<PAGE>
As filed with the Securities and Exchange Commission on June 5, 2000
Registration No. 333- _____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
Sedona Corporation
(Exact name of registrant as specified in its charter)
649 North Lewis Road
Suite 220
Limerick, PA 19468
(610) 495-3003
(Address of principal executive offices)
Pennsylvania 95-4091769
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
------------
Marco A. Emrich
President and Chief Executive Officer
Sedona Corporation
649 North Lewis Road
Suite 220
Limerick, PA 19468
(610) 495-3003
(Name, address, including zip code and telephone number,
including area code of agent for service)
------------
Copies to:
Robert B. Murphy, Esq.
Piper Marbury Rudnick & Wolfe LLP
1200 19th Street, N.W.
Washington, D.C. 20036
(202) 861-3900
-----------------
Approximate date of commencement of proposed sale to the public: From time to
time 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 to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|___________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|___________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities To Be Registered Registered Share(1) Price Registration Fee
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.001 per share 1,176,726 $2.97 $3,494,876 $923
===================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee, based upon the average of the high and low prices for such
shares of common stock on May 26, 2000, as reported on the Nasdaq SmallCap
Market. Pursuant to Rule 416 of the Securities Act of 1933, as amended, this
registration statement also covers such additional number of shares of common
stock that may become issuable under any stock split, stock dividend or
anti-dilution provisions in the convertible preferred stock and warrants.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE>
PROSPECTUS
SEDONA CORPORATION
1,176,726 Shares Common Stock
----------------
The selling shareholder, listed on page 8, may offer from time to time
up to 1,176,726 shares of our common stock under this prospectus. No underwriter
is being used in connection with this offering of common stock. The selling
shareholder may offer and sell its shares to or through broker-dealers, who may
receive compensation in the form of discounts, concessions or commissions from
the selling shareholder, the purchasers of the shares, or both. We will not
receive any of the proceeds from the sale of shares.
The price of the common stock being offered under this prospectus will
most likely be the market price of our common stock. Our common stock is traded
on the Nasdaq Small Cap Market under the symbol SDNA. On June 2, 2000, the
closing price of one share of our common stock was $3.09.
--------------------
Investing in our common stock involves a high degree of risk. You
should carefully read and consider the risk factors beginning on page 2.
--------------------
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.
The date of this prospectus is _________, 2000.
<PAGE>
TABLE OF CONTENTS
Page
----
Sedona................................................................ 1
Risk Factors.......................................................... 2
Forward-Looking Statements............................................ 6
Use of Proceeds....................................................... 6
Selling Shareholders.................................................. 7
Plan of Distribution.................................................. 9
Legal Matters......................................................... 10
Experts............................................................... 10
Where You Can Find More Information................................... 10
<PAGE>
SEDONA
SEDONA Corporation develops, markets, services and supports
Internet-based customer relationship management solutions that provide
organizations with the ability to optimize their return on customer
relationships and greatly improve their customer acquisition, intimacy,
satisfaction and retention capabilities.
The rise of the Internet has opened the door to a whole new level of
competition in business today. In almost every industry, new competitors are
entering the market daily. Companies are aggressively looking to implement new
ebusiness strategies, which combine Internet technology with innovative
marketing to obtain and maintain market share.
In the new economy, there has been an increasing realization that focus
on the customer is of great importance. As the Internet has made the world
smaller, it has also made consumers more demanding than ever before. In order to
acquire and retain customers, enterprises have to find innovative ways to
leverage customer information to build personalized relationships with their
customers by offering customized products and services to them before the
competition does.
A new class of applications is changing the landscape of business
solutions by enabling enterprises with the competitive ability to effectively
personalize their customer relationships as well as identify otherwise unknown
sales and marketing opportunities. To do this in a timely and accurate way, new
technologies are needed which transform raw customer data into dynamically
created and visually presented smart content. Smart content is customer data
enhanced with consumer demographics, behaviors, interests and preferences
information that is then filtered and analyzed visually to provide timely and
precise information on-demand to business users.
SEDONA is an Internet customer relationship management application
provider targeting small and mid-sized financial services companies and the new
breed of e-commerce merchants known as etailers. Working with strategic alliance
partners, SEDONA's technologies also target large-scale customer relationship
management, supply chain management and enterprise resource management
applications within Fortune 1000 organizations.
Our principal executive offices are located at 649 North Lewis Road,
Limerick, Pennsylvania 19468, and our telephone number is (610) 495-3003.
1
<PAGE>
RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the following risk factors as well as other information contained in
this prospectus before deciding to invest in our securities. Any of these risk
factors could materially and adversely affect our business, financial condition
or operating results. In that case, the trading price of our common stock could
decline and you could lose all or part of your investment.
We have a limited operating history with which you can evaluate our business.
We only began focusing exclusively on our Internet-based application
solutions in 1999. As a result, we have only a limited operating history with
which you can evaluate our business and prospects. Our limited operating history
makes predicting our future operating results difficult. In addition, our
prospects must be considered in light of the risks and uncertainties encountered
by companies in the early stages of development in new and rapidly evolving
markets, specifically the rapidly evolving market for knowledge management
solutions. These risks include our ability to:
o acquire and retain customers;
o build awareness and acceptance of our brand name;
o extend existing and develop new strategic partner relationships;
o access additional capital when required;
o upgrade and develop our software and systems in a timely and
effective manner; and
o attract and retain key personnel.
Our business strategy may not be successful and we may not successfully
address these and other risks and uncertainties related to our limited operating
history.
We have limited revenues, have incurred operating losses in recent years and may
not be profitable in the future.
We had total revenues from continuing operations of $718,000, $244,000,
$15,000 and $260,000 and losses from continuing operations of $1.5 million, $3.3
million, $3.9 million and $5.3 million for the three months ended March 31, 2000
and the years ended December 31, 1999, 1998 and 1997, respectively. As of March
31, 2000, we had an accumulated deficit of $34.6 million. If our current and
future products fail to gain acceptance in the marketplace, we believe it is
unlikely that we will be able to reverse our operating loss trend or assure you
of our future profitability.
2
<PAGE>
This offering may depress our stock price.
Under this prospectus, the selling shareholder is registering shares
representing approximately 4.3% of our outstanding common stock as of June 2,
2000. Sales of a substantial number of shares of common stock in the public
market by the selling shareholder may decrease the prevailing market price for
our common stock and could impair our ability to raise capital through the sale
of our equity securities.
The common stock issuable upon conversion of our convertible preferred stock may
significantly increase the supply of our common stock in the public market,
which may cause our stock price to decline.
We have issued and outstanding series A, series F, series G and series
H convertible Class A preferred stock. As of May 15, 2000, these series of
preferred stock were convertible into 2,529,527 shares of common stock. The
actual number of shares of common stock issuable upon conversion of the
convertible preferred stock is indeterminate and is dependent on the market
price of our common stock at the time of conversion. We have registered for
public resale 3,041,437 shares of common stock issuable upon conversion of the
series B (which was converted in May 2000), series F and series G convertible
preferred stock to take into account additional shares of common stock that
would be issuable should the market price for our common stock decline. Under
the registration statement of which this prospectus is a part, we are
registering 928,792 shares of common stock in connection with the conversion of
the series H convertible preferred stock. Sale of all or a substantial number of
shares of common stock received upon conversion of the convertible preferred
stock in the public market, or the perception that these sales will occur, may
depress the prevailing market price for our common stock, which would enable the
holders of the preferred stock to convert into more shares, further depressing
the market price for our common stock.
Issuance of securities under our shelf registration statement may depress our
stock price.
In May 2000, we filed with the SEC a shelf registration statement
enabling us to issue up to $50 million of securities, which may include our
common stock, warrants to purchase common stock and Class A preferred stock and
debt securities convertible into common stock. Sales by us of a substantial
number of shares of common stock or securities exercisable or convertible into
common stock may decrease the market price for our common stock. The perception
in the public market that we may sell additional securities could also depress
our stock price.
The exercise of warrants or options may depress our stock price.
There are a significant number of warrants and options to purchase our
common stock outstanding. Holders may sell the common stock acquired upon
exercise of the warrants and options at a market price that exceeds the exercise
price of the warrants and options paid by the holders. Sales of a substantial
number of shares of common stock in the public market by holders of warrants or
options may depress the prevailing market price for our common stock and could
3
<PAGE>
impair our ability to raise capital through the future sale of our equity
securities. As of June 2, 2000, we had warrants outstanding to purchase
7,378,671 shares of common stock at a weighted average exercise price of $2.75
per share and options outstanding to purchase 2,386,044 shares of common stock
with a weighted average exercise price of $2.44 per share. Approximately 80.4%
of the warrants and 35.0% of the options were exercisable as of June 2, 2000.
We do not expect to pay any dividends on our common stock.
We have not paid any cash dividends on our common stock and we do not
expect to pay any dividends in the immediate future. The value of your shares
will be determined solely by the market price of our common stock.
We may require additional capital that may not be available.
Although we believe that our shelf registration statement will enable
us to conduct our operations as currently contemplated for a period of at least
one year, we may require additional financing at a later date. We do not know if
additional financing will be available to us on terms that we can accept. If
financing is not available, we may have to sell, suspend or terminate our
operations.
If we are unable to successfully integrate our recent acquisition, our financial
results will suffer.
We acquired the Customer Information Management System unit from Acxiom
Corporation in April 2000 for consideration that included the issuance of $1.5
million of our series H convertible preferred stock and warrants to purchase
247,934 shares of common stock at an exercise price of $3.025. Our future
profitability will depend heavily on our ability to integrate this business with
our company. Failure to successfully integrate the businesses may cause
significant operating inefficiencies and adversely affect profitability. To
successfully integrate the companies, we must, among other things, install and
standardize adequate operational, financial and control systems.
The compatibility of our products with the Internet is important to our success.
Our applications communicate through public and private networks over
the Internet. The increased commercial use of the Internet could require
substantial modification and customization of our software products and the
introduction of new products.
If our products fail to meet the evolving requirements of our customers, our
business may be adversely affected.
We may not be successful in developing, marketing and releasing new
products or new versions of our applications that respond to technological
developments, evolving industry standards or changing customer requirements. Our
4
<PAGE>
business, operating results and financial condition could be materially and
adversely affected if we are not able to meet the changing industry standards or
customer demands.
We rely on our intellectual property which we may be unable to protect, or we
may be found to infringe the rights of others.
We rely on a combination of copyright, trade secret and trademark laws,
confidentiality procedures and contractual provisions to protect our proprietary
rights which afford only limited protection. Others may develop technologies
that are similar or superior to our technology or design around our technology.
Policing unauthorized use of our products is difficult. In addition, the laws of
some foreign countries do not protect our proprietary rights as fully as do the
laws of the United States. Our means of protecting our proprietary rights in the
United States or abroad may not be adequate. Further, we cannot guarantee that
third parties will not assert infringement claims against us in the future, that
assertions by such parties will not result in costly litigation, or that we
would prevail in any such litigation or be able to license any valid or
infringed patents from third parties on commercially reasonable terms.
We must recruit and retain qualified professionals to succeed in our business.
Our future success depends in large part on our ability to recruit and
retain qualified professionals skilled in engineering, software development,
production and marketing. Such professionals are in great demand and are likely
to remain a limited resource in the foreseeable future. Competition for
qualified professionals is intense. Any inability to recruit and retain a
sufficient number of qualified employees could hinder the growth of our
business.
Loss of any of our key management or skilled personnel could negatively impact
our business.
Our future success depends to a significant extent on the continued
service and coordination of our executive officers and other key employees. The
loss or departure of any of our officers or key employees could materially
adversely affect our ability to implement our business plan. In addition, if for
any reason our key employees, or any replacement key employees, are not able to
work together effectively or successfully, our business could be materially
adversely affected.
5
<PAGE>
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus discuss future
expectations, contain projections of results of operation or financial condition
or state other forward-looking information. Forward-looking statements can be
identified by the use of progressive terminology, such as may, will, expect,
anticipate, estimate, continue or other similar words. These statements are
subject to known and unknown risks and uncertainties that could cause our actual
results to differ materially from those contemplated by the statements. Factors
that might cause such a difference include those discussed in the section titled
Risk Factors beginning on page 2. 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 the entire
prospectus, as well as the documents incorporated by reference in the
prospectus, before making an investment decision. All references to the terms we
or us in this prospectus means Sedona Corporation and its subsidiaries, except
where it is clear that the term means only the parent corporation.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of our
common stock by the selling shareholder. If any or all of the warrants held by
the selling shareholder are exercised, we intend to use the net proceeds for
working capital and general corporate purposes. Temporarily, we may invest the
net proceeds from the exercise of the warrants, if any, in high grade short term
interest bearing investments.
6
<PAGE>
SELLING SHAREHOLDERS
The common stock offered by this prospectus represents 928,792 shares
issued or issuable upon conversion of our $1,500,000 series H convertible
preferred stock and 247,934 shares issuable upon exercise of warrants at an
exercise price of $3.025 per share.
The number of shares that may be actually sold by the selling
shareholder will be determined by the selling shareholder. Because the selling
shareholder may sell all, some or none of the shares of common stock which it
holds, and because the offering contemplated by this prospectus is not currently
being underwritten, no estimate can be given as to the number of shares of
common stock that will be held by the selling shareholders upon termination of
the offering.
The following table sets forth the beneficial ownership of our common
stock by the selling shareholder as of June 2, 2000. Beneficial ownership
includes shares of outstanding common stock and shares of common stock that a
person has the right to acquire within 60 days of this prospectus. The selling
shareholder has the sole power to direct the voting and investment over the
shares owned by it.
The shares of common stock included in the table as owned before the
offering represent good faith estimates of the number of shares of common stock
that will become issuable upon conversion of the series H convertible preferred
stock based on conversion prices as of June 2, 2000. The actual number of shares
of common stock issuable upon conversion of the series H convertible preferred
stock is indeterminate, and is subject to adjustment that could materially
change the amounts set forth in the table depending on factors which we cannot
predict at this time, including, among other factors, the future market price of
our common stock.
Pursuant to its terms, the series H convertible preferred stock is
convertible at our option for the first thirty-three months following the date
of issuance and at the option of the holder from the end of the thirty-third
month following issuance through the end of the thirty-sixth month following
issuance. Thirty-six months after issuance, the series H convertible preferred
stock is again convertible at our option. Conversion by either party is limited
to the extent that the number of shares issuable, together with the number of
shares of common stock beneficially owned by the holder, but not including
unconverted shares of convertible preferred stock, would not equal or exceed
4.9% of the then outstanding common stock as determined in accordance with
section 13(d) of the Securities Exchange Act of 1934. The holder may convert
beyond the 4.9% limitation during its conversion period if it provides us with
at least 75 days notice prior to the conversion. This 4.9% limitation, however,
does not prevent a holder that does not provide at least 75 days prior notice
from selling more than 4.9% of our common stock because the shareholder can
convert the convertible preferred stock and then sell all of the common stock
received upon conversion to permit it to engage in further conversions.
7
<PAGE>
<TABLE>
<CAPTION>
Total Common Stock Number of Shares of Common Stock
Owned Before the Common Stock to be Owned After the
Name Offering Offered Offering
---- ------------------- ------------------- -----------------------
Number Percent
------ -------
<S> <C> <C> <C> <C>
Acxiom Corporation.............. 712,330 (1) 1,176,726 (2) -- --
</TABLE>
-----------------------
(1) Represents the number of shares issuable upon conversion of series H
convertible preferred stock at the June 2, 2000 conversion price of
$3.23 per share and 247,934 shares issuable upon exercise of warrants.
The series H convertible preferred stock is convertible at a per share
price equal to 95% of the average closing price of our common stock on
the Nasdaq SmallCap Market for the consecutive 20-trading day period
immediately preceding the conversion date.
(2) As required by a registration rights agreement, we are registering for
resale by the holder of the series H convertible preferred stock 200% of
the common stock issuable to this holder upon conversion at the
conversion price in effect on June 2, 2000 of $3.23 per share. We are
also registering for resale the 247,934 shares issuable upon exercise of
the warrants held by the holder of the series H convertible preferred
stock.
The table below sets forth the number of shares of our common stock
that the holder of the series H convertible preferred stock would have acquired
if it elected to convert the entire amount of this series of convertible
preferred stock on June 2, 2000. The share amounts are based on $3.23, which is
95% of the average closing price of our common stock for the 20 consecutive
trading day period ending June 2, 2000, and on assumed share prices of $2.42,
$1.62 and $0.81, which prices represent a 25%, 50% and 75% decline,
respectively, in that average closing price. There were 27,303,075 shares of our
common stock outstanding on June 2, 2000.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Series H
------------------------------------------------------------------------------------------------------------
Percentage Decline in Conversion Shares of Common Stock Percentage of Outstanding
Average Closing Price Price in Effect Issued Upon Conversion Common Stock
----------------------------- ---------------- -------------------------- -------------------------
<S> <C> <C> <C>
0% ($3.23) $ 3.23 464,396 1.7%
25% ($2.42) 2.42 619,835 2.3
50% ($1.62) 1.62 925,926 3.4
75% ($0.81) 0.81 1,851,852 6.8
------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling shareholder. The
shares being registered are owned or may be acquired by the selling shareholder
upon conversion of preferred stock or exercise of warrants. The selling
shareholder, as used in this prospectus, includes donees, pledgees, transferees
or other successors in interest who may receive shares from the selling
shareholder after the date of this prospectus. The selling shareholder may offer
its shares of our common stock at various times in one or more of the following
transactions:
o in ordinary broker's transactions on Nasdaq or any national
securities exchange on which our common stock may be listed at
the time of sale;
o in the over-the-counter market;
o in private transactions other than in the over-the-counter
market;
o in connection with short sales of other shares of our common
stock in which shares are redelivered to close out positioning;
o by pledge to secure debts and other obligations;
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; or
o in a combination of any of the above transactions.
The selling shareholder may sell its shares at market prices prevailing
at the time of sale, at prices related to the prevailing market prices, at
negotiated prices or at fixed prices. The selling shareholder may use
broker-dealers to sell its shares. If this happens, broker-dealers will either
receive discounts or commissions from the selling shareholder, or they will
receive commissions from purchasers of shares for whom they acted as agents.
The selling shareholder also may resell all or a portion of the shares
in open market transactions in reliance upon Rule 144 under the Securities Act.
The shareholder must meet the criteria and conform to the requirements of that
rule. The selling shareholder and the broker-dealers to or through whom sale of
the shares may be made could be deemed to be underwriters within the meaning of
the Securities Act, and their commissions or discounts and other compensation
received in connection with the sale of the shares may be regarded as
underwriters' compensation, if the SEC determines that they purchased the shares
in order to resell them to the public.
The selling shareholder has not advised us of any specific plans for
the distribution of the shares covered by this prospectus. When and if we are
notified by the selling shareholder that any material arrangement has been
entered into with a broker-dealer or underwriter for the sale of a material
portion of the shares covered by this prospectus, a prospectus supplement or
post-effective amendment to the registration statement will be filed with the
SEC. This supplement or amendment will include the following information:
9
<PAGE>
o the name of the participating broker-dealer(s) or underwriters;
o the number of shares involved;
o the price or prices at which the shares were sold by the selling
shareholder;
o the commissions paid or discounts or concessions allowed by the
selling shareholder to the broker-dealers or underwriters; and
o other material information.
We have advised the selling shareholder that the anti-manipulation
rules promulgated under the Securities Exchange Act, including Regulation M, may
apply to sales of the shares offered by the selling shareholder. We have agreed
to pay all costs relating to the registration of the shares. Any commissions or
other fees payable to broker-dealers in connection with any sale of the shares
will be paid by the selling shareholder or other party selling the shares.
LEGAL MATTERS
The validity of the shares of common stock offered was passed upon for
us by Piper Marbury Rudnick & Wolfe LLP.
EXPERTS
The consolidated financial statements of Sedona Corporation appearing
in our annual report on Form 10-K as of December 31, 1999 and 1998 and for the
two years then ended, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report included therein and incorporated herein
by reference. The consolidated financial statements of Sedona Corporation for
the year ended December 31, 1997 appearing in our annual report on Form 10-K for
the year ended December 31, 1999, have been audited by BDO Seidman, LLP,
independent certified public accountants, as set forth in their report included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon these reports
given on the authority of such firms as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Sedona is subject to the informational requirements of the Securities
Exchange Act of 1934. We file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
document we file at the SEC's public reference rooms at the SEC's principal
office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the SEC's regional offices at Seven World Trade Center, 13th Floor, New York,
New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. You may obtain information on the operation of this
public reference room by calling 1-800-SEC-0330. Our SEC filings are also
available to the public from the SEC's web site at http://www.sec.gov. In
addition, any of our SEC filings may also be inspected and copied at the offices
of The Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
10
<PAGE>
We have filed with the SEC a registration statement on Form S-3
covering the securities offered by this prospectus. You should be aware that
this prospectus does not contain all of the information contained or
incorporated by reference in that registration statement and its exhibits and
schedules, particular portions of which have been omitted as permitted by the
SEC rules. For further information about Sedona and our securities, we refer you
to the registration statement and its exhibits and schedules. You may inspect
and obtain the registration statement, including exhibits, schedules, reports
and other information filed by Sedona with the SEC, as described in the
preceding paragraph. Statements contained in this prospectus concerning the
contents of any document we refer you to are not necessarily complete and in
each instance we refer you to the applicable document filed with the SEC for
more complete information.
The SEC allows us to incorporate by reference the information we file
with them, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is
considered to be part of this prospectus, and the information that we file at a
later date with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below as well as
any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934:
(a) Our annual report on Form 10-K for the fiscal year ended December
31, 1999, as amended.
(b) Our quarterly report on Form 10-Q for the quarter ended March 31,
2000.
(c) Our current report on Form 8-K filed April 25, 2000.
(d) The description of our common stock which is contained in our
registration statement on Form 8-B filed under the Securities
Exchange Act, including any amendment or reports filed for the
purpose of updating this description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Sedona Corporation, 649 North Lewis
Road, Limerick, PA 19468, Attention: Michael A. Mulshine, Corporate Secretary,
(610) 495-3003.
You should rely only upon information contained in this prospectus. We
have not authorized anyone to provide you with information or to represent
anything to you not contained in this prospectus. We are offering to sell, and
seeking offers to buy, our securities only in jurisdictions where offers and
sales are permitted.
11
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses payable by us in
connection with the sale and distribution of the securities offered in this
offering. All of the amounts shown are estimated except the Securities and
Exchange Commission registration fee.
Securities and Exchange Commission
registration fee $ 923
Printing expenses 1,000
Legal fees and expenses 25,000
Accounting fees and expenses 10,000
Miscellaneous expenses 5,000
-----------
Total $ 41,923
-----------
15. Indemnification of Officers and Directors
The Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"),
permits a corporation to indemnify its directors and officers against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by them in connection with any pending,
threatened or completed action or proceeding, and permits such indemnification
against expenses (including attorney's fees) incurred by them in connection with
any pending, threatened or completed derivative action, if the director or
officer has acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal proceeding, had no reasonable cause to believe his or her
conduct was unlawful. Pennsylvania law requires that a corporation indemnify its
directors and officers against expenses (including attorney's fees) actually and
reasonably incurred by them in connection with any action or proceeding,
including derivative actions, to the extent that such person has been successful
on the merits or otherwise in defense of the action or in defense of any claim,
issue or matter therein. Furthermore, Pennsylvania law provides that expenses
incurred in defending any action or proceeding may be paid by the corporation in
advance of the final disposition upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount if it is ultimately determined
that the director or officer is not entitled to be indemnified by the
corporation.
In Pennsylvania, the statutory provisions for indemnification and
advancement of expenses are non-exclusive with respect to any other rights, such
as contractual rights or under a by-law or vote of shareholders or disinterested
directors, to which a person seeking indemnification or advancement of expenses
may be entitled. Such contractual or other rights may, for example, under
Pennsylvania law, provide for indemnification against judgments, fines and
II-1
<PAGE>
amounts paid in settlement incurred by the indemnified person in connection with
derivative actions. Pennsylvania law permits such derivative action
indemnification in any case except where the act or failure to act giving rise
to the claim for indemnification is determined by a court to have constituted
willful misconduct or recklessness.
The provisions of Article VII of the Company's By-laws require or authorize
indemnification of officers and directors in all situations in which it is not
expressly prohibited by law. At the present time, the limitations on
indemnification would be dictated by the BCL and related legislation, which
prohibit indemnification where the conduct is determined by a court to
constitute willful misconduct or recklessness. Subject to these statutory
limitations, the By-laws specifically authorize indemnification against both
judgments and amounts paid in settlement of derivative suits. These provisions
also authorize indemnification for negligence or gross negligence and for
punitive damages and specific liabilities incurred under the federal securities
laws. The By-laws also prohibit indemnification attributable to receipt from the
Company of a personal benefit to which the recipient is not legally entitled.
Under the indemnification provisions of the By-laws a person who has
incurred an indemnifiable expense or liability would have a right to be
indemnified, and that right would be enforceable against the Company as long as
indemnification is not prohibited by law. To the extent indemnification is
permitted only for a portion of a liability, the By-laws also require the
Company to indemnify such portion.
Section 7.03 of the By-laws provides that the financial ability of a person
to be indemnified to repay an advance of indemnifiable expenses is not a
prerequisite to the making of the advance.
Section 7.06 of the By-laws provides that any dispute concerning a person's
right to indemnification or advancement of expenses thereunder will be resolved
only by arbitration by three persons, each of whom is required to have been a
director or executive officer of a corporation whose shares, during at least one
year of such service, were listed on the New York Stock Exchange or the American
Stock Exchange or were quoted on the Nasdaq system. The Company also is
obligated to pay the expenses (including attorney's fees) incurred by any person
who is successful in the arbitration. The arbitration provisions effectively
waive the Company's right to have a court determine the unavailability of
indemnification in cases involving willful misconduct or recklessness.
Section 7.07 of the By-laws provides that in circumstances in which
indemnification is held to be unavailable, the Company must contribute to the
liabilities to which a director or officer may be subject in such proportion as
is appropriate to reflect the intent of the indemnification provisions of the
By-laws. Since the foregoing provisions purport to provide partial relief to
directors and officers in circumstances in which the law or public policy is
construed to prohibit indemnification, substantial uncertainties exist as to the
enforceability of the provisions in such circumstances.
II-2
<PAGE>
Section 7.10 of the By-laws also contains provisions stating that the
indemnification rights thereunder are not exclusive of any other rights to which
the person may be entitled under any statute, agreement, vote of shareholders or
disinterested directors or other arrangement.
All future directors and officers of the Company automatically would be
entitled to the protections of the indemnification provisions of the By-laws at
the time they assume office.
Pennsylvania law permits a corporation to purchase and maintain insurance
on behalf of any director or officer of the corporation against any liability
asserted against the director or officer and incurred in such capacity, whether
or not the corporation would have the power to indemnify the director or officer
against such liability. The directors and officers of the Company are currently
covered as insureds under a directors' and officers' liability insurance policy.
16. Exhibits
Exhibit No. Description
----------- -----------
4.1 Certificate of Designations, Preferences and Rights of
Class A, Series H Convertible Preferred Stock
5.1 Opinion of Piper Marbury Rudnick & Wolfe LLP, regarding
legality of securities being registered
10.1 Series H Convertible Preferred Stock and Warrants Purchase
Agreement, dated May 5, 2000, by and between the Company and
Acxiom Corporation
10.2 Warrant to purchase shares of common stock of the Company
issued to Acxiom Corporation
10.3 Registration Rights Agreement, dated May 5, 2000, by and
between the Company and Acxiom Corporation
23.1 Consent of Ernst & Young LLP
23.2 Consent of BDO Seidman, LLP
23.3 Consent of Piper Marbury Rudnick & Wolfe LLP (included as
part of Exhibit 5.1 hereto)
24.1 Power of Attorney (included in signature page)
II-3
<PAGE>
17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(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 this 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 this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above 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 Section 15(d) of the Exchange
Act 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
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions of its Charter or By-laws or the
Pennsylvania Business Corporation Law of 1988 or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act 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 Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Limerick, Montgomery County, Commonwealth of
Pennsylvania, on the 5th day of June, 2000.
SEDONA CORPORATION
By: /s/ Marco A. Emrich
-------------------------------------
Marco A. Emrich
President and Chief Executive Officer
Each person whose signature appears below constitutes and appoints Marco A.
Emrich and Michael A. Mulshine and each of them, as his lawful attorney-in-fact
and agent, each with full power of substitution and resubstitution for him and
in his name, place and stead in any and all capacities to execute in the name of
each such person who is then an officer or director of the registrant any and
all amendments (including post-effective amendments) to this registration
statement and to file the same 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 required or necessary
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Laurence L. Osterwise Chairman of the Board of June 5, 2000
--------------------------- Directors
Laurence L. Osterwise
/s/ Marco A. Emrich President, Chief Executive June 5, 2000
--------------------------- Officer and Director (Principal
Marco A. Emrich Executive Officer)
/s/ William K. Williams Vice President and Chief June 5, 2000
----------------------- Financial Officer (Principal
William K. Williams Financial and Accounting Officer)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
Director June __, 2000
---------------------------
R. Barry Borden
/s/ Michael A. Mulshine Secretary and Director June 5, 2000
-----------------------
Michael A. Mulshine
/s/ David S. Hirsch Director June 5, 2000
-------------------
David S. Hirsch
/s/ James C. Sargent Director June 5, 2000
--------------------
James C. Sargent
Jack A. Pellicci Director June 5, 2000
----------------
Jack A. Pellicci
/s/ Robert M. Shapiro Director June 5, 2000
---------------------
Robert M. Shapiro
Director June __, 2000
---------------------------
James T. Womble
</TABLE>
<PAGE>
Exhibit Index
Exhibit No. Description
---------- -----------
4.1 Certificate of Designations, Preferences and Rights of Class
A, Series H Convertible Preferred Stock
5.1 Opinion of Piper Marbury Rudnick & Wolfe LLP, regarding
legality of securities being registered
10.1 Series H Convertible Preferred Stock and Warrants Purchase
Agreement, dated May 5, 2000, by and between the Company and
Acxiom Corporation
10.2 Warrant to purchase shares of common stock of the Company
issued to Acxiom Corporation
10.3 Registration Rights Agreement, dated May 5, 2000, by and
between the Company and Acxiom Corporation
23.1 Consent of Ernst & Young LLP
23.2 Consent of BDO Seidman, LLP
23.3 Consent of Piper Marbury Rudnick & Wolfe LLP (included as
part of Exhibit 5.1 hereto)
24.1 Power of Attorney (included in signature page)
