<PAGE>
Registration No. 333-27007
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Dataware Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1232140
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
222 Third Street, Suite 3300
Cambridge, Massachusetts 02142
(617) 621-0820
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
DANIEL M. CLARKE
Vice President, Finance and Administration
DATAWARE TECHNOLOGIES, INC.
222 Third Street, Suite 3300
Cambridge, Massachusetts 02142
(617) 621-0820
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
MATTHEW C. DALLETT
PALMER & DODGE LLP
One Beacon Street
Boston, Massachusetts 02108
(617) 573-0100
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or 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 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 number of the earlier effective registration statement for the same
offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
Subject to Completion, Dated May 19, 1997
1,560,256 Shares
DATAWARE TECHNOLOGIES, INC.
Common Stock
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This Prospectus relates to the offer and sale of up to 1,560,256 shares (the
"Shares") of Common Stock, $0.01 par value per share (the "Common Stock"), of
Dataware Technologies, Inc. ("Dataware" or the "Company") by existing
stockholders of the Company (the "Selling Stockholders"). The shares of Common
Stock covered by this Prospectus were or will be issued to the Selling
Stockholders (i) upon conversion of shares of Series B Convertible Preferred
Stock issued pursuant to a private placement completed on April 14, 1997
pursuant to an exemption from the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act") or in payment of dividends on
shares of Series B Convertible Preferred Stock; (ii) in a private placement of
100,000 shares of Common Stock made in connection with the acquisition of
Ntergaid, Inc. by Dataware through a merger completed on July 31, 1996; and
(iii) upon exercise of outstanding Common Stock Purchase Warrants. The Shares
are being registered by the Company pursuant to registration rights granted to
the Selling Stockholders in connection with these transactions. The shares of
Common Stock offered by certain of the Selling Stockholders hereby also include
such presently indeterminable number of shares of Common Stock as may be issued
on conversion of the Series B Convertible Preferred Stock pursuant to the
provisions thereof regarding determination of the applicable conversion price.
The Shares may be offered and sold by the Selling Stockholders or by pledgees,
donees, transferees or other successors in interest that receive such shares as
a gift, partnership distribution or other non-sale related transfer from time to
time in open-market or privately-negotiated transactions or by a combination of
such methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker-dealers and such broker-
dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders or the purchasers of the Shares for
whom such broker-dealers may act as agent or to whom they sell as principal or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions). See "Selling Stockholders" and "Plan of Distribution."
All of the shares offered hereunder are to be sold by the Selling
Stockholders. The Company will not receive any of the proceeds from the sale of
the shares by the Selling Stockholders. The Company has agreed to bear certain
expenses (other than fees and expenses, if any, of counsel or other advisors to
the Selling Stockholder) in connection with the registration and sale of the
Shares being offered by the Selling Stockholders. The Company has agreed to
indemnify the Selling Stockholders against certain liabilities, including
certain liabilities under the Securities Act.
The Common Stock of the Company is listed for quotation on the Nasdaq
National Market under the symbol DWTI. On May 12, 1997, the closing sale price
of the Common Stock, as reported on the Nasdaq National Market, was $3.375 per
share.
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AN INVESTMENT IN THE SECURITIES REGISTERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" APPEARING ON PAGE 4.
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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.
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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.
The date of this Prospectus is May , 1997.
<PAGE>
TABLE OF CONTENTS
Page
Available Information.............................................. 2
Incorporation of Certain
Documents By Reference........................................... 3
Risk Factors....................................................... 4
The Company........................................................ 6
Selling Stockholders............................................... 8
Plan of Distribution............................................... 10
Legal Matters...................................................... 10
Experts............................................................ 10
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities of the Commission, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such materials can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports and other information
can also be reviewed through the Commission's web site on the Internet
(http://www.sec.gov). The Common Stock of the Company is quoted on the Nasdaq
National Market. Reports and other information concerning the Company may be
inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006-1506.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock being offered
hereby. This Prospectus, which constitutes part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Common Stock, reference is made to the Registration Statement and the exhibits
and schedules filed therewith. This Prospectus contains accurate summaries of
the material terms of certain contracts or other documents filed as exhibits to
the Registration Statement. Such summaries are qualified in all respects by
reference to the copies of such contracts or other documents filed as exhibits
to the Registration Statement. The Registration Statement, including exhibits
thereto, may be inspected without charge at the Commission's principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C 20549, and copies of
all or any part thereof may be obtained from such office after payment of the
fees prescribed by the Commission. Such material may also be accessed
electronically by means of the Commission's web site on the Internet
(http://www.sec.gov).
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or the Selling
Stockholders. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy to any person in any jurisdiction in which such
offer or solicitation would be unlawful or to any person to whom it is unlawful.
Neither the delivery of this Prospectus nor any offer or sale made hereunder
shall, in any circumstances, create any implication that there has been no
change in the affairs of the Company or that the information contained herein is
correct as of any time subsequent to the date hereof.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-21860), pursuant to the Exchange Act, are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, filed with the Commission on March 31, 1997.
(2) The Company's Current Report on Form 8-K, filed by the Company with
the Commission on April 17, 1997.
(3) All other reports, if any, filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the Annual Report referred to
in paragraph (a) above.
(4) The description of the Common Stock of the Company contained in the
Company's Registration Statement on Form 8-A, declared effective by
the Commission on July 19, 1993, including any amendment or reports
filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the securities registered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing such documents. Any statement contained in any
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded, for purposes of this Prospectus, to the
extent that a statement contained herein (or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein)
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of any such person, a
copy of any or all of the documents which are incorporated herein by reference,
except for certain exhibits to such documents. Requests should be directed to
the Company, Attention: Susan Weiner, Controller, 222 Third Street, Suite 3300,
Cambridge, Massachusetts 02142, telephone (617) 621-0820.
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<PAGE>
RISK FACTORS
An investment in the shares of Common Stock being offered hereby involves a
high degree of risk. Prospective investors should carefully consider the
following risk factors, in addition to the other information contained in this
Prospectus and in the Company's SEC filings (see "Incorporation of Certain
Documents by Reference"), before purchasing the shares of Common Stock offered
hereby.
Rapid Technological and Market Changes
The market for the Company's products and services is characterized by
rapidly changing technology. Currently, the Company's products and services are
primarily based on CD ROM technology and on-line information management and
distribution technology, the core elements of which were developed prior to or
during the early 1990s. Furthermore, the market for the Company's products is
changing, especially in the United States, with potential customers placing an
increasing emphasis on price. With the recent popularity of the Internet and the
growth in the market for lower-priced software not requiring a high level of
customer service, the environment for information management and distribution
products and services is changing rapidly. The Company's ability to realize its
expectations will depend on its success at enhancing its current offerings,
developing new products and services that keep pace with developments in
technology and meet evolving customer requirements, and delivering those
products through appropriate distribution channels. This will require, among
other things, correctly anticipating customer needs, hiring and retaining
personnel with the necessary skills and creativity, providing adequate funding
for the development efforts, and managing distribution channels effectively.
Failure by the Company to anticipate or respond adequately to technological
developments and customer requirements, significant delays in the development,
production, testing, marketing or availability of new or enhanced products or
services, or the failure of customers to accept such products or services could
adversely affect the Company's competitive position and operating results.
Competition
The market areas where the Company competes are intensely competitive and
rapidly changing. The Company currently encounters competition from direct
competitors that offer CD-ROM software and/or services, text management
software, and software and services for on-line/Internet applications. The
Company also competes with larger organizations, including software publishers,
publishing houses and systems integrators. The Company expects that competition
from these sources will increase. Furthermore, it is likely that new competitors
will enter the markets as they continue to grow.
Many of the Company's existing and potential competitors have longer
operating histories and significantly greater financial, technical, sales,
marketing and other resources than the Company. Furthermore, as the markets
grow, a number of companies with significantly greater resources than the
Company could attempt to increase their presence in the Company's market areas
by acquiring or forming strategic alliances with competitors of the Company or
by introducing products or services specifically designed for these markets.
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The principal competitive factors affecting the market for the Company's
products and services include vendor and product reputation, breadth of product
and services offering, direct and indirect sales presence, product performance,
functionality, price, ease of use, architecture, platform coverage, quality of
support and international language support. Based on these factors, the Company
believes that it has competed effectively to date. The Company expects
competition to increase and such increased competition could result in price
reductions and loss of market share for the Company. The Company must continue
to introduce enhancements to its existing products and services and new products
and services in a timely manner in order to remain competitive. In particular,
as the market for managing and distributing information grows, both new entrants
and existing customers are becoming increasingly price sensitive. Certain of the
Company's competitors are already addressing this situation with lower priced,
less sophisticated products. The Company is responding by: (i) adding lower-
price products that do not include the level of features and custom service that
have characterized traditional offerings, (ii) developing appropriate
distribution channels, (iii) stressing functionality differences and (iv)
stressing the quality and extent of support. However, even if the Company
introduces such products and services in this manner, it may not be able to
compete effectively because of the significantly larger resources available to
many of its competitors. There can be no assurance that the Company will be able
to compete successfully or that competition will not have a material adverse
effect on the Company's business, operating results and financial condition.
Fluctuations in Operating Results
The Company has experienced and may in the future experience significant
period-to-period fluctuations in operating results. The Company's software
license fee revenues in any quarter are substantially dependent on the timing of
product shipments and receipt of license reports (with respect to which sales
are often difficult to forecast), the Company's ability to close significant
sales in that quarter, external market conditions and competition. The Company's
sales cycle varies substantially from customer to customer and, like many other
high technology companies, a disproportionately large percentage of quarterly
sales occur in the closing weeks of each quarter. The Company's orders early in
a quarter will not generally be large enough to assure that it will meet its
revenue targets for any particular quarter. Accordingly, the Company's quarterly
results will be difficult to predict until the end of the quarter. Any forward-
looking statements about operating results made by members of management will be
based on historically reasonable assumptions about the likelihood of closing
sales then in the pipeline. The failure to consummate any of those sales may
have a disproportionately negative impact on operating results, given the
Company's relatively fixed costs, and may thus prevent management's projections
from being realized.
Other factors that affect the Company's operating results and that
management takes into account include worldwide and regional economic trends,
increases in the cost of software licenses, changes in the revenue mix between
software license fees and service revenues, and other changes in the cost of
revenues within each category. Because a large portion of the Company's
business is derived from customers located outside North America, exchange rate
fluctuations and other external economic and regulatory influences may have a
significant impact on the Company's operating results. Changes in the factors
underlying management's assumptions may result in a material variation between
results from quarter to quarter or
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<PAGE>
between actual results and those forecast in any forward-looking statements made
during a particular period.
Dependence on Certain Classes of Customer
Although the Company's customer base is broad and diverse, the Company's
revenues depend in part on maintaining its relationships with certain classes of
customer, particularly including government agencies in the United States,
Canada, Germany, and the United Kingdom, corporate and commercial publishers,
and (for certain online products) law firms. Factors generally affecting any of
these customer groups may have a substantial adverse effect on the Company's
earnings. For example, political pressures may cause governmental customers to
reduce spending on the Company's products and services. A reduction in the
amount of orders received from any such customer class would have a material
adverse effect on the Company's earnings and may cause actual results to vary
materially from quarter to quarter or to differ from those projected in
management's forward-looking statements.
Dependence on Licensed Proprietary Technology
Certain proprietary technology is incorporated into the Company's products
under license agreements with third parties who may be competitors. Management's
forward-looking statements are necessarily based on assumptions about the costs
associated with the Company's use of such technology, but such costs are subject
to change from time to time for reasons not under the Company's control. Changes
in such costs or in the availability of such licenses could have a material
effect on the Company's operating results, and may cause actual results to vary
materially from quarter to quarter or to differ from those projected in
management's forward-looking statements.
Dependence on Key Personnel
The Company's success depends on its ability to attract and retain highly
skilled technical, management, sales and marketing personnel. Competition for
such personnel in the computer software and services industry is intense.
Factors such as the Company's ability to provide competitive equity compensation
to key employees (which is a function both of the market price of the Common
Stock and the willingness of the Company's stockholders to continue to approve
such compensation) play a significant role in personnel retention. Management's
projections necessarily assume that the Company will continue to attract and
retain such personnel, so the failure to do so could have a material adverse
effect on the Company's ability to develope and market competitive products and,
thus its ability to achieve projected operating results.
Management of Growth Through Acquisitions
The Company's product range and customer base have grown rapidly in the
recent past due in part to acquisitions. The Company may acquire additional
businesses or assets in the future. Any forecasts of the probability of success
of an acquisition are dependent upon the Company's ability to integrate the
acquired business or assets successfully. Failure to do so, or a material
increase in the cost of integration, could cause actual results to vary
materially from period to period or to differ from those projected in
management's forward-looking statements.
THE COMPANY
Dataware's base business is software and services for high-end electronic
publishing. Through its direct sales and service organizations (20 offices
worldwide), the Company has developed relationships with more than 2,000 blue
chip customers serving over 800,000 end users. The Company competes in four
major application areas: CD-ROM software and services, text management software,
software and services for on-line/Internet applications, and electronic
publishing management systems. Increasingly, these application areas are
overlapping, as hybrid-media solutions are requested by customers.
Dataware's sophisticated software products and extensive services enable
customers to maximize the advantage of the latest information technologies, such
as the Internet, intranets, CD-ROM, client/server, and multimedia. The
Company's software systems, applications, and custom software are designed to
enable customers to successfully deploy real-world applications that save money,
increase productivity, generate increased revenue and profit, and create
competitive advantages. Dataware's base business is a "customer intimate"
business with substantial recurring revenues. Customer relationships tend to
last for many years. Dataware derives recurring revenues from software
licenses, software maintenance, and service revenues from updating existing
customers' electronic publishing applications.
CD-ROM is primarily used as a medium for distributing large amounts of
electronic information to multiple locations in a compact format. CD-ROM
competes primarily with other distribution media such as paper (print media),
microfiche and on-line information delivery. The advantages of CD-ROM derive
primarily from the combination of large storage capacity, low cost (in volume),
very compact form and random access, which permits electronic searching and
multimedia display.
Dataware participates in the text document management and retrieval
software market through its BRS/Search and NetAnswer software product families.
These products are used in mission-critical and mission-support systems
throughout the world to manage collections, or "repositories," of unstructured
information, including word processor files, research papers, market reports,
project files, supplier details, product specifications, articles, memos,
precedents, case notes, transcripts, depositions, regulations, standards,
resumes, e-mail, and plans with associated charts, tables, diagrams and
photographs. These repositories can be accessed over LANs, WANs, or the
Internet.
Software and services for on-line/Internet applications is the third major
application area where Dataware is active. Dataware sells server software
(NetAnswer, BRS/Search, CD Answer, and Electronic Publishing Management Systems
("EPMS")), user interface development tools (Total Recall, HLI, ADL and EPMS
SDKs) and services to assist information providers in developing
on-line/Internet applications. The applications are deployed through proprietary
or publicly available networks, including the Internet.
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<PAGE>
Unprecedented information access has challenged organizations to provide
timely and accurate information to employees through electronic publishing
processes that use both the Internet as well as inside-the-organization
intranets. Dataware sells electronic publishing management systems products and
services to assist organizations in making their electronic publishing processes
run efficiently and effectively. Dataware EPMS, introduced in 1996, is a new
type of electronic publishing management system specifically designed to assist
organizations in managing the often complex and expensive process of electronic
publishing.
The Company was incorporated in Delaware on March 15, 1988. Significant
operations of the Company commenced on October 1, 1988 upon the purchase of the
worldwide rights to certain software developed by Dataware 2000 GmbH and the
acquisition of its United States distributor. Acquisitions of related
businesses have contributed significantly to the Company's growth since 1991.
Most recently, on July 31, 1996, the Company acquired Ntergaid, Inc.
("Ntergaid") of Milford, CT for cash and shares of Common Stock through the
merger of a wholly owned subsidiary of the Company with Ntergaid. On April 14,
1997, the Company issued and sold an aggregate of 3,000 shares of Series B
Convertible Preferred Stock to GFL Advantage Fund Limited, a British Virgin
Islands Corporation. Among other recent events, on April 8, 1997, Northern
Light Technology Corporation, a subsidiary of the Company that had been engaged
in developing a next-generation Internet search and guide service for consumers,
sold substantially all of its assets to a newly formed limited liability in
exchange for a minority preferred equity interest and a note secured by assets
of the buyer. Further information about this transaction is contained in the
Company's Form 10-Q for the quarter ending April 30, 1997. More detailed
information about the Company's business is contained in the Company's Form 10-K
for 1996 and will be contained in future Forms 10-K.
The Company's principal executive offices are located at 222 Third Street,
Suite 3300, Cambridge, Massachusetts 02142, telephone (617) 621-0820. As used
in this Prospectus, the terms "the Company" and "Dataware" refer to Dataware
Technologies, Inc., a Delaware corporation, and its wholly-owned subsidiaries.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the name and the number of shares of
Dataware Common Stock beneficially owned by each Selling Stockholder as of May
12, 1997, the number of the shares to be offered by each Selling Stockholder
pursuant to this Prospectus and the number of shares to be beneficially owned by
each Selling Stockholder after the offering if all of the shares offered hereby
by such Selling Stockholder are sold as described herein. Except as noted
below, the Selling Stockholders have not held any position or office with, been
employed by, or otherwise had a material relationship with, the Company or any
of its predecessors or affiliates since January 1, 1994, other than as
stockholders of Dataware subsequent to their respective acquisition of shares of
Dataware securities. The Shares are being registered to permit public secondary
trading of the Shares, and the Selling Stockholders may offer the Shares for
resale from time to time. See "Plan of Distribution."
Certain Shares being offered hereby by the Selling Stockholders may be acquired,
from time to time, upon (i) the conversion of Shares of Series B Convertible
Preferred Stock, which were acquired by them in a private placement transaction
pursuant to a Subscription Agreement, dated as of April 10, 1997 (the
"Subscription Agreement"), and (ii) the payment by the Company of dividends
declared on the Shares of Series B Convertible Preferred Stock in the form of
Common Stock in lieu of cash interest. Once the Commission has declared
effective the Registration Statement of which this Prospectus forms a part, the
Series B Convertible Preferred Stock is convertible into Common Stock at a
conversion price equal to 80% of the closing bid price of the Common Stock as
reported on the Nasdaq National Market for the five consecutive trading days
immediately preceding the date of conversion. Pursuant to the terms of the
Certificate of Designations for Series B Convertible Preferred Stock, no holder
can convert any portion of such holder's Series B Convertible Preferred Stock if
such conversion would increase such holder's beneficial ownership of the Common
Stock (other than shares so owned through ownership of the Series B Convertible
Preferred Stock) to in excess of 4.9%. In addition, in no event will the Series
B Convertible Preferred Stock be convertible for an aggregate number of shares
of Common Stock which is equal to or greater than 20% of the Company's
outstanding shares of Common Stock. The Company has agreed to register a
specified number of shares for resale by GFL Advantage Fund Limited. The number
of shares shown in the following table as being offered by GFL Advantage Fund
Limited does not include such presently indeterminable number of shares of
Common Stock as may be issued on conversion of the Series B Convertible
Preferred Stock pursuant to the provisions thereof regarding determination of
the applicable conversion price.
In recognition of the fact that Selling Stockholders may wish to be legally
permitted to sell their Shares when they deem appropriate, the Company has filed
with the Commission, under the Securities Act, a Registration Statement on
Form S-3, of which this Prospectus forms a part, with respect to the resale of
the Shares from time to time on the Nasdaq National Market or in privately-
negotiated transactions and has agreed to prepare and file such amendments and
supplements to the Registration Statement as may be necessary to keep the
Registration Statement effective until the Shares are no longer required to be
registered for the sale thereof by the Selling Stockholders.
The Company has agreed to pay for all costs and expenses incident to the
issuance, offer, sale and delivery of the Shares, including, but not limited to,
all expenses and fees of preparing, filing and printing the Registration
Statement and Prospectus and related exhibits, amendments and supplements
thereto and mailing of such items. The Company will not pay selling commissions
and expenses associated with any such sales by the Selling Stockholders. The
Company has agreed to indemnify the Selling Stockholders against civil
liabilities including liabilities under the Securities Act of 1933.
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<PAGE>
<TABLE>
<CAPTION>
Number of Shares Number of Shares Number of Shares
Name of Beneficially Owned of Common Stock Beneficially Owned
Selling Stockholder as of May 12, 1997 Offered Hereby After Offering
- ------------------- ------------------ -------------- --------------
<S> <C> <C> <C>
GFL Advantage Fund Limited 1,335,256 (1) 1,335,256 0
c/o CITGO
Kaya Flamboyan 9
Curacao, Netherlands Antilles
Wharton Capital Partners Ltd. 75,000 (2) 75,000 0
545 Madison Avenue
New York, NY 10022
Advest, Inc. 50,000 (2) 50,000 0
90 State House Square
Hartford, CT 06103
J. Scott Johnson (3) 44,175 44,175 0
Brian C. Geidt (3) 44,175 44,175 0
Mark J. Hanrahan (3) 4,650 4,650 0
Argentum Partners (4) 7,000 7,000 0
One Forbes Road
Lexington, MA 02173
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</TABLE>
(1) Represents the maximum aggregate number of shares of Common Stock issuable
to the Selling Stockholder (i) upon conversion of outstanding shares of
Series B Convertible Preferred Stock and (ii) as dividends declared and
paid to the holders of Series B Convertible Preferred Stock.
(2) Represents shares of Common Stock issuable upon exercise of one or more
Common Stock Purchase Warrants issued in consideration for investment
banking services performed for the Company.
(3) Stockholders' addresses are c/o Dataware Technologies, Inc., 222 Third
Street, Suite 3300, Cambridge, Massachusetts 02142. Messrs. Johnson,
Geidt, and Hanrahan were the principal officers and sole stockholders of
Ntergaid, Inc. before its acquisition by the Company on July 31, 1996, and
have been employed by the Company since that date.
(4) Ronald A. Smith, a partner of Argentum Partners, previously served as a
consultant to Ntergaid, Inc.
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from time to
time by the Selling Stockholders or by pledges, donees, transferees or other
successors in interest. The Selling Stockholders will act independently of the
Company in making decisions with respect to the timing, manner and size of each
sale. Such sales may be made in the over-the-counter market or otherwise at
prices related to the then current market price or in negotiated transactions.
The shares may be sold by one or more of the following
-9-
<PAGE>
methods: (a) purchases by a broker-dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus; (b) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; (c) block
trades in which the broker-dealer so engaged will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction, (d) privately negotiated transactions not using a
broker, and (e) underwritten public offerings. In addition, certain Selling
Stockholders may from time to time, subject to the restrictions set forth below,
sell short the Common Stock of the Company, and in such instances, this
Prospectus may be delivered in connection with such short sale and the Shares
offered hereby may be used to cover such short sale. The Company has been
advised by the Selling Stockholders that they have not, as of the date hereof,
made any arrangements relating to the distribution of the shares covered by this
Prospectus. In effecting sales, broker-dealers engaged by the Selling
Stockholders may arrange for other broker-dealers to participate. Broker-dealers
will receive commissions or discounts from the Selling Stockholders in amounts
to be negotiated immediately prior to any sale. The Company has agreed to
indemnify certain of the Selling Stockholders against certain liabilities,
including liabilities under the Securities Act.
In offering the shares of Common Stock covered hereby, the Selling
Stockholders and any broker-dealers and any other participating broker-dealers
who execute sales for the Selling Stockholder may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Stockholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions. In
addition, any shares covered by this Prospectus that qualify for sale pursuant
to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus.
None of the shares covered by this Prospectus presently qualify for sale
pursuant to Rule 144.
Upon the Company being notified by the Selling Stockholders that any
material arrangement has been entered into with a broker-dealer, agent or
underwriter for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a
broker-dealer, agent or underwriter, a supplement Prospectus will be filed, if
required, pursuant to Rule 424(c) under the Act, disclosing (a) the name of each
such broker-dealer, agent or underwriter, (b) the number of Shares involved, (c)
the price at which such Shares were sold, (d) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), agent(s) or underwriter(s) or
other items constituting compensation or indemnification arrangements with
respect to particular offerings, where applicable, (e) that such broker-
dealer(s), agent(s) or underwriter(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this Prospectus,
as supplement, and (f) other facts material to the transaction.
In connection with distributions of the Shares, the Selling Stockholders
may (i) enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the Shares in the course of hedging
the positions they assume with such Selling Stockholders, and (ii) enter into
option or other transactions with broker-dealers that involve the delivery of
the Shares to the broker-dealers, who may then resell or otherwise transfer such
Shares; provided, however, that no such transaction undertaken in connection
with this plan of distribution may occur prior to the filing of the required
notices of conversion.
This offering will terminate on the earlier of (a) April 14, 1999 (the date
that is two years after the Closing Date of sale of shares of Series B
Convertible Preferred Stock), or (b) the date on which all shares offered hereby
have been sold by the Selling Stockholders. However, on April 14, 1999, if the
Selling Stockholders who are holders of shares of Common Stock received on
conversion of shares of Series B Convertible Preferred Stock would not be
permitted under the Securities Act to sell all shares of Common Stock
beneficially owned by the Selling Stockholders without restriction on the manner
of sale or the amount of securities sold and without the requirement for the
giving of any notice to, or the making of any filing with, the Commission, then
the offering will be extended to the earlier of the date on which the Selling
Stockholders are so permitted or April 14, 2000.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Palmer & Dodge LLP, Boston, Massachusetts. Matthew C.
Dallett, a partner of Palmer & Dodge LLP, is Assistant Secretary of the Company.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995 and
the consolidated statements of operations, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 1996, incorporated
by reference in this Prospectus, have been incorporated herein in reliance on
the report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses to be paid by the Registrant in connection with this
offering are as follows:
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee................................................. $ 1,448
Nasdaq National Market Additional Listing Fee........................ 17,500
Printing and engraving expenses...................................... 500
Accounting fees and expenses......................................... 5,000
Legal fees and expenses.............................................. 5,000
Transfer Agent and Registrar fees.................................... 500
Miscellaneous........................................................ 1,052
-------
Total $30,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits the Registrant
to indemnify directors, officers, employees and agents of the Registrant against
actual and reasonable expenses (including attorneys' fees) incurred by them in
connection with any action, suit or proceeding brought against them by reason of
their status or service as a director, officer, employee or agent by or on
behalf of the Registrant, and against expenses (including attorneys' fees),
judgments, fines and settlements actually and reasonably incurred by him in
connection with any such action, suit or proceeding, if (i) he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Registrant, and (ii) in the case of a criminal proceeding, he
had no reasonable cause to believe his conduct was unlawful. Except as ordered
by a court, no indemnification shall be made in connection with any proceeding
brought by or in the right of the corporation where the person involved is
adjudged to be liable to the Registrant.
Article FIFTH, Section 6 of the Registrant's Restated Certificate of
Incorporation, as amended to date, provides that the Registrant shall, to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify each person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was, or has agreed to become
a director or officer of the Registrant, or is or was serving, or has agreed to
serve at the request of the Registrant as a director, officer or trustee of, or
in a similar capacity with, another corporation, partnership, joint venture,
trust or other enterprise. The indemnification provided for in Article FIFTH is
expressly not exclusive of any other rights to which those seeking
indemnification may be entitled under any law, agreement or vote of stockholders
or disinterested directors or otherwise, and shall inure to the benefit of the
heirs, executors and administrators of such persons. Article FIFTH further
permits the Board of Directors to authorize the grant of indemnification rights
II-1
<PAGE>
to other employees and agents of the Registrant and such rights may be
equivalent to, or greater or less than, those set forth in Article FIFTH.
Article FIFTH, Section 7 of the Registrant's Restated Certificate of
Incorporation, as amended to date, provides that a director shall not be
personally liable to the Registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director, except to the extent that elimination or
limitation of liability is not permitted under the Delaware General Corporation
Law as in effect when such liability is determined.
Article V, Section 1 of the By-Laws of the Registrant, as amended through
February 17, 1995, permits the Registrant to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, fiduciary, or
agent of the Registrant against any liability asserted against and incurred by
such person in any such capacity or arising out of such person's position,
whether or not the Registrant would have the power to indemnify such person
against such liability under the provisions of the General Corporation Law of
the State of Delaware.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
See the Exhibit Index immediately following the signature page.
(b) Financial Statement Schedule
Schedule 2.2 is incorporated by reference to Schedule 2.2 filed with the
Registrant's Annual Report on Form 10-K.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes as follows:
(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;
(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 hereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this 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 this
Registration Statement;
II-2
<PAGE>
provided, however, that no filing will be made pursuant to paragraph (a)(1)(i)
or (a)(1)(ii) if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this 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
this offering.
(b) The undersigned 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 this 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) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
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 Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cambridge, Commonwealth of
Massachusetts, on this 19th day of May, 1997.
DATAWARE TECHNOLOGIES, INC.
By: /s/ Daniel M. Clarke
--------------------
Daniel M. Clarke
Vice President, Finance and
Administration
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Kurt Mueller* Director and Principal May 19, 1997
- -------------------------- Executive Officer
Kurt Mueller
/s/ Daniel M. Clarke Principal Financial and May 19, 1997
- -------------------------- Accounting Officer
Daniel M. Clarke
Jeffrey O. Nyweide* Director May 19, 1997
- --------------------------
Jeffrey O. Nyweide
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
Stephen H. Beach* Director May 19, 1997
- --------------------------
Stephen H. Beach
William R. Lonergan* Director May 19, 1997
- --------------------------
William R. Lonergan
Julie M. Donahue* Director May 19, 1997
- --------------------------
Julie M. Donahue
*By: /s/ Daniel M. Clarke
---------------------
Daniel M. Clarke
Attorney-in-fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<C> <S>
4.1 Restated Certificate of Incorporation, as amended through April 14,
1997. (1)
4.2 By-Laws of the Registrant, as amended through February 17, 1995. (2)
4.3 Rights Agreement dated July 8, 1996, by and between American Stock
Transfer & Trust Company as Rights Agent and the Registrant (the
"Rights Agreement") (3)
4.4 First Amendment to the Rights Agreement, dated April 14, 1997. (4)
5.1 Opinion of Palmer & Dodge LLP as to the legality of the shares being
registered.
*23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Palmer & Dodge LLP. Included in the opinion filed as
Exhibit 5.1.
24.1 Power of Attorney.
- -----------------------------------------
</TABLE>
* Filed herewith.
All other exhibits previously filed.
(1) Filed as an exhibit to the Company's Current Report on Form 8-K
(File No. 0-21860) on April 17, 1997 and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995 (File No. 0-21860) and incorporated herein by
reference.
(3) Filed as an exhibit to the Company's Current Report on Form 8-K
(File No. 0-21860) on July 18, 1996 and incorporated herein by reference.
(4) Filed as an exhibit to the Company's Current Report on Form 8-K
(File No. 0-21860) on April 17, 1997 incorporated herein by reference.
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 1 to this
Registration Statement on Form S-3 (File No. 333-27007) of our report dated
February 13, 1997, on our audit of the financial statements of Dataware
Technologies, Inc. which appears in the Company's 1996 Annual Report on Form 10-
K. We also consent to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 19, 1997
