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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1997
Registration No. 333-36357
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON
FORM S-3
UNDER THE SECURITIES ACT OF 1933
-------------------
BORLAND INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 7372 94-2895440
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Number) Identification No.)
</TABLE>
100 BORLAND WAY
SCOTTS VALLEY, CALIFORNIA 95066-3249
(408) 431-1000
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
-------------------
HOBART MCK. BIRMINGHAM
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
BORLAND INTERNATIONAL, INC.
100 BORLAND WAY
SCOTTS VALLEY, CALIFORNIA 95066
(408) 431-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
PETER M. ASTIZ, ESQ.
Gray Cary Ware & Freidenrich
A Professional Corporation
400 Hamilton Avenue
Palo Alto, CA 94301
(650) 328-6561
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time as described in the Prospectus after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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Title of Each Class of Securities AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
to be Registered REGISTERED OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER SHARE PRICE
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<S> <C> <C> <C> <C>
Common Stock, ($.01 par value) 6,135,000 shares(1) $10.13 (2) $62,147,550 (2) $18,833 *
TOTAL
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* $18,002 of this amount has been previously paid.
(1) Includes shares issuable upon conversion of outstanding shares
of Series B Preferred Stock and shares of Series B Preferred
Stock anticipated to be issued as described in the Prospectus.
Pursuant to Rule 416, this Registration Statement also covers
such indeterminable additional shares as may become issuable
upon conversion of Series B Preferred Stock as a result of any
future stock splits, stock dividends or similar transactions.
Also includes shares issuable upon exercise of outstanding
warrants and warrants anticipated to be issued as
described in the Prospectus. Pursuant to Rule 416, this
Registration Statement also covers such indeterminable
additional shares as may become issuable upon excercise of
such warrants as a result of any future stock splits,
stock dividends or similar transactions.
(2) Estimated solely for the purpose of computing the registration
fee pursuant to Rule 457(c) of the 1933 Act and based on the
average of the high and low sales prices reported on the Nasdaq
National Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED OCTOBER 24, 1997
6,135,000 Shares
BORLAND INTERNATIONAL, INC.
COMMON STOCK
The 6,135,000 shares (the "Shares") of Common Stock of Borland
International, Inc., a Delaware corporation ("Borland" or the "Company"),
offered by this Prospectus are issuable upon conversion of issued and issuable
shares of Series B Preferred Stock of the Company (the "Series B Shares") and
upon exercise of issued and issuable warrants to purchase Common Stock (the
"Warrants"). The Shares may be sold from time to time after conversion or
exercise, as applicable, by or on behalf of the holders of Series B Shares and
Warrants (the "Selling Stockholders"). The Series B Shares and the Warrants were
issued or are issuable in connection with an equity financing pursuant to a
series of subscription agreements (the "Financing Agreements"). The Series B
Shares issued and issuable are currently convertible into approximately
5,827,000 shares of the Company's Common Stock, and the Warrants issued and
issuable are exercisable for 308,000 shares of the Company's Common Stock. The
Company will not receive any proceeds from sales of the shares by the Selling
Stockholders or from conversions, if any, of the Series B Shares. The Company
will receive the proceeds from the exercise of the Warrants, if any, and will
use such proceeds, if any, for working capital. The Company has agreed to
register the Shares under the Securities Act of 1933, as amended (the
"Securities Act"). The Company is also obligated to list such shares on the
Nasdaq National Market and to take certain actions to comply with applicable
state securities laws and regulations. See "Plan of Distribution. "
The Company has been advised by the Selling Stockholders that they
intend to sell all or a portion of the Shares from time to time in The Nasdaq
National Market, in negotiated transactions or otherwise, and on terms and at
prices then obtainable. The Selling Stockholders and any broker-dealers, agents
or underwriters that participate with the Selling Stockholders in the
distribution of any of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commission received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. The Company has
agreed to indemnify in certain circumstances the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act. The Selling
Stockholders have agreed to indemnify in certain circumstances the Company
against certain liabilities, including liabilities under the Securities Act. See
"Plan of Distribution."
The Company will bear all out-of-pocket expenses incurred in
connection with the registration of the Shares, including, without limitation,
all registration and filing fees imposed by the Securities and Exchange
Commission (the "Commission"), the National Association of Securities Dealers,
Inc. (the "NASD") and blue sky laws, printing expenses, transfer agents' and
registrars' fees, and the reasonable fees and disbursements of the Company's
outside counsel and independent accountants, but excluding underwriting
discounts or commissions, transfer or other taxes and other costs and expenses
incident to the sales of the Shares.
The Company's Common Stock is quoted on The Nasdaq National Market
under the symbol "BORL." On October 16, 1997, the last sale price of the
Company's Common Stock as reported on The Nasdaq National Market was $9.825.
________________________________
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
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.
<PAGE>
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 (if required) and other information
with the Commission. The reports, proxy statements and other information filed
by the Company with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of
the Commission located at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60611 and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can also be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Company's Common Stock is traded on The Nasdaq
National Market. Reports and other information concerning the Company can also
be inspected at the offices of the National Association of Securities Dealers,
Inc., Market Listing Section, 1735 K Street, N.W., Washington, D.C. 20006.
Such reports and other information may also be inspected without charge at a Web
site maintained by the Commission. The address of the site is
http:\\www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Borland (File No. 0-
16096) pursuant to the Exchange Act are incorporated herein by reference:
1. Report on Form 8-K filed with the Commission on September 23, 1997;
2. Quarterly Report on Form 10-Q for the three months ended June 30,
1997, filed with the Commission on August 14, 1997;
3. Report on Form 8-K/A filed with the Commission on August 5, 1997;
4. Report on Form 8-K filed with the Commission on August 5, 1997;
5. Proxy Statement with respect to Borland's Annual Meeting of
Stockholders on September 5, 1997 filed with the Commission on July
24, 1997;
6. Report on Form 8-K filed with the Commission on July 14, 1997;
7. Annual Report on Form 10-K405 for the year ended March 31, 1997,
filed with the Commission on June 30, 1997;
8. Report on Form 8-K filed with the Commission on May 12, 1997;
9. The description of Borland's Preferred Share Purchase Rights (the
"Borland's Stockholders' Rights Plan") contained in its Registration
Statement on Form 8-A filed with the Commission on December 27, 1991;
and
10. The description of Borland Common Stock contained in its Registration
Statement filed with the Commission under the Exchange Act, as
amended.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the effective date of this Registration
Statement shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents or reports. Any statement
contained in a document incorporated by reference or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement 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 supersedes such statement. Any
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<PAGE>
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement. The Company
will provide without charge to each person to whom this Registration Statement
is delivered, upon written or oral request, a copy of any or all of the
foregoing documents incorporated by reference in this Registration Statement
(other than any exhibits thereto). Requests for such documents should be
directed to Borland International, Inc. at 100 Borland Way, Scotts Valley,
California 95066 (telephone number (408) 431-1000), Attn.: Investor Relations
Department.
THE COMPANY
Borland develops, markets, and supports software development tools,
intelligent middleware, database management systems, and application management
systems for business enterprises and independent software developers. The
Company has several product lines and additional complementary products and
services that are designed to meet the needs of software developers and business
enterprises developing and using software in desktop, local area network
("LAN"), client/server and Internet/intranet environments.
The Company is organized around its major products, a family of
interoperable development tools, that include versions for desktop users,
professional developers and large business enterprises.
The Company's business strategy centers around its Golden Gate product
strategy, which was announced in the second quarter of fiscal year 1997. Golden
Gate is a strategy that encompasses all of the Company's products with the
objective of providing customers with an integrated line of development tools
that span from the desktop to the enterprise and provide a bridge between the
Microsoft and Sun/Netscape Internet standards. The strategy is designed to
allow software developers to scale applications for both centralized and
decentralized information technology ("IT") departments and to integrate legacy
computing systems, new computing systems and emerging Internet/intranet
technologies.
The Company markets and distributes its products worldwide primarily
through independent distributors, dealers, value-added resellers ("VARs") and
independent software vendors ("ISVs"). The Company also markets and sells to
corporations, governments, educational institutions and end-user customers
through direct sales and the Internet.
The principal executive offices of Borland are located at 100 Borland Way,
Scotts Valley, California 95066 and its telephone number at that location is
(408) 431-1000.
RISK FACTORS
The following risk factors should be considered in conjunction with the
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other information included and incorporated by reference in this Prospectus
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before purchasing or otherwise acquiring the Common Stock offered hereby. This
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Prospectus contains forward-looking statements within the meaning of Section 27A
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of the Securities Act and Section 21E of the Securities Exchange Act. Actual
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results could differ materially from those projected in these forward-looking
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statements as a result of a variety of factors, including those set forth below
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and elsewhere in this Prospectus.
- --------------------------------
Continuing Operating Losses. The Company experienced substantial operating
---------------------------
losses in each of the four quarters in fiscal year 1997 and a net loss of $108
million for fiscal year 1997. The Company also experienced operating losses for
the four fiscal years ended March 31, 1995. Although the Company recorded a
small operating profit for the quarter ended June 30, 1997, the Company's
ability to continue or increase profitability will be substantially dependent
upon its ability to successfully complete and introduce new products, to
successfully implement restructuring and cost control measures adopted during
fiscal year 1997 and to stem the loss of management and other key personnel.
There can be no assurance that the Company will be able to successfully
accomplish the foregoing or to continue or increase profitability in future
periods. The Company believes that its existing capital resources will enable
it to fund its operations through at least the end of fiscal year 1998. In the
event that the Company is unable to generate adequate cash flow prior to that
time, the Company will be required to seek additional sources of capital, which
could result in dilution to the investors of the Company's
3
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Common Stock. There can be no assurance that the Company will be able to obtain
such capital on acceptable terms or at all.
Restructurings. In response to the significant losses from operations, the
--------------
Company implemented restructurings and realignments of its operations in October
1996 and in February 1997. These restructurings resulted in significant
reductions in workforce and other ongoing costs. Given the extent of the
restructurings which the Company has undertaken, there can be no assurance that
the remaining resources are sufficient for the Company to return to revenue
growth or profitability, nor can there be any assurance that the Company will
realize the cost savings which the restructurings have been designed to produce.
Dependence on Key Personnel and Changes in Management. The success of
-----------------------------------------------------
the Company depends in large part upon the ability of the Company to recruit and
retain qualified employees, particularly highly skilled engineers. The
competition for such personnel is intense, and there can be no assurance that
the Company will be successful in retaining or recruiting such personnel.
During fiscal year 1997, certain management, engineers and other key personnel
were hired away by competitors who offered very substantial signing bonuses and
compensation packages that would have been very difficult for the Company to
match. There can be no assurance that the Company will not be subject to
further losses of management, engineers and other key personnel. In addition,
the Company has had and may continue to be required to substantially increase
the compensation, stock options or other benefits offered to employees in order
to attract and retain management, engineers and other key personnel. The loss
of management, engineering and other key personnel, and the delays which may be
experienced in recruiting such personnel as well as the additional costs which
may be incurred in retaining or attracting new personnel, may have a material
adverse effect on the Company, its product releases and its operating results.
Significant Fluctuations in Quarterly Operating Results and Seasonality.
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The Company's quarterly operating results have varied significantly in the past
and the Company expects that such results are likely to vary significantly from
time to time in the future. Such variations result from, among other matters,
the following: the size and timing of significant orders and their fulfillment;
demand for the Company's products; the number, timing and significance of
product enhancements and new product announcements by the Company and its
competitors; changes in pricing policies by the Company or its competitors;
changes in the level of operating expenses; changes in the Company's sales
incentive plans; budgeting cycles of its customers; customer order deferrals in
anticipation of enhancements or new products offered by the Company or its
competitors; product life cycles; product defects and other product quality
problems; personnel changes; seasonal trends and general domestic and
international economic and political conditions. Operating results can also be
adversely impacted by deferrals of customer orders in light of customer
uncertainty regarding the Company's short- and long-term prospects. As an
increasing percentage of the Company's revenues are from client/server products,
the Company expects that an increasing percentage of its revenues will be from
large orders. The timing of such orders and their fulfillment may cause
material fluctuations in the Company's operating results, particularly on a
quarterly basis. In addition, the Company intends to continue to expand its
domestic and international direct sales force. The timing of such expansion and
the rate at which new sales people become productive could also cause material
fluctuations in the Company's quarterly operating results.
Due to the foregoing factors, quarterly revenues and operating results are
difficult to forecast. Revenues are also difficult to forecast because the
market for client/server application development software is rapidly evolving,
and the Company's sales cycle for client/server products, from initial
evaluation to purchase and the provision of support services, is lengthy and
varies substantially from customer to customer. Because the Company normally
ships products within a short time after it receives an order, it typically does
not have any material backlog. As a result, to achieve its quarterly revenue
objectives, the Company is dependent upon obtaining orders in any given quarter
for shipment in that quarter. Furthermore, because many customers place orders
toward the end of a quarter, the Company generally recognizes a substantial
portion of its revenues at the end of a quarter. As the Company's expense
levels are based in significant part on the Company's expectations as to future
revenues and are therefore relatively fixed in the short term, if revenue levels
fall below expectations, operating results are likely to be disproportionately
adversely affected. There can be no assurance that the Company will be able to
4
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achieve or maintain profitability on a quarterly or annual basis in the future.
Due to the foregoing factors, it is likely 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 market price of the Company's Common
Stock would likely be materially adversely affected.
New Business Areas. The Company's revised strategy is to focus on software
------------------
developers and the growth of the client/server and Internet/intranet markets.
The Company's relatively recent entry into these markets is subject to a number
of risks, including among others, the Company's inexperience in these markets;
the markets themselves are new and evolving; the Company must make choices
regarding the operating systems, database management systems and server software
to focus upon; the ongoing transition of and investment of resources for this
segment by the Company; the Company's credibility in this area; and, there are
several very large and well-established businesses, as well as a number of
smaller very successful companies already competing in this market. There can be
no assurance that the sales in these markets will meet the Company's
expectations, in which case the Company's business, operating results and
financial condition could be materially adversely affected.
Anticipated Decline in Revenue from Desktop Database Products. Most of
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the Company's revenues to date have been attributable to its desktop products.
Revenues derived from desktop products accounted for approximately 58% and 73%
of total revenues for the Company in fiscal years 1997 and 1996, respectively.
Revenues derived from the sale of these products, particularly the Company's
desktop database products, have declined over the last three fiscal years. The
decline in revenues has been due to a number of factors, including, among
others, the success of product "suites" offered by competitors which have had an
adverse impact on the sale of individual products; the sale by the Company of
its Quattro Pro and Paradox product lines; and continued competitive pricing
pressures that have resulted in lower average sales prices for desktop products.
While the Company expects such decline to continue, revenues from the sales of
such products currently continue to represent an important portion of the
Company's revenues. Although the Company is continuing to invest in the
development, sales, marketing and support of such products on a limited basis,
there can be no assurance that revenues from such products will not decline
faster than expected. If revenues from such products decline materially or at a
more rapid rate than the Company currently anticipates, the Company's business,
operating results and financial condition would be materially adversely
affected.
Dependence on Third-Party Licenses. The Company is dependent on licenses
----------------------------------
from third-party suppliers for certain of its products. In particular, the
Company is dependent upon certain licenses from Microsoft Corporation which is
both a licensor to the Company and its most significant competitor. If any such
third-party licenses were terminated or not renewed or if these third parties
fail to develop new products in a timely manner, the Company could be required
to develop an alternative approach to developing its products which could
require payment of substantial fees to third parties or additional internal
development costs and delays and such products may not be successful in
providing the same level of functionality. Such delays, increased costs or
reduced functionality could materially adversely affect the Company's business,
operating results and financial condition.
New Product Introductions. The Company's future sales will depend
-------------------------
substantially on its ability to continue to successfully design and market new
products and upgrades of current products for existing and new personal computer
platforms and operating environments. As a result of various factors, there can
be no assurance that sales of such new products and versions will meet the
Company's expectations. For example, the Company may introduce certain of such
products later to market than expected or later to market than competitors'
introductions, or competitors may introduce competitive products at lower
prices. In addition, the acceptance of the Company's new products, the
acceptance of the Windows 95/NT operating systems, the Internet as a new
computing paradigm and the Java programming language, may adversely affect such
sales.
From time to time the Company makes announcements to its customers with
respect to the time frames within which the Company expects to ship new
products. Such announcements are for the purpose of providing its customers
with a general idea of the expected availability of products for planning
purposes based only upon estimates and are not a prediction by the Company of
the exact availability of such products. In the past, certain of the Company's
products shipped later, and in some cases substantially later, than the time
frame within which the
5
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Company originally anticipated that the products would be available. Due to the
inherent uncertainties of software development, it is likely that such
situations will occur from time to time in the future as well. Moreover, the
loss of key employees may increase the risk of delays in product availability
from time frames originally anticipated. Consequently, announcements regarding
the Company's expectations of when products may ship should not be considered a
prediction by the Company that the products will ship in any particular quarter
or otherwise be relied upon by investors as a basis for predicting the Company's
results for any future period. Delays in the shipment of such products and
product enhancements will have a material adverse impact on the Company. Without
the introduction of such new products and product enhancements, the Company's
products may become technologically obsolete, and as a result the Company's
business, operating results and financial condition could be materially
adversely affected. There can be no assurance that the future development and
marketing efforts by the Company will be successful.
Evolving Market. In light of the changing market in which the Company
---------------
competes, it is uncertain whether the Company's historical product life cycle
will continue. The Company has, in the past, experienced declining sales of
certain of its products in anticipation of the release of new products.
Furthermore, the Company cannot determine whether the increasing price
competition in the industry, the timing of competitors' product releases or
other factors will have an adverse effect upon the product upgrade revenue that
has historically been a significant component of the Company's revenue. Finally,
a greater portion of the Company's revenues are being derived from client/server
sales that are characterized by long sales cycles and increased transaction
values. As a result, such revenues may be subject to increased variability over
time.
Extreme Volatility of Stock Price. Like the stock of other high
---------------------------------
technology companies, the market price of the Company's Common Stock has been
and may continue to be extremely volatile. During the past three fiscal years,
the market price of the Company's Common Stock has ranged from a high of $20.88
to a low of $4.75. Factors such as quarterly fluctuations in the Company's
results of operations, the announcement of technological innovations or the
introduction of new products by the Company or its competitors, and general
conditions in the computer hardware and software industries may have a
significant impact on the market price of the Company's Common Stock.
Extremely Competitive Industry. The software industry is extremely
------------------------------
competitive. The Company competes with a number of other companies, including
Microsoft Corporation ("Microsoft"), Computer Associates International, Inc.,
Oracle Corporation, Sybase Corporation and Symantec Corporation. Certain of its
competitors have substantially greater financial, management, marketing and
technical resources than the Company. In recent months competitors have
utilized their greater resources to provide substantial signing bonuses and
other inducements to lure away the Company's management and other key personnel.
In addition, Microsoft is the developer of the Windows operating environments.
To the extent that the Company is unable to obtain information regarding
existing and future operating systems from the developer of such systems, the
release of the Company's products for such systems may be delayed. Increased
competition could result in price reductions, fewer customer orders, reduced
gross margins and loss of market share, any one of which could materially
adversely affect the Company's business, operating results and financial
condition. In addition, current and potential competitors may make strategic
acquisitions or establish cooperative relationships, thereby increasing the
ability of their products to address the needs of the Company's current and
prospective customers. Accordingly, it is possible that new competitors may
emerge, or alliances among current and new competitors may be formed, that may
rapidly gain significant market share. Such competition could materially
adversely affect the Company's ability to sell additional licenses and
maintenance and support renewals on terms favorable to the Company. Furthermore,
competitive pressures could require the Company to reduce the price of its
products and related services, which could materially adversely affect the
Company's business, operating results and financial condition. There can be no
assurance that the Company will be able to compete successfully against current
and future competition, and the failure to do so would have a material adverse
effect upon the Company's business, operating results and financial condition.
Risks Associated with International Operations and Sales. Revenues derived
--------------------------------------------------------
from international operations accounted for approximately 59%, 45% and 43% of
total revenues for the Company in fiscal year 1997,
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1996 and 1995, respectively. There are certain risks inherent in doing business
on an international level, such as unexpected changes in regulatory
requirements, export restrictions, tariffs and other trade barriers,
difficulties in staffing and managing foreign operations, longer payment cycles,
problems in collecting accounts receivable, political instability, fluctuations
in currency exchange rates, seasonal reductions in business activity during the
summer months in Europe and certain other parts of the world and potentially
adverse tax consequences, any of which could adversely impact the success of the
Company's international operations. The Company's foreign subsidiaries operate
in local currencies, and their results are translated into US dollars. If the
value of the US dollar increases relative to foreign currencies, the Company's
results of operations could be materially adversely affected. There can be no
assurance that one or more of such factors will not have a material adverse
effect on the Company's future international operations and, consequently, on
the Company's business, operating results and financial condition.
Anti-takeover Provisions. The Company's Stockholders' Rights Plan and
------------------------
certain provisions of the Company's Certificate of Incorporation may discourage
or prevent certain types of transactions involving an actual or potential change
in control of the Company, including transactions in which the stockholders
might otherwise receive a premium for their shares over then current market
prices, and may limit the ability of stockholders to approve transactions that
they may deem to be in their best interests. In addition, the Company's Board
of Directors has the authority to fix the rights and preferences of and issue
shares of Preferred Stock without action by the stockholders, which may have the
effect of delaying or preventing a change in control of the Company.
Software Defects and Liability Claims. Software products frequently
-------------------------------------
contain errors or defects, especially when first introduced or when new versions
or enhancements are released. Although the Company has not experienced any
material adverse effects resulting from any such defects or errors to date,
there can be no assurance that, despite testing by the Company and by current
and potential customers, defects and errors will not be found in current
versions, new versions or enhancements after commencement of commercial
shipments, resulting in the loss of revenues, delay in market acceptance or
unexpected reprogramming costs, which could have a material adverse effect upon
the Company's business, operating results and financial condition.
The Company's license agreements with its customers typically contain
provisions designed to limit the Company's exposure to potential product
liability claims. It is possible, however, that the limitation of liability
provisions contained in the Company's license agreements may not be effective as
a result of existing or future federal, state or local laws or ordinances or
unfavorable judicial decisions. A successful product liability claim brought
against the Company could have a material adverse effect upon the Company's
business, operating results and financial condition.
Intellectual Property Rights. The Company relies on a combination of
----------------------------
patent, copyright, trademark and trade secret laws, non-disclosure agreements
and other intellectual property protection methods to protect its proprietary
technology. Despite the Company's efforts to protect its proprietary rights,
unauthorized parties may copy aspects of the Company's products or obtain and
use information that the Company regards as proprietary. Policing unauthorized
use of the Company's products is difficult, and while the Company is unable to
determine the extent to which piracy of its software products exists, software
piracy can be expected to be a persistent problem. In addition, the laws of some
foreign countries do not protect the Company's proprietary rights as fully as do
the laws of the United States. There can be no assurance that the Company's
means of protecting its proprietary rights in the United States or abroad will
be adequate or that competitors will not independently develop similar
technology.
Although there are no pending material lawsuits against the Company
regarding infringement of any existing patents or other intellectual property
rights or any material notices that the Company is infringing the intellectual
property rights of others, there can be no assurance that such infringement
claims will not be asserted by third parties in the future. If any such claims
are asserted and determined to be valid, there can be no assurance that the
Company will be able to obtain licenses of the intellectual property rights in
question on reasonable terms. The Company's involvement in any patent dispute or
other intellectual property dispute or action to protect proprietary rights may
have a material adverse effect on the Company's business, operating results and
financial condition. Adverse determinations in any litigation may subject the
Company to significant liabilities to third parties, require
7
<PAGE>
the Company to seek licenses from third parties and prevent the Company from
manufacturing and selling its products. Any of these situations can have a
material adverse effect on the Company's business, operating results and
financial condition.
Potential Dilutive Effect of Conversion of Series B Preferred Stock. The
-------------------------------------------------------------------
number of shares of Common Stock which may be issued upon conversion of the
Series B Shares is dependent upon the trading price of the Company's Common
Stock at the time of conversion. To the extent that the trading price of the
Common Stock is lower than $6.94 per share at the time of any conversion of the
currently outstanding Series B Shares, the number of shares of Common Stock
issuable upon such conversion will increase with resulting dilution to the
holders of the Company's Common Stock. The Financing Agreements also provide for
the issuance of additional Series B share and Warrants, subject to certain
conditions. Issuance of such additional shares and warrants will result in
additional dilution to the holders of the Common Stock.
Risks Associated with Potential Acquisitions. As a part of its business
--------------------------------------------
strategy, the Company expects to review acquisition prospects that would
complement its existing product offerings, augment its market coverage or
enhance its technological capabilities, or that may otherwise offer growth
opportunities. While the Company has no current agreements or negotiations
underway with respect to any such acquisitions, the Company may make
acquisitions of businesses, products or technologies in the future. Future
acquisitions by the Company could result in potentially dilutive issuances of
equity securities, the incurrence of debt and contingent liabilities and
amortization expenses related to goodwill and other intangible assets, any of
which could materially adversely affect the Company's operating results and/or
the market price of the Company's Common Stock. Acquisitions entail numerous
risks, including difficulties in the assimilation of acquired operations,
technologies and products, diversion of management's attention to other business
concerns, risks of entering markets in which the Company has no or limited prior
experience and potential loss of key employees of acquired organizations. No
assurance can be given as to the ability of the Company to successfully
integrate any businesses, products, technologies or personnel that might be
acquired in the future, and the failure of the Company to do so could have a
material adverse effect on the Company's business, financial condition and
operating results.
Legal Proceedings. The Company is a party to two lawsuits alleging certain
-----------------
securities law violations by the Company and certain of its officers and
directors. Both lawsuits purport to represent a class of investors who purchased
or otherwise acquired the Company's Common Stock. Three lawsuits have been filed
against the Company's subsidiary, Open Environment Corporation ("OEC"), and
certain former officers and directors of OEC, alleging violations of federal
securities laws prior to the Company's acquisition of OEC. There can be no
assurance of the ultimate outcome of any of these matters or that the Company's
business, financial condition or operating results will not be materially
adversely affected as a result of such lawsuits.
The Company is involved in various other legal actions arising in the
normal course of business. Due to the inherent uncertainties of litigation, the
outcome of any of these actions could be unfavorable, and the Company may choose
to make payments, or enter into other arrangements, to settle such actions or
may be required to pay damages or other expenses. Such an outcome in certain of
these matters could have a material adverse effect on the Company's financial
condition or results of operations. The computer industry has been subject to a
substantial amount of intra-industry litigation in recent years regarding, among
other matters, the extent of patent, copyright and intellectual property
protection available for software products. Such actions can require the
expenditure of substantial management time and financial resources and can
adversely affect the financial performance of the companies involved. There can
be no assurance that the Company will not be a party to other such litigation in
the future.
8
<PAGE>
SELLING STOCKHOLDERS
The table below sets forth (a) the names of the Selling Stockholders, (b)
the number of Series B Shares which each owns plus the number of Series B Shares
anticipated to be issued to such Selling Stockholder at the Second Closing (as
defined below) and upon exercise of the Selling Stockholder Call Option (as
defined below), (C) the number of shares of Common Stock which could be acquired
upon conversion of such Series B Shares (the "Conversion Shares") and (d) the
number of shares of Common Stock that could be acquired upon exercise of
Warrants held by such Selling Shareholder and upon exercise of Warrants
anticipated to be issued to such Selling Stockholder at the Second Closing and
upon exercise of the Selling Stockholder Call Option (the "Warrant Shares"). The
Conversion Shares and the Warrant Shares are collectively referred to
hereinafter as the "Shares."
<TABLE>
<CAPTION>
Selling Stockholders Series B Conversion Warrant
Shares Shares Shares
<S> <C>
Olympus Securities, Ltd. 140.0 1,059,454 42,000
Nelson Partners 140.0 1,059,454 42,000
Samyang Merchant Bank 35.0 264,864 10,500
Themis Partners L.P. 18.2 137,729 7,280
Heracles Fund 16.8 127,135 6,720
Colonial Penn Life Insurance 28.0 211,891 8,400
Colonial Penn Insurance 28.0 211,891 8,400
Gleneagles Fund, Ltd. 28.0 211,891 8,400
Halifax Fund, L.P. 196.0 1,483,236 58,800
Angelo, Gordon & Co., L.P. 14.0 105,945 4,200
Raphael, L.P. 19.6 148,324 5,880
Michaelangelo, L.P. 16.8 127,135 5,040
AG ARB Partners, L.P. 11.2 84,756 3,360
Nutmeg Partners, L.P. 11.2 84,756 3,360
AG Super Fund, L.P. 14.0 105,945 4,200
GAM Arbitrage Investments 16.8 127,135 5,040
AG Super Fund Intl. Partners 14.0 105,945 4,200
The Northern Trust Co. 2.8 21,189 840
AG Long-Term Super Fund 11.2 84,756 3,360
PHS Bay Colony Fund 2.8 21,189 840
PHS Patriot Fund 2.8 21,189 840
AGD, LLC 2.8 21,189 840
Promethean Investment Group, LLC -- -- 73,500
Totals 770.0 5,827,000 308,000
</TABLE>
PLAN OF DISTRIBUTION
On June 30, 1997, the Company completed the initial closing (the "Initial
Closing") of an equity financing pursuant to a series of subscription agreements
(the "Financing Agreements"). The Financing Agreements contemplate several
closings in connection with the sale of Series B Shares and Warrants which are
subject to various conditions. At the Initial Closing, the Company raised
proceeds of approximately $25 million through the sale of 495 Series B Shares
and Warrants to purchase up to 198,000 shares of the Company's Common Stock.
Subject to various conditions, including the effectiveness of this Registration
Statement, the Financing Agreements provide for the issuance of an additional 55
Series B Shares and Warrants to purchase 22,000 shares of the Company's Stock
which is to be made at a second closing and on the same terms applicable at the
Initial Closing (the "Second Closing"). The Financing Agreements also provide
that at any time from June 30, 1998 through June 30, 2000, each purchaser at the
First Closing and Second Closing (each a "Selling Stockholder") has the right
(the "Selling Stockholder Call Option") to require the Company to issue for
every five (5) unconverted Series B Shares held by such Selling Stockholder at
June 30, 1998 (or such earlier date as there has been a mandatory conversion as
described below), up to two (2) Series B Shares along with a pro-rata share of
Warrants. Such right may be exercised only at such time(s) that the closing
market price of the Company's Common Stock is greater than $8.00 per share and
is otherwise subject to the same terms and conditions as apply to the Second
Closing.
TERMS OF THE SERIES B PREFERRED STOCK
The Series B Shares are convertible into shares of Common Stock, at the
election of the holder of such Series B Shares, at a price (the "Conversion
Rate") equal to the lower of the market price at the original date of issuance
of such share (the "Initial Price") or the market price when a holder of Series
B Shares delivers notice of his election to convert such shares ("Notification
Date"). "Market price" is generally determined by the closing price for the
Company's Common Stock on the applicable date.
Subject to conditions specified below, the Selling Stockholders may
convert, in aggregate, up to a maximum of a specified percentage of the Series B
Shares according to the following schedule:
Days from Closing % of Series B Shares Convertible
1 through 45 0
46 through 90 20
91 through 135 40
136 through 180 60
181 through 225 80
greater than 225 100
The above limitations on conversion would be eliminated (i) during any Forced
Conversion Period (as hereinafter defined) and/or (ii) for any conversions at an
effective Conversion Rate which is greater than the Conversion Rate applicable
when the shares were originally issued, as adjusted in accordance with the
Certificate of Determination filed for the Series B Shares.
Any Series B Shares outstanding five years after the date such shares were
initially issued would automatically convert into shares of the Company's Common
Stock at the then applicable Conversion Rate. The Conversion Rate is subject to
proportional adjustment upon any stock split, stock dividend or other similar
change to the capital stock of the Company. Upon an acquisition of the Company
involving a sale of all or substantially all of the assets of the Company and
upon a merger, consolidation or other corporate reorganization of the Company
which results in the transfer of more than 50% of the voting power of the
Company, the holders of the Series B Shares will be treated as if they had
converted such shares immediately prior to the consummation of such transaction.
9
<PAGE>
Following at least (i) 90 calendar days of effectiveness of this
Registration Statement and (ii) 20 consecutive trading days during which the
closing market price of the Company's Common Stock is no less than twice the
Initial Price, the Company may elect to deliver a mandatory conversion notice to
all holders of Series B Shares ("Forced Conversion Notice"). Upon receipt of a
Forced Conversion Notice, each Selling Stockholder would be required to convert
any and all Series B Shares held by such Selling Stockholder within the 30
calendar days immediately following receipt of such Forced Conversion Notice
("Forced Conversion Period").
A Forced Conversion Notice would be deemed null and void, however, if at
any time during the Forced Conversion Period, (i) the Company's Common Stock
trades at a market price which is less than 85% of the closing market price on
the day such Forced Conversion Notice is delivered, (ii) the Company's Common
Stock is suspended from trading, (iii) the effectiveness of this Registration
Statement is suspended, and/or (iv) the Company is in material breach of the
Financing Agreements.
Upon at least 20 trading days' written notice, the Company may elect to
redeem, on the date which is the second, third or fourth anniversary of
effectiveness of this Registration Statement, all of the Series B Shares which
remain outstanding on the date which is the second anniversary of effectiveness
of this Registration Statement, at 110% of par. Subject to certain conditions,
the Company also has a right to call for redemption if the Conversion Rate is
less than $6 per share.
The Company is obligated to use its reasonable best efforts to have this
Registration Statement declared effective by the SEC and remain effective until
the Company's Common Stock subject to the Registration Statement may otherwise
be freely traded without registration. The Company is also obligated to list
such shares on the Nasdaq National Market and to take certain actions to comply
with applicable state securities laws and regulations.
TERMS OF THE WARRANTS
For each Series B Share purchased by a Selling Stockholder, the Company is
obligated to grant to such Selling Stockholder Warrants to purchase 400 shares
of the Company's Common Stock. The Warrants have a four year term and an
exercise price equal to 125% of the market price for the Company's Common Stock
at the original date of issuance of such Warrants. The terms of exercise of the
Warrant are subject to customary adjustments on stock splits, stock dividends,
any merger or acquisition involving the Company and similar transactions, such
as to permit the Selling Stockholder to receive upon exercise of the Warrants
that which they would have received had they exercised the Warrants immediately
prior to any such transaction.
SALES BY SELLING STOCKHOLDERS
Any or all of the Shares may be sold from time to time to purchasers
directly by any of the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer the Shares through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of Shares for whom they may act as agents. The Selling Stockholders
and any such underwriters, dealers or agents that participate in the
distribution of Shares may be deemed to be underwriters, and any profit on the
sale of the Shares by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. The Shares may be sold from time to time in one or
more transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. The Selling
Stockholders may from time to time enter into hedging transactions with respect
to the Shares.
At the time a particular offer of Shares is made, to the extent required, a
supplement to this Prospectus will be distributed which will identify and set
forth the aggregate amount of Shares being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
the purchase price paid by any underwriter for Shares purchased from the Selling
Stockholders, any discounts, commissions and other items constituting
compensation from the Selling Stockholders and/or the Company, and any
discounts, commissions or concessions allowed or reallowed or paid to dealers,
including the proposed selling price to the public. The Company will not
receive any of the proceeds from the sale by the Selling Stockholders of the
Shares offered hereby.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not simultaneously engage in market
making activities with respect to the Shares for a period of one business day
prior to the commencement of such distribution. In addition, and without
limiting the foregoing, the Selling Stockholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder
including, without limitation, Regulation M, which provisions may limit the
timing of purchases and sales of the Shares by the Selling Stockholders.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states the Shares may not be sold unless the
Shares have been registered or qualified for sale in such state, or unless an
exemption from registration or qualification is available and is obtained.
The Company has agreed to indemnify in certain circumstances the Selling
Stockholders and the broker-dealers who may be deemed to be the underwriters (if
any) of the securities covered by this Registration Statement against certain
liabilities, including liabilities under the Securities Act. The Selling
Stockholders have agreed to indemnify in certain circumstances the Company
against certain liabilities, including liabilities under the Securities Act.
USE OF PROCEEDS
The Company will receive the proceeds of exercise of the Warrants, if any,
and will use such proceeds, if any, for working capital. The Company will not
receive any proceeds from sales of the Shares or from conversions of the Series
B Shares, if any.
10
<PAGE>
LEGAL MATTERS
The legality of the Shares is being passed upon by Gray Cary Ware &
Freidenrich, A Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus, except as they relate to the unaudited three month periods ended
June 30, 1997 and 1996, have been audited by various independent accountants.
The companies and periods covered by these audits are indicated in the
individual accountants' reports. Such consolidated financial statements have
been so incorporated by reference in reliance on the reports of the various
independent accountants given on the authority of such firms as experts in
auditing and accounting.
11
<PAGE>
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN,
AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED 6,135,000 Shares
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY SELLING STOCKHOLDER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES BORLAND INTERNATIONAL, INC.
OTHER THAN THE REGISTERED SECURITIES TO
WHICH IT RELATES, OR AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO
BUY, IN ANY JURISDICTION IN WHICH IT IS COMMON STOCK
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
----------------------
TABLE OF CONTENTS PROSPECTUS
----------------------
PAGE
----
Available Information................... 2
Incorporation of Certain
Documents by Reference................ 2
The Company............................. 3
Risk Factors............................ 3
Selling Stockholders....................
Plan of Distribution.................... 9
Use of Proceeds......................... 10
Legal Matters........................... 11
Experts................................. 11 _________________, 1997
- --------------------------------------------
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses in connection with the
sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fees and Nasdaq
filing fee.
To be Paid
By The
Registrant
----------
SEC Registration Fee............................ $ 18,002
Nasdaq filing fee............................... 17,500
Accounting fees and expenses.................... 75,000
Legal fees and expenses......................... 15,000
Miscellaneous expenses.......................... 4,998
Total $130,500
========
The Company will pay all expenses of registration, issuance and
distribution of the shares being sold by the Selling Stockholders, excluding
underwriting commissions and similar charges.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law (the
"DGCL"), the Registrant's Certificate of Incorporation provides that each person
who is or was or who had agreed to become a director or officer of the
Registrant or who had agreed at the request of the Registrant's Board of
Directors or an officer of the Registrant to serve as an employee or agent of
the Registrant or as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall be
indemnified by the Registrant to the full extent permitted by the DGCL or any
other applicable laws. Such Certificate of Incorporation also provides that the
Registrant may enter into one or more agreements with any person which provides
for indemnification greater or different than that provided in such Certificate,
and that no amendment or repeal of such Certificate shall apply to or have any
effect on the right to indemnification permitted or authorized thereunder for or
with respect to claims asserted before or after such amendment or repeal arising
from acts or omissions occurring in whole or in part before the effective date
of such amendment or repeal.
The Registrant's Bylaws provide that the Registrant shall indemnify to the
full extent authorized by law any person made or threatened to be made a party
to an action or a proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he, his testator or intestate was or
is a director, officer or employee of the Registrant or any predecessor of the
Registrant or serves or served any other enterprise as a director, officer or
employee at the request of the Registrant or an predecessor of the Registrant.
The Registrant has entered into indemnification agreements with its
directors and certain of its officers.
The Registrant intends to purchase and maintain insurance on behalf of any
person who is a director or officer against any loss arising from any claim
asserted against him and incurred by him in any such capacity, subject to
certain exclusions.
See also the undertakings set out in response to Item 17 herein.
II-1
<PAGE>
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement:
<TABLE>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
3.1* Certificate of Designation for Series B Preferred Stock
10.1* Form of Convertible Securities Subscription Agreement for Series B
Preferred Stock
10.2* Form of Registration Rights Agreement for Series B Preferred Stock
5.1** Opinion of Gray Cary Ware & Freidenrich, A Professional Corporation.
23.1 Consent of Price Waterhouse LLP, independent accountants.
23.2 Consent of Ernst & Young LLP, independent auditors.
23.3 Consent of Chartered Accountants for Jarrah Technologies, Ltd.
23.4** Consent of Gray Cary Ware & Freidenrich, A Professional Corporation
(included in Exhibit 5.1).
24.1** Power of Attorney (included in the Signature Page contained in Part II
of the Registration Statement).
</TABLE>
- --------------------
* Filed as an exhibit to the Company's Report on Form 8-K filed on July 14,
1997 and incorporated herein by reference.
** Previously filed with Registration Statement No. 333-36357 on September 25,
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 (the "Securities Act");
(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.
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% 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 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
II-2
<PAGE>
pursuant to Section 13 or Section 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, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
D. 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 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
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.
E. The undersigned Registrant hereby undertakes that:
(1) For the purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the registration
statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Scotts Valley, State of
California on the 24th day of October, 1997.
Borland International, Inc.
By: /s/ KATHLEEN FISHER
----------------------------------
Kathleen Fisher
Vice President, Finance and Chief
Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE Title Date
<S> <C> <C>
DELBERT YOCAM* Chairman and Chief Executive Officer October 24, 1997
- ----------------------------------------------------- (Principal Executive Officer)
Delbert Yocam
/s/ KATHLEEN FISHER Vice President, Finance and Chief October 24, 1997
- ----------------------------------------------------- Financial Officer (Principal Financial and
Kathleen Fisher Principal Accounting Officer)
Director
- -----------------------------------------------------
George Hara
STEPHEN J. LEWIS* Director October 24, 1997
- -----------------------------------------------------
Stephen J. Lewis
DAVID HELLER* Director October 24, 1997
- -----------------------------------------------------
David Heller
WILLIAM F. MILLER* Director October 24, 1997
- -----------------------------------------------------
William F. Miller
HARRY J. SAAL* Director October 24, 1997
- -----------------------------------------------------
Harry J. Saal
*By /s/ KATHLEEN FISHER October 24, 1997
_________________________________________________
Kathleen Fisher, Attorney-in-Fact
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<S> <C>
3.1* Certificate of Designation for Series B Preferred Stock
10.1* Form of Convertible Securities Subscription Agreement for Series B
Preferred Stock
10.2* Form of Registration Rights Agreement for Series B Preferred Stock
5.1** Opinion of Gray Cary Ware & Freidenrich, A Professional Corporation.
23.1 Consent of Price Waterhouse LLP, independent accountants.
23.2 Consent of Ernst & Young LLP, independent auditors.
23.3 Consent of Chartered Accountants for Jarrah Technologies, Ltd.
23.4** Consent of Gray Cary Ware & Freidenrich, A Professional Corporation
(included in Exhibit 5.1).
24.1** Power of Attorney (included in the Signature Page contained in Part II
of the Registration Statement).
</TABLE>
- ------------------------
* Filed as an exhibit to the Company's Report on Form 8-K filed on July 14,
1997 and incorporated herein by reference.
** Previously filed with Registration Statement No. 333-36357 on September 25,
1997.
II-5
<PAGE>
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3/A of our report
dated April 29, 1997, except for the first and fourth paragraphs of Note 12
which are as of May 29, 1997 and Note 14 which is as of June 30, 1997, appearing
on page 30 of Borland International, Inc.'s Annual Report on Form 10-K for the
year ended March 31, 1997. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
San Jose, California
October 20, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement on Form S-3 and related
Prospectus of Borland International, Inc. for the registration of 6,135,000
shares of its common stock and to the incorporation by reference therein of
our report dated March 27, 1996, except as to the fourth paragraph of Note 1,
as to which the date is October 4, 1996, with respect to the consolidated
financial statements of Open Environment Corporation, not separately
presented, included in Borland International, Inc.'s Annual Report (Form 10-K)
for the year ended March 31, 1997, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
October 20, 1997
<PAGE>
EXHIBIT 23.3
Consent of Chartered Accountants for Jarrah Technologies, Ltd.
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3/A of our report
dated September 3, 1996, appearing on page 32 of Borland International, Inc.'s
Annual Report on Form 10-K for the year ended March 31, 1997. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/ William Buck & Company
Sydney, Australia
October 24, 1997
