
and SAP, for some of its technology and product functionality.
Although the Company has a number of ongoing development projects,
there can be no assurance that the development of these products will be
completed successfully or on time, that the projects will include the features
required to achieve market acceptance, or that enhancements to the product will
keep pace with broadening market requirements. From time to time the Company
or its competitors may announce new products, capabilities or technologies that
have the potential to replace or shorten the life cycles of the Company's
existing products. There can be no assurance that announcements by the Company
or its competitors of currently planned or other new products will not cause
customers to defer purchasing existing Company products. The Company has in
the past experienced delays in software development, and there can be no
assurance that the Company will not experience further delays in connection
with its current product development or future development activities. Delays
or difficulties associated with new product introductions or product
enhancements could have a material adverse effect on the Company's results of
operations. Software products as complex as those offered by the Company may
contain undetected errors when first introduced or as new versions are
released. There can be no assurance that errors will not be found in new
products after commencement of commercial shipments, resulting in loss of or
delay in market acceptance. The Company maintains no insurance for this risk.
COMPETITION
The Company believes that its ability to compete depends on factors
both within and outside its control, including the timing and success of new
products developed by the Company and its competitors, product performance and
price, distribution and customer support. There can be no assurance that the
Company will be able to compete successfully with respect to these factors.
The market for IntelliCorp's software products is intensely
competitive and is characterized by rapid change and frequent introduction of
new products. The important competitive factors in the industry are generation
of and integration with standard runtime environments, access to standard
databases, ability to support the client/server paradigm, support
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for popular methodologies, product sophistication, features, reliability,
price/performance characteristics, ease of understanding and operating the
software, integration with conventional computing environments and the
internet, availability of the product on a variety of hardware platforms.
There can be no assurance that the Company will be successful in the face of
increasing competition from new products and enhancements introduced by
existing competitors and by new companies entering the market.
The market for application development tools and languages for
client/server computing environments is intensely competitive and the Company
expects competition to continue to increase. The Company's competitors include
a broad range of companies that develop and market tools and languages for
software application development, including (i) providers of modeling and/or
diagramming tools, some of which operate, or may in the future, operate in
conjunction with SAP's R/3 System and who, for marketing purposes, have formed
or may, in the future, form strategic partnerships with providers of
commercially popular software systems, such as SAP; (ii) providers of
object-oriented languages and tools such as C++ and C and Smalltalk; (iii)
providers of object-based development tools; (iv) providers of 4GL-based
development tools; and (v) providers of CASE tools. Vendors marketing
competing object-oriented languages and/or tools, include Brightware, Gensyn,
Neuron Data, NeXT, ParcPlace, and Platinum Technologies. Providers of 4GL
application development tools include Borland, Informix, Oracle, and Sybase.
Providers of CASE tools include Cayenne, IDE, Rational, Intersolv, Oracle,
Texas Instruments, and Seer Technologies. Other companies offering SAP R/3
modeling and implementation tools include: IDS, Prof. Scheer, Visio, Texas
Instruments, Logic Works, and Micrographix. In addition, SAP offers the
Business Engineering Workbench with a subset of the capabilities of the
IntelliCorp products.
Many of the Company's current and prospective competitors have
significantly greater financial, technical, manufacturing and sales and
marketing resources than the Company. These companies as well as other
hardware and database software vendors can be expected to develop and market
additional competitive products in the future. In addition, a variety of
established companies are also building object-oriented products as extensions
to their existing product lines.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent upon a limited number of key management,
technical and sales personnel, the loss of whom would adversely affect the
Company's business. In addition, in the future, the Company may need to
augment or replace existing key management, technical, or sales personnel in
order to maintain or increase its business. Because of the complexity and
breadth of the Company's product line in certain technical areas, the Company
may have only a single employee with appropriate expertise. The loss of any
such employee can have the effect of slowing down or halting development with
respect to a product until the Company is able to locate and hire another
technical person with the requisite expertise. In addition, certain
management, technical and support personnel are relatively new to the Company,
and the Company's success in the future will depend in part on successful
assimilation of new personnel. The Company's future success will depend in
part upon its ability to attract and retain highly qualified personnel. The
Company competes for such personnel with other companies, academic
institutions, government entities and other organizations. The ability to
recruit, on a timely basis, appropriate personnel to staff the various
development efforts will be a key factor in the success of those projects. If
the Company cannot recruit the appropriate personnel and must hire outside
consultants to perform this work, the contract margins may be adversely
affected. There can be no assurance that the Company will be successful in
hiring or retaining qualified personnel. It is particularly difficult to hire
personnel with SAP expertise. Loss of key personnel or inability to hire and
retain qualified personnel could have a material adverse effect on the
Company's business and results of operations. Recently, and from time to time
in the past, the Company has experienced significant turnover in its sales
force. There can be no assurance that the Company will be able to reduce this
periodic turnover in its sales force and, as a result, the Company may lose
sales opportunities, market share or customers.
Customers in the modeling technology market require tools that can
operate on many different hardware platforms and with many different operating
systems, tools, databases, systems and devices. Because of the broad range of
features and functions required of the Company's products, their development,
maintenance and use is extremely complex and requires the Company to have
technical personnel with a breadth of expertise. Highly qualified and
specialized personnel for sales, customer training, customer support and
on-site consulting are required. These personnel requirements are very
difficult for the Company to manage and maintain because of its limited
financial resources. There can be no assurance that the Company will have the
necessary personnel to develop and commercialize its products successfully, or
to port these products to the necessary hardware platforms and operating
systems.
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DEPENDENCE ON LOWER MARGIN SERVICE REVENUES
A significant amount of the Company's revenues has been derived from
contract and other services. The operating margins from revenues for such
services are substantially lower than the operating margins from revenues for
the Company's software products. This disparity is principally due to the low
cost of materials, royalties, and other costs of the Company's software
products, as compared to the relatively high personnel costs (including the
higher cost of using outside consultants) incurred in providing consulting
services. In addition, as the proportion of contract and other service
revenues increases, the overall margins will decrease accordingly. As a result
of the Company's reliance on contract and other revenues, the Company's overall
operating margins may be lower than those for software companies that do not
derive such a significant percentage of revenues from contract and other
services. In addition, the Company's operating margins have in the past and
may in the future vary significantly as a result of changes in the proportion
of revenues attributable to products and services.
LACK OF PROFITABILITY; POTENTIAL FUTURE LOSSES
Over the last five years, the Company has experienced aggregate
consolidated net losses of over $25,000,000, including a net loss of $4,499,000
for the year ended June 30, 1996 and a net loss of $2,032,000 for the nine
months ended March 31, 1997. The Company may incur a loss in fiscal 1997 and
may also have losses in future years. There can be no assurance that the
Company will eventually attain profitability or, if it attains profitability,
that it will be able to maintain profitability.
Working capital at March 31, 1997 was $6,482,000 as compared to
$171,000 at March 31, 1996. Management's financial plans for fiscal year 1998
anticipate sufficient revenues so as not to require additional capital
resources. However, the Company may, from time to time, need to raise
additional capital through debt or equity financing and there can be no
assurance that such financing will be available to the Company. If revenues
for fiscal year 1998 do not meet management's expectations, and additional
financings are not available, management has the ability and intent to reduce
certain expenditures to lower the Company's cost base, if required. As a
result of these factors, the Company believes its cash and cash equivalents at
March 31, 1997 and expected cash generated from operations will be sufficient
to fund operations during fiscal 1998.
To allow its Common Stock to remain listed for trading on the Nasdaq
Stock Market, the Company is required to maintain a minimum capital and
surplus. In the past, the Company's capital and surplus have fallen below the
Nasdaq minimum. This failure to maintain the minimum capital and surplus
required the Company to exchange debt for preferred stock and to issue
additional Common Stock in 1996 and preferred stock in 1997. Additional losses
could adversely affect the Company's ability to maintain the required minimum
capital and surplus in the future. Should the Company's Common Stock be
delisted from the Nasdaq Stock Market, the trading market for the Common Stock
may be adversely affected.
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's quarterly revenues and operating results have in the
past, and may in the future, vary significantly due to such factors as the
timing of new product introductions, changes in pricing policies by the Company
and its competitors, market acceptance of new products, and enhanced versions
of existing products, the information systems department budgets of its
customers, and the length of sales cycles. Although a significant portion of
the Company's revenues in each quarter result from orders received in that
quarter, the majority of the Company's expense levels are fixed, based on
expectations of future revenues. In addition, a substantial amount of the
Company's quarterly revenues have typically been recorded in the third month of
the fiscal quarter with a concentration of such revenues in the last half of
the month. The timing of the closing of large license agreements increases the
risk of quarter to quarter fluctuations. As a result, if revenues are not
realized as expected, the Company's operating results will be materially
adversely affected. Accordingly, it is likely that the Company would
experience disproportionate declines in its operating results if revenues were
to decline. In addition, it is possible that in some future quarter the
Company's operating results will be below the expectations of public market
analysts and investors. In such event, the price of the Company's Common Stock
would likely be adversely affected.
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CONCENTRATED PRODUCT LINE
The Company currently derives substantially all of its revenue from
LiveModel: SAP R/3 Edition and PowerModel and related products and services and
expects this concentration to continue for the foreseeable future. As a
result, any factor adversely affecting the demand for, or pricing of, LiveModel
and PowerModel and related products and services would have a material adverse
effect on the Company's business and results of operations. In fact, the
PowerModel and non-SAP LiveModel business has been declining over the past
year, and the Company's reliance on LiveModel for SAP R/3 is increasing
significantly. In addition, there can be no guarantee that the PowerModel and
non-SAP LiveModel revenue will stop declining and/or grow again. The Company's
future financial performance will depend significantly on the successful
development and customer acceptance of new and enhanced versions of its
products.
CUSTOMER CONCENTRATION
For the nine month period ended March 31, 1997, revenues from the sale
of products and services to one commercial customer and one related party
accounted for 8% and 18%, respectively, of total revenue. The level of
revenues received from these customers may not continue in future periods. In
addition, certain customers may account for a significant portion of net
revenues in a particular quarter, which may lead to significant variations in
quarterly results.
NEED FOR CHANNEL PARTNERS
In order for the Company to reach higher levels of revenue and
sustainable growth, the Company may require channel partners for the sale,
distribution and co-marketing of its products. Such partners may include SAP,
consulting firms, systems integrators, traditional software distributors or
hardware or software companies with established distribution channels. The
Company has an agreement with Deloitte & Touche Consulting Group/ICS, Origin
and Price Waterhouse to promote or to utilize the Company's LiveModel: SAP R/3
Edition. These channel partners are instrumental in gaining acceptance of
IntelliCorp's modeling tools both for their consulting methodology as well as
by their customers for continuing operating requirements. The Company
anticipates that a significant portion of fiscal year 1997 revenues will be
generated through these arrangements and other similar arrangements or
agreements with consulting firms and hardware companies. There can be no
assurance that the Company will be able to achieve significant sales through
its Deloitte & Touche, Origin and Price Waterhouse relationships or that the
Company will be successful in establishing additional channel partner
arrangements or that, if such relationships are established, they will prove to
be commercially successful. In addition, there can be no assurance that the
Company's partners will not utilize their relative size or financial strength
to the disadvantage of the Company.
MANAGING A CHANGING BUSINESS
Since its inception, the Company has experienced changes in its
operations which have placed significant demands on the Company's
administrative, operational and financial resources. The Company's future
performance will depend in part on its ability to manage change, both in its
domestic and international operations, and to adapt its operational and
financial control systems as necessary to respond to changes in its business.
The failure of the Company's management to effectively respond to and manage
changing business conditions could have a material adverse effect on the
Company's business and results of operations.
INTERNATIONAL OPERATIONS
Approximately 29% of the Company's net revenues for the nine month
period ended March 31, 1997 and 31% of the Company's net revenues for the
fiscal year ended June 30, 1996 were attributable to international sales.
Substantially all international revenues to date have been derived from license
revenues. The Company currently offers local language versions of its
products. Although it does intend to offer additional localized product
releases in the future, there can be no assurance that such releases will be
successfully developed or, if developed, that they will achieve market
acceptance. The Company faces certain risks as a result of international
sales. First, staff levels have been reduced significantly as a result of the
Company's restructuring in the last fiscal year. Second, the results of the
Company could be affected adversely by short-term fluctuations in currency
exchange rates. Additionally, the Company's international operations may be
affected by changes in demand resulting from long-term changes in interest and
currency exchange
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rates. The Company is also subject to other risks associated with
international operations, including tariff regulations and requirements for
export licenses, particularly with respect to the export of certain
technologies, which may on occasion be delayed or difficult to obtain,
unexpected changes in regulatory requirements, longer accounts receivable
payment cycles, difficulties in managing international operations, potentially
adverse tax consequences, economic and political instability, restrictions on
repatriation of earnings, and the burdens of complying with a wide variety of
foreign laws. In addition, the laws of certain countries do not protect the
Company's products and intellectual property rights to the same extent as do
the laws of the United States. There can be no assurance that such factors
will not have an adverse effect on the Company's future international sales
and, consequently, on the Company's business and results of operations. With
the exception of limited patent protection in Canada, the Company has no
patents protecting its products in foreign markets.
PROPRIETARY INFORMATION
IntelliCorp regards its software as proprietary and attempts to
protect it by relying upon copyrights, trade secret and patent laws and
contractual nondisclosure safeguards as well as restrictions on transferability
that are incorporated into its software license agreements. IntelliCorp
licenses its software products (in object or binary form) to customers rather
than transferring title. In spite of these precautions, it may be possible for
competitors or users to copy aspects of IntelliCorp's products or to obtain
information which the Company regards as trade secrets without authorization,
or to develop similar technology independently. In addition, effective
copyright and trade secret protection may be unavailable or limited in certain
foreign countries. IntelliCorp has licensed a number of products, including
PowerModel, in source form (or human-readable form) to certain customers and
third parties, both in the United States and internationally, for a variety of
purposes, including porting to other platforms and globalization. This
practice increases the possibility of misappropriation or other misuse of the
Company's products. IntelliCorp has not required end-users of Kappa-PC (a
PowerModel product) and LiveModel: SAP R/3 Edition to sign license agreements.
Instead, the license agreement for Kappa-PC and LiveModel: SAP R/3 Edition is
included in the product packaging, and the packaging explains that by opening
the seal the user is agreeing to the terms of the license agreement. It is
uncertain whether "Shrink-wrap" license agreements of this type are legally
enforceable.
IntelliCorp's first three patents, relating primarily to
knowledge-based technology, were issued between June 1987 and May 1990.
IntelliCorp's fourth patent with respect to certain technologies integrated in
its PowerModel product was issued in May 1994. The Company filed an additional
patent application in June 1994 relating to its LiveModel product. However,
there can be no assurance that any further patents will be issued with respect
to the Company's products, and existing patent and copyright laws afford only
limited practical protection to IntelliCorp. Although the Company believes
that its products and technology do not infringe on any existing proprietary
rights of others, there exist several patents with claims that might extend to
IntelliCorp's products, which, together with the growing use of patents to
protect software, has increased the risk that third parties may assert
infringement claims against IntelliCorp in the future. Any such claims, with
or without merit, could result in costly litigation or might require the
Company to enter into royalty or licensing agreements. Such royalty or license
agreements, if required, may not be available on terms acceptable to the
Company or at all. The Company does not have insurance to cover the risk of
infringement claims.
In view of the rapid rate of technological change in the areas in
which it does business and the uncertainty of the scope of the protection
afforded by copyright and patent laws, IntelliCorp does not believe that
copyrights or patents will be of major competitive advantage to it. Rather,
IntelliCorp believes that it must rely primarily on the technical competence
and creative ability of its personnel to improve and update its software
products and create additional products in order to be successful.
PUBLIC TRADING MARKET; POSSIBLE VOLATILITY OF STOCK PRICE
As of April 30, 1997, there were 12,913,477 shares of Common Stock
outstanding. The trading price of the Company's Common Stock is subject to
wide fluctuations in response to variations in the actual or anticipated
quarterly operating results of the Company, announcements of new products or
technological innovations by the Company or its competitors, and general
conditions in the industry. In addition, stock markets for securities of high
technology companies have experienced extreme price and volume trading
volatility in recent years. This volatility may have a substantial effect on
the market prices of securities of many high-technology companies for reasons
unrelated to the operating performance
-10-
<PAGE> 11
of the specific companies. These broad market fluctuations may adversely
affect the market price of the Company's Common Stock.
In March 1997, the Company had a preferred stock offering for shares
of its Series B Preferred Stock (the "Series B Preferred Stock"). The Series B
Preferred Stock may, at the option of the Company, be exchanged for convertible
promissory notes of the Company issued with the same terms as the Series B
Preferred Stock (the "Notes"). The dividends on Series B Preferred Stock, or
the interest on the Notes in the event of an exchange, may be and are expected
to be payable in shares of Common Stock in lieu of cash for one year. The
Series B Preferred Stock or the Notes, if issued, are convertible into Common
Stock at the election of the holders. The Company is registering for resale
the shares of Common Stock issuable with respect to the Series B Preferred
Stock or the Notes, as well as the Common Stock expected to be issued in
payment of dividends or interest with respect to the Series B Preferred Stock
or Notes, as applicable. If all the shares reserved for these purposes were
issued, it would significantly increase the number of shares outstanding.
Sales or issuance of substantial amounts of the Company's Common Stock by the
holders of the Series B Preferred Stock or others in the future could adversely
affect the market price of the Company's Common Stock. Substantially all of
the outstanding shares of the Company's Common Stock are eligible for sale in
the public market. In addition, the holders of stock options could exercise
their options and sell the vested shares in the public market.
-11-
<PAGE> 12
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the authorized capital stock of the
Company consists of 20,000,000 shares of Common Stock, with a par value of
$.001, and 2,000,000 shares of preferred stock, with a par value of $.001.
COMMON STOCK
As of April 30, 1997, there were 12,913,477 shares of Common Stock
outstanding. The shares were held of record by approximately 571 stockholders.
As of April 30, 1997, 3,661,290 shares of Common Stock were issuable upon the
conversion of outstanding shares of Series A Preferred Stock and Series B
Preferred Stock (together, the "Preferred Stock"). In addition, up to 346,000
shares of Common Stock may be issuable by the Company in lieu of cash dividends
on the Preferred Stock. The holders of Common Stock are entitled to one vote
for each share held of record on all matters submitted to a vote of
stockholders, including the election of Directors. The holders of the Common
Stock are entitled to any dividends that may be declared by the Board of
Directors out of funds legally available therefor subject to the prior rights,
if any, of holders of Preferred Stock. In the event of liquidation or
dissolution of the Company, holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities and the
liquidation preferences, if any, of any outstanding shares of Preferred Stock.
Holders of Common Stock have no preemptive rights and have no right to
convert their Common Stock into any other securities. All of the outstanding
shares of Common Stock are fully paid and nonassessable.
PREFERRED STOCK
As of March 31, 1997, there were 580,645 shares of Series A Preferred
Stock and 5,000 shares of Series B Preferred Stock outstanding. The Preferred
Stock was held of record by eight stockholders. Each share of Series A
Preferred Stock is convertible at the option of the holder into two shares of
Company Common Stock, subject to adjustments for dilutive events, and carries
10% cumulative dividends which, at the Company's election, may be paid in cash
or Common Stock for dividends payable through April 30, 1998. Each share of
Series B Preferred Stock is convertible at the option of the holder into 500
shares of Company Common Stock, subject to adjustment for dilutive events, and
carries 8% cumulative dividends which, at the Company's election, may be paid
in cash or Common Stock for dividends payable through April 30, 1998. The
Series B Preferred Stock may be exchanged, at the option of the Company for
convertible promissory notes of the Company (the "Notes"). The Series A
Preferred Stock and Series B Preferred Stock have no voting rights unless
dividend payments are more than two years in arrears, at which time the
outstanding shares of Preferred Stock shall have the right to vote with the
Common Stockholders as one class, with the number of votes equal to the number
of shares of Common Stock into which the outstanding shares of Preferred Stock
are convertible. The outstanding shares of Preferred Stock have the right to
receive a preference in the event of any liquidation or winding up of the
Company.
The Board of Directors may issue additional shares of preferred stock
from time to time in one or more series with such designations, voting powers,
if any, preferences and relative, participating, optional or other special
rights, and such qualifications, limitations and restrictions thereof, as are
determined by resolution of the Board of Directors of the Company. The
issuance of preferred stock may have the effect of delaying, deferring or
preventing a change in control of the Company without further action by the
stockholders and could adversely affect the rights and powers, including voting
rights, of the holders of Common Stock. In certain circumstances, the issuance
of preferred stock could depress the market price of the Common Stock.
-12-
<PAGE> 13
SELLING STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock by the Selling Stockholders
as of April 30, 1997 and as adjusted to reflect the sale by Selling
Stockholders of Shares offered by this Prospectus.
<TABLE>
<CAPTION>
Common Stock Common Stock
Beneficially Owned Beneficially Owned
Prior to Offering (1) After Offering (1)
------------------ ---------------
Common Stock
Holder Number Percent to be Sold Number Percent
------ ------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Delaware State Employee's 1,841,160(2) 12.5% 1,841,160(2) 0 --
Retirement Fund . . . . . . .
ICI American Holdings, Inc. . 549,600(3) 4.1% 549,600(3) 0 --
Zeneca Holdings, Inc. . . . . 357,240(4) 2.7% 357,240(4) 0 --
---------- ---------- -
TOTAL: 2,748,000 2,748,000 0
- -----------------------
</TABLE>
(1) Applicable percentage of ownership is based on 12,913,477 shares of
Common Stock outstanding as of April 30, 1997 and, for each
stockholder, assumes conversion of all outstanding shares of Series B
Preferred Stock held by such stockholder, and the issuance of the
Shares which may be issued as payment of dividends on such Series B
Preferred Stock.
(2) Consists of 1,675,000 shares issuable on conversion of Series B
Preferred Stock, and up to 166,160 shares which may be issued as
payment of dividends on the Series B Preferred Stock.
(3) Consists of 500,000 shares issuable on conversion of Series B
Preferred Stock, and up to 49,600 shares which may be issued as
payment of dividends on the Series B Preferred Stock.
(4) Consists of 325,000 shares issuable on conversion of Series B
Preferred Stock, and up to 32,240 shares which may be issued as
payment of dividends on the Series B Preferred Stock.
-13-
<PAGE> 14
PLAN OF DISTRIBUTION
Of the 2,748,000 Shares offered by this Prospectus, 2,500,000 of the
Shares are issuable upon the conversion of 5,000 outstanding shares of Series B
Preferred Stock, or the Notes, if issued, and up to 248,000 of the Shares may
be issued as dividends on the Series B Preferred Stock or as interest on the
Notes, if issued.
All or a portion of the Shares of Common Stock offered hereby by the
Selling Stockholders may be delivered and/or sold in transactions from time to
time on the over-the-counter market at prices prevailing at the time, at prices
related to such prevailing prices or at negotiated prices and/or may also be
used to cover any short positions previously established. The Selling
Stockholders may effect such transactions by selling to or through one or more
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling
Stockholders. The Selling Stockholders and any broker-dealers that participate
in the distribution may under certain circumstances be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions
received by such broker-dealers and any profits realized on the resale of
Shares by them may be deemed to be underwriting discounts and commissions under
the Securities Act. The Selling Stockholders may agree to indemnify such
broker-dealers against certain liabilities, including liabilities under the
Securities Act. In addition, the Company has agreed to indemnify the Selling
Stockholders with respect to the Shares offered hereby against certain
liabilities, including, without limitation, certain liabilities under the
Securities Act.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Selling Stockholders (and, if they act as agent
for the purchaser of such Shares, from such purchaser). Broker-dealers may
agree with the Selling Stockholders to sell a specified number of Shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable
to do so acting as agent for the Selling Stockholders, to purchase as principal
any unsold Shares at the price required to fulfill the broker-dealer commitment
to the Selling Stockholders. Broker-dealers who acquire Shares as principal
may thereafter resell such Shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
Shares commissions computed as described above. To the extent required under
the Securities Act, a supplemental prospectus will be filed, disclosing (a) the
name of any such broker-dealers, (b) the number of Shares involved, (c) the
price at which such Shares are to be sold, (d) the commissions paid or
discounts or concessions allowed to such broker-dealers, where applicable, (e)
that such broker-dealers did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, as
supplemented, and (f) other facts material to the transaction.
Each Selling Stockholder will pay all commissions, transfer taxes, and
other expenses associated with the sale of securities such Selling Stockholder.
The Shares offered hereby are being registered pursuant to contractual
obligations of the Company, and the Company has paid the expenses of the
preparation of this Prospectus. The Company has not made any underwriting
arrangements with respect to the sale of Shares offered hereby.
-14-
<PAGE> 15
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Heller, Ehrman, White & McAuliffe, Palo Alto, California,
counsel to the Company in connection with the offering.
EXPERTS
The consolidated financial statements of IntelliCorp, Inc. appearing
in IntelliCorp, Inc.'s Annual Report (Form 10-KSB) for the year ended June 30,
1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
-15-
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered. All of the
amounts shown are estimates except the Securities and Exchange Commission
registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,473
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,800
Nasdaq Listing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,500
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,227
TOTAL: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant has the power to indemnify its officers and directors
against liability for certain acts pursuant to Section 145 of the General
Corporation Law of the State of Delaware. Section A of Article Ninth of the
registrant's Certificate of Incorporation provides:
1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director, officer, employee
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended, (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment) against all expense, liability and loss
(including attorneys' fees, judgments, fines, Employee Retirement Income
Security Act of 1974 excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in this Section shall
be a contract right and shall include the right to be paid by the Corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware General Corporation Law
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Section or
otherwise. The Corporation may by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
II-1
<PAGE> 17
2. Non-Exclusivity of Rights. The right to indemnification and
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Section shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
3. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4 Series B Preferred Stock Purchase Agreement(1)
5 Opinion of Heller, Ehrman, White & McAuliffe*
23.1 Consent of Heller, Ehrman, White & McAuliffe (filed as part of Exhibit 5)*
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney (See page II-4)
</TABLE>
- ------------------
* To be filed by Amendment.
(1) Incorporated herein by reference to the Company's Quarterly Report on Form
10-QSB for the fiscal quarter ended March 31, 1997.
ITEM 17. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement,
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registrations statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE> 18
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mountain View, State of California, on this
23rd day of June, 1997.
INTELLICORP, INC.
By: /s/ Kenneth H. Haas
-----------------------------
Kenneth H. Haas
President and Chief Executive
Officer
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Kenneth H. Haas and Kenneth A.
Czaja, or either of them, with full power of substitution, such person's true
and lawful attorneys-in-fact and agent for such person in such person's name,
place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement on Form
S-3 and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises in order to effectuate the same as fully, to all intents and
purposes, as he or such person might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Kenneth H. Haas Director and President June 23, 1997
----------------------------------------------
Kenneth H. Haas
/s/ Kenneth A. Czaja Vice President and Chief Financial Officer June 23, 1997
----------------------------------------------
Kenneth A. Czaja
/s/ Daniel R. Menudier Chief Accounting Officer and Controller June 23, 1997
----------------------------------------------
Daniel R. Menudier
Director
----------------------------------------------
Katharine C. Branscomb
/s/ Joseph A. Graziano Director June 23, 1997
----------------------------------------------
Joseph A. Graziano
/s/ Norman J. Wechsler Director June 23, 1997
----------------------------------------------
Norman J. Wechsler
</TABLE>
II-4
<PAGE> 20
INTELLICORP, INC.
Index to Exhibits
<TABLE>
<CAPTION>
Sequentially Numbered
Exhibit Description Pages
------------- ------------------------------------------------------------- ------------------------
<S> <C>
4 Series B Preferred Stock Purchase Agreement(1)
5 Opinion of Heller, Ehrman, White & McAuliffe*
23.1 Consent of Heller, Ehrman, White & McAuliffe (filed as part
of Exhibit 5)*
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney (See page II-4)
</TABLE>
- -------------------
* To be filed by Amendment.
(1) Incorporated herein by reference to the Company's Quarterly Report on Form
10-QSB for the fiscal quarter ended March 31, 1997.
II-5
<PAGE> 1
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of IntelliCorp, Inc.
for the registration of 2,748,000 shares of its common stock and to the
incorporation by reference therein of our report dated August 2, 1996, with
respect to the consolidated financial statements of IntelliCorp, Inc. included
in its Annual Report [Form 10-KSB] for the year ended June 30, 1996, filed with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
June 19, 1997
