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CENTURA SOFTWARE CORPORATION
3,767,456 SHARES
COMMON STOCK
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS.
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All references herein to "Centura" or the "Company" mean Centura Software
Corporation unless otherwise indicated by the context.
The 3,767,456 shares of Centura Software Corporation Common Stock, $0.01
par value, covered by this Prospectus (the "Shares") are offered for the account
of certain shareholders of the Company (the "Selling Shareholders"). The Shares
were issued (or are issuable upon exercise of warrants issued) to the Selling
Shareholders in connection with a Warrant Purchase Agreement dated February 27,
1998 between the Company and Computer Associates International, Inc. ("CA") (the
"CA Warrant"), a private placement of Company Common Stock and issuance of
warrants to purchase Common Stock (the "Private Placement Warrants") on
February 27, 1998 (the "Private Placement"), and Common Stock Warrants issued to
Rochon Capital Group, Ltd. on February 27, 1998 in consideration for services
performed in connection with the foregoing and related transactions (the "Rochon
Warrants", and together with the CA Warrant and the Private Placement Warrants,
the "Warrants"). For additional information concerning the CA Warrant, the
Private Placement and issuance of the Rochon Warrants, see "Issuance of Common
Stock and Warrants to Selling Shareholders." The Selling Shareholders may sell
the Shares from time to time on the over-the-counter market in regular brokerage
transactions, in transactions directly with market makers or in certain
privately negotiated transactions. See "Plan of Distribution." Each Selling
Shareholder has advised the Company that no sale or distribution other than as
disclosed herein will be effected until after this Prospectus shall have been
appropriately amended or supplemented, if required, to set forth the terms
thereof. The Company will not receive any proceeds from the sale of the Shares
by the Selling Shareholders.
Each of the Selling Shareholders may be deemed to be an "Underwriter," as
such term is defined in the Securities Act of 1933, as amended (the "Securities
Act").
On April 22, 1998, the last sale price of the Company's Common Stock on The
Nasdaq SmallCap Market was $1.875 per share.
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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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING SHAREHOLDERS
PUBLIC COMMISSIONS(1) SHAREHOLDERS(1)
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<S> <C> <C> <C>
Per Share.............. See Text Above See Text Above See Text Above
Total..................
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(1) All expenses of registration of the Shares, estimated to be approximately
$12,000.00 shall be borne by the Company. Selling commissions, brokerage
fees, any applicable stock transfer taxes and any fees and disbursements of
counsel to the Selling Shareholders are payable individually by the Selling
Shareholders.
THE DATE OF THIS PROSPECTUS IS MAY 18, 1998
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES
IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SHARES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files proxy statements, reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, and proxy and
information statements, and other information filed by the registrant with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission in Washington, D.C., and at its Regional Offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New York, New York
10048; and at the Public Reference Office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. In addition, the registrant is an electronic
filer and copies of such material may be retrieved from the Web site
(http://www.sec.gov) maintained by the Commission.
Copies of such material can be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Company's Common Stock is quoted on The Nasdaq SmallCap Market under
the symbol "CNTR." Reports, proxy and information statements and other
information about the Company may be inspected at the Nasdaq National Market,
1735 K Street, N.W., Washington, DC 20006-1506.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. The Company's Current Reports on Form 8-K and 8-K/A filed with the
Commission on January 30, 1998, February 27, 1998 and March 2, 1998.
3. The Company's preliminary Proxy Statement dated April 30, 1998 filed
in connection with the Company's June 17, 1998 Annual Meeting of Shareholders.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, filed with the Commission on May 15, 1998.
5. The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form 8-A filed with the Commission on
December 17, 1992, as amended by Amendment No. 1 to the Registration Statement
on Form 8-A filed with the Commission on January 29, 1993 and Amendment No. 2 to
the Registration Statement on Form 8-A filed with the Commission on February 4,
1993.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference in this Prospectus. Any statement contained in
a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that
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a statement contained herein (or in any other subsequently filed document which
also is incorporated by reference herein) modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed
to Chief Financial Officer, Centura Software Corporation, 975 Island Drive,
Redwood Shores, California 94065, telephone: (650) 596-3400.
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THE COMPANY
Centura Software Corporation (the "Company" or "Centura"), formerly Gupta
Corporation, provides a suite of computer software products useful to
application developers in building and deploying component based distributed
business applications. The Company's product lines include a family of embedded
databases, (SQLBASE), application development tools, (CENTURA TEAM DEVELOPER,
THE 32-BIT VERSION OF SQLWINDOWS, SQLWINDOWS AND CENTURA NET.DB) and
PC-to-mainframe connectivity products (SQLHOST). Now in its seventh generation,
SQLBASE was the first Relational Database Management System ("RDBMS") available
in the PC and PC LAN environment offering similar RDBMS functions previously
found only in high-end databases. The Company's products have historically been
market leaders in the Windows client/server environment, used both in
work-group/departmental business applications, as well as packaged applications
sold by third party software vendors to small and medium size businesses. The
Company is continuing to enhance its existing Windows client product line. At
the same time, the Company is enhancing its products into new market
opportunities for thin-clients (the World Wide Web, Portable Device Applications
("PDAs") and smart appliances). In these markets, a small memory requirement
(or "footprint"), client/server or embedded application and database
architecture has a natural fit. (The Internet is also referred to hereinafter
as the "World Wide Web" or the "Web" and corporate internal Webs are referred to
as "Intranets").
The Company's embeddable database, SQLBASE, is a robust, small footprint
RDBMS, which requires no database administrator ("DBA"). Business applications
that embed SQLBASE operate with a single set of source code on a desktop PC, a
PC LAN, the Web, and connected mobile client environments. The Company's
development tools, CENTURA TEAM DEVELOPER and SQLWINDOWS, are 4GL object
oriented tools offering improved programmer productivity. The Company recently
introduced CENTURA NET.DB, a browser-based SQL to HTML Web authoring tool.
CENTURA NET.DB makes it easy to connect corporate databases with end users,
providing dynamic access to SQL databases in JavaScript enabled Web browsers. In
addition, as CENTURA NET.DB is browser based, it can run on any client platform
capable of running a browser. SQLHOST allows organizations to integrate DB2 or
legacy data into a client/server environment without compromising performance,
control, or security.
The primary customers of Centura products are application developers
(including Fortune 1000 developers who deploy Centura products throughout
company branch offices and customers' offices), Independent Software Vendors who
develop and deploy shrink-wrapped, packaged applications for small and medium
size business, and Value Added Resellers who develop customized software for
end-users. A new set of customers is emerging which embed SQLBASE in smart
and/or mobile electronic devices, such as the government of Mexico which imbeds
SQLBASE in Smart Cards for NAFTA export control. Some application developers
deploy both the embedded database and the application development tools in their
applications. Other developers deploy only the embedded database, connecting
SQLBASE to other business logic application tools such as Java or Visual Basic,
or to application development tools sitting on top of other, larger databases.
The Company has established multiple distribution channels that provide
broad market coverage for its products and address the specific needs of its
varied customer segments worldwide. The Company's products are used in at least
75 countries. Its customers include Automatic Data Processing, Aurum, CamData,
Citibank N.A., Daimler-Benz, Ford Motor Company, SQL Financials, IFS, Help Desk
Software, Norfolk Southern, Ontario Hydro, Lilly Software, Siemens-Nixdorf
Informations Systeme AG, The Southern Company, United Airlines, United Parcel
Service, Deutsch Bank, M-5, Xerox, Computer Associates, and the governments of
Mexico, France, Australia and the United Kingdom.
The Company was originally incorporated in California under the name Plum
Computers, Inc. on February 16, 1983. It completed its initial public offering
of Common Stock on February 11, 1993 under the name Gupta Corporation and
subsequently changed its name to Centura Software Corporation on September 26,
1996. The Company's principal executive offices are located at 975 Island
Drive, Redwood Shores, California 94065 and its telephone number at that
location is (650) 596-3400.
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RISK FACTORS
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION
APPEARING IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
CHANGES IN STRATEGIC DIRECTION: RESTRUCTURING. In efforts to stem losses
and maximize return on the Company's core assets and technologies, the Company
has restructured its operations and announced changes in strategic direction
several times in recent financial periods. The first of these changes, which
began in December 1995, encompassed a change in the Company's name from Gupta
Corporation to Centura Software Corporation and the identification of a flagship
product bearing the name CENTURA. In early 1997, the Company refocused its
marketing and sales efforts away from RDBMS and development tools products to a
middleware connectivity product and undertook a proposed merger with
Infospinner, Inc., ("InfoSpinner") for which the Company did not obtain required
shareholder approval within the specified time frame and, as such, was not
consummated. In the second half of 1997, the Company restructured and refocused
operations on its core competencies, products and technologies and terminated
its distribution arrangement with Infospinner. There can be no assurance that
the restructuring efforts the Company has engaged in to date will be successful
or that the Company will be able to sustain profitability on a quarterly or
annual basis. In addition, there can be no assurance that the Company's
management will not deem it appropriate to undertake other major restructuring
efforts or changes in strategic direction in the future or to what degree any of
these efforts will result in improved operational performance, if at all.
RECENT CHANGES IN SENIOR MANAGEMENT. In the fourth quarter of 1997, the
Company announced significant changes in senior management. Such changes
included the appointment of Scott R. Broomfield as Chief Executive Officer, John
W. Bowman as Chief Financial Officer, and Kathy Lane as Senior Vice President of
Marketing, and the election of Messrs. Jack King, Phillip Koen, Jr., and Earl
Stahl to the Company's Board of Directors, and the retirement of Samuel M.
Inman, III, Earl Stahl and Richard Gelhaus from their positions as officers of
the Company. In February 1998 the Company announced the election of Messrs.
William D. Nicholas and Peter Micciche to the Board of Directors and the
appointment of Scott R. Broomfield to the position of Chairman & CEO. There can
be no assurance that the new management team will be successful in execution of
its objectives or that the successful execution of these objectives will result
in improved operating results or financial position of the Company.
DEPENDENCE ON KEY PERSONNEL. The Company's future performance is
substantially dependent on the performance of its executive officers and key
product development, technical, sales, marketing and management personnel. The
Company does not have employment or non-competition agreements with any of its
employees. The loss of the services of any executive officer or other key
technical or management personnel of the Company for any reason could have a
material adverse effect on the business, operating results and financial
condition of the Company. In addition, the Company needs to recruit a Vice
President, Engineering/Chief Technology Officer. The Company considers this
position critical to the success of its ongoing competitive position in defined
markets and operations. There can be no assurance that an appropriate individual
will be located to fill this position on a timely basis on terms reasonable to
the Company, or at all.
The future success of the Company also depends on its continuing ability to
identify, hire, train, motivate and retain other highly qualified technical and
managerial personnel. Competition for such personnel is intense and the Company
has experienced difficulty in identifying and hiring qualified engineering and
software development personnel. There can be no assurance that the Company will
be able to attract, assimilate or retain other highly qualified technical and
managerial personnel in the future. The inability to attract and retain the
necessary technical and managerial personnel could have a material and adverse
effect upon its business, operating results and financial condition.
RECENT COMPANY LOSSES; FLUCTUATIONS IN QUARTERLY RESULTS. The Company has
experienced in the past and may in the future continue to experience significant
fluctuations in quarterly operating results. The Company reported a loss of $0.6
million for fiscal year 1997, a profit of $2.0 million for 1996, and a
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loss of $44.1 million for 1995. There can be no assurance that the restructuring
efforts the Company has engaged in to date will be successful or that the
Company will be able to sustain profitability on a quarterly or annual basis.
Many of the Company's product licensing arrangements are subject to revenue
recognition on a per-unit deployed basis as the Company's deferred obligation to
such customers is gradually extinguished. Revenue recognition in such cases is
therefore dependent upon the business activities of the Company's customers and
the timely and accurate reporting of such activities to the Company, which makes
predictability of the related revenue extremely uncertain. In addition,
quarterly operating results of the Company will depend on a number of other
factors that are difficult to forecast, including, general market demand for the
Company's products; the size and timing of individual orders during a quarter;
the Company's ability to fulfill such orders; introduction, localization or
enhancement of products by the Company; delays in the introduction and/or
enhancement of products by the Company and its competitors; market acceptance of
new products; reviews in the industry press concerning the products of the
Company or its competitors; software "bugs" or other product quality problems;
competition and pricing in the software industry; sales mix among distribution
channels; customer order deferrals in anticipation of new products; reduction in
demand for existing products and shortening of product life cycles as a result
of new product introductions; changes in operating expenses; changes in the
Company's strategy; personnel changes; foreign currency exchange rates; mix of
products sold; inventory obsolescence; product returns and rotations; and
general economic conditions. Sales of the Company's products also may be
negatively affected by delays in the introduction or availability of new
hardware and software products from third parties. The Company's financial
results also may vary as a result of seasonal factors including year and quarter
end purchasing and the timing of marketing activities, such as industry
conventions and tradeshows.
Although the Company has operated historically with little or no backlog of
traditional boxed product shipments, it has experienced a seasonal pattern of
product revenue decline between the fourth quarter and the succeeding first
quarter, contributing to lower worldwide product revenues and operating results
during such quarters. It has generally realized lower European product revenues
in the third quarter as compared to the rest of the year. The Company has also
experienced a pattern of recording a substantial portion of its revenues in the
third month of a quarter. As a result, product revenues in any quarter are
dependent on orders booked in the last month. Because the Company's staffing and
other operating expenses are based in part on anticipated net revenues, a
substantial portion of which may not be generated until the end of each quarter,
delays in the receipt or shipment of orders, including delays that may be
occasioned by failures of third party product fulfillment firms to produce and
ship products, or the actual loss of product orders can cause significant
variations in operating results from quarter to quarter. The Company may be
unable to adjust spending in a timely manner to compensate for any unexpected
revenue shortfall. Accordingly, any significant shortfall in sales of the
Company's products in relation to the Company's expectations could have an
immediate adverse impact on the Company's business, operating results and
financial condition. To the extent that the Company's expenses exceed expected
revenues in any fiscal period, its business, operating results and financial
condition could be materially and adversely affected. Due to the foregoing
factors, it is likely that the Company's operating results may, during any
fiscal period, fall below the expectations of securities analysts and investors.
In such event, the trading price of the Company's common stock could be
materially and adversely affected.
VOLATILITY OF THE COMPANY'S COMMON STOCK PRICE. The market for the
Company's common stock is highly volatile. The trading price of the Company's
common stock fluctuated significantly in 1997, 1996 and 1995, and may continue
to be subject to wide fluctuations in response to quarterly variations in
operating and financial results, announcements of new products or customer
contracts by the Company or its competitors, litigation and other factors. Any
shortfall in revenue or earnings from levels expected by securities analysts or
others could have an immediate and significant adverse effect on the trading
price of the Company's common stock in any given period. Additionally, the
Company may not learn of, or be able to confirm, revenue or earnings shortfalls
until late in the fiscal quarter or following the end of the quarter, which
could result in an even more immediate and adverse effect on the trading of the
Company's common stock. Finally, the Company participates in a highly dynamic
industry, which often results in significant volatility of its common stock
price.
DILUTIVE AND POTENTIAL DILUTIVE EFFECT TO SHAREHOLDERS. The Company has
engaged in a number of transactions which have resulted in dilution to the
Company's shareholders. On May 2, 1994, a lawsuit was filed against the Company
and certain of its officers and directors by a holder of the
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Company's common stock, on his own behalf and purportedly on behalf of a class
of others similarly situated (the "Class Action Lawsuit"). The Company reached a
binding settlement agreement (the "Settlement Agreement") with plaintiffs'
counsel in the lawsuit, and gained court approval of the Settlement Agreement on
September 30, 1996. As part of the settlement, the Company agreed to provide up
to a maximum of 2,500,000 shares of its common stock (the "Settlement Shares")
to a fund to be distributed among the members of the plaintiff class. As of
December 31, 1997, 2,500,000 Settlement Shares had been issued and distributed
in full settlement of the Class Action Lawsuit. Issuance of the Settlement
Shares was exempt from the registration requirements of Section 5 of the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section
3(a)(10) of the Securities Act, which provides for exemption of registration
under the Securities Act for securities issued pursuant to terms and conditions
which have been approved, after a hearing on the fairness of such terms and
conditions, by a United States court. As a result, the Settlement Shares, when
issued and delivered in accordance with the Settlement Agreement approved by the
United States District Court for the Northern District of California, were fully
tradable, fully paid and non-assessable.
In February 1998, Computer Associates, Inc. ("CA"), and Newport Acquisition
Company, LLP ("NAC") entered into a Note Purchase and Sale Agreement (to which
the Company consented) and the Company and NAC entered into a Note Conversion
Agreement (collectively, the "Agreements"). Under the terms of the Agreements,
the Company's promissory note, plus accrued interest, in the amount of
$12,251,000, payable to CA (the "CA Note") was acquired by NAC, and immediately
converted into 11,415,094 shares of the Company's common stock (the "Conversion
Shares"). Concurrently with execution of the Agreements, the Company and NAC
entered into an Investor Rights Agreement (the "Rights Agreement") wherein the
Company agreed to register the Conversion Shares under the Securities Act,
effective February 27, 1999.
Also in February 1998, pursuant to the terms a Common Stock and Warrant
Purchase Agreement, the Company completed a management-led private placement
of 2,330,191 shares of the Company's common stock (the "Private Placement"),
resulting in gross proceeds to the Company of $2,470,000. Transaction costs
associated with both the Agreements and the Private Placement are
approximately $569,000. The Company has agreed to register the Private
Placement shares under the Securities Act.
In June 1997, the Company issued warrants to purchase 90,000 and 10,000
shares of common stock to Pacific Business Funding Corporation and its affiliate
Sand Hill Capital, LLC, respectively, at an exercise price of $2.094 per share.
The warrants expire on June 30, 2002. In February 1998, in connection with the
Agreements, the Company entered into a Warrant Purchase Agreement with CA
wherein the Company issued and sold to CA, a warrant to purchase 500,000 shares
of the Company's common stock (the "CA Warrant"). The CA Warrant is exercisable
at $1.906 per share and expires on February 27, 2003. The Company has agreed to
register the shares issuable upon exercise of the CA Warrant under the
Securities Act, no later than April 29, 1998. Also in February 1998, in
connection with the Private Placement the Company issued warrants to purchase
582,548 shares of the Company's common stock at an exercise price of $1.25 per
share (the "Private Placement Warrants"). The Private Placement Warrants expire
on February 27, 2003. Also, in consideration of services rendered in connection
with the Private Placement and the Agreements, the Company issued to Rochon
Capital Group, Ltd. warrants to purchase 354,717 shares of the Company's common
stock at an exercise price of $2.12 (the "Rochon Warrants"). The Rochon Warrants
expire on February 27, 2003. The Company has agreed to register the shares
issuable under the terms of the Private Placement Warrants and the Rochon
Warrants under the Securities Act.
From time to time, the Company issues shares of common stock pursuant to
its 1992 Employee Stock Purchase Plan and pursuant to options granted under its
1995 Incentive Stock Option Plan, 1998 Employee Stock Option Plan and 1996
Directors' Stock Option Plan. Additional options remain outstanding and are
exercisable pursuant to the Company's 1986 Incentive Stock Option Plan, which
terminated in July 1996. In addition, the Company has issued non-plan options to
purchase an aggregate of 1,500,000 shares of common stock to the Company's Chief
Executive Officer, Chief Financial Officer and Sr. Vice President of Marketing.
In March 1998, the Company's Board of Directors approved the 1998 Employee Stock
Option Plan, under which options to purchase 1,415,000 shares of common stock
are issuable to non-officer employees.
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Future issuance of such shares of the Company's common stock pursuant to
any of the foregoing will dilute the beneficial ownership of existing Company
shareholders.
NEED FOR ADDITIONAL EQUITY FINANCING. The Company may be required to seek
additional equity financing to finance the acquisition of new products and
technologies, capital equipment and continuing operations. If the Company needs
further financing, there can be no assurance that it will be available on
reasonable terms or at all. Any additional equity financing will result in
dilution to the Company's shareholders.
NEW PRODUCT RISKS; RAPID TECHNOLOGICAL CHANGE. The markets for the
Company's software products and services are characterized by rapid
technological developments, evolving industry standards, swift changes in
customer requirements and computer operating environments, and frequent new
product introductions and enhancements. As a result, the success of the Company
depends substantially upon its ability to continue to enhance existing products,
develop and introduce in a timely manner, new products incorporating
technological advances and meet increasing customer expectations, all on a
timely and cost-effective basis. To the extent one or more competitors introduce
products that better address customer needs, the Company's businesses could be
adversely affected. The Company's success will also depend on the ability of its
primary products, SQLBASE, CENTURA TEAM DEVELOPER, SQLWINDOWS, CENTURA NET.DB,
and SQLHOST, to perform well with existing and future leading, industry-standard
application software products intended to be used in connection with RDBMS. Any
failure to deliver these products as scheduled or their failure to achieve early
market acceptance as a result of competition, technological change, failure of
the Company to timely release new versions or upgrades, failure of such upgrades
to achieve market acceptance or otherwise, could have a material adverse effect
on the business, operating results and financial condition of the Company. In
addition, commercial acceptance of the Company's products and services could be
adversely affected by critical or negative statements or reports by industry and
financial analysts concerning the Company and its products, or other factors
such as the Company's financial performance. If the Company is unable to develop
and introduce new products or enhancements to existing products in a timely
manner in response to changing market conditions or customer requirements, its
business, operating results and financial condition could be materially and
adversely affected. The Company depends substantially upon internal efforts for
the development of new products and product enhancements. The Company has in the
past experienced delays in the development of new products and product versions,
which resulted in loss or delays of product revenues, and there can be no
assurance that the Company will not experience further delays in connection with
its current product development or future development activities. Also, software
products as complex as those offered by the Company may contain undetected
errors when first introduced or as new versions are released. The Company has in
the past discovered software errors in certain of its new products and
enhancements, respectively, after their introduction. Although the Company has
not experienced material adverse effects resulting from any such errors to date,
there can be no assurance that errors will not be found in new products or
releases after commencement of commercial shipments, resulting in adverse
product reviews and a loss of or delay in market acceptance, which could have a
material adverse effect upon the Company's business, operating results and
financial condition.
From time to time, the Company or its competitors may announce new
products, product versions, capabilities or technologies that have the potential
to replace or shorten the life cycles of the Company's existing products. The
Company has historically experienced increased returns of a particular product
version following the announcement of a planned release of a new version of that
product. The Company provides allowances for anticipated returns, and believes
its existing policies result in the establishment of allowances that are
adequate, and have been adequate in the past, but there can be no assurance that
product returns will not exceed such allowances in the future. The announcement
of currently planned or other new products may cause customers to delay their
purchasing decisions in anticipation of such products, which could have a
material adverse effect on business, operating results and financial condition
of the Company.
YEAR 2000 ISSUE. The "Year 2000 Issue" arises because most computer systems
and programs were designed to handle only a two-digit year, as opposed to a four
digit year. When the year 2000 begins these computers may interpret "00" as the
year 1900 and could either stop processing date-related computations or could
process them incorrectly. As customers and potential customers of the Company
begin to devote incremental resources to this issue, resources previously
allocated to other information systems requirements may be redirected
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to address the Year 2000 issue. To the extent that the Company's products are
not selected as part of customers' overall Year 2000 solution, redirection of
these customer resources could have a material adverse effect on the Company's
results of operations and financial condition. In addition, the Year 2000 Issue
creates risk for the Company from unforeseen problems in its internal computer
systems and from third parties with which the Company interacts. Such failures
of the Company's and/or third parties' computer systems could have a material
impact on the Company's ability to conduct its business, and to process and
account for the transfer of funds electronically.
EMBEDDABLE DATABASE MARKET. Since database capacity is often indicative of
differences in customer application, segments within the PC client/server market
in which the Company competes can generally be distinguished and segregated by
the target capacity of the database utilized. The Company generally markets its
database products in environments utilizing capacity ranging from small, five
kilobyte Smart Card environments to those in excess of five Gigabytes.
Competitors of the Company, including Microsoft, Oracle, CA, IBM, Sybase,
Borland, Pervasive, and Informix, generally have product offerings which compete
with the Company's products in some or all of these capacity ranges. In
addition, some of these competitors are providers of sophisticated database
software, originally designed and marketed primarily for use with mainframes and
minicomputers, which, if successfully re-configured to provide similar
functionality in Windows or browser clients, or smaller capacity environments,
could materially and adversely impact the Company's revenues, results of
operations and financial condition.
COMPETITION. The market for embedded databases and application development
tools system software is intensely competitive and rapidly changing. The
Company's products are specifically targeted at the emerging portion of this
market relating to embeddable PC and Web client/server software, and the
Company's current and prospective competitors offer a variety of solutions to
address this market segment. The Company faces competition from providers of
application development software, such as Oracle, Sybase's Powersoft Division,
Microsoft, and Borland, and connectivity software competitors such as IBM. The
Company also faces potential competition from vendors of applications
development tools based on 4GLs (generation languages) or CASE (Computer Aided
Software Engineers) technologies. With the emergence of the World Wide Web as an
important platform for application development and deployment and a variety of
newly created Java based development tools, additional competitors or potential
competitors have emerged.
Many of the Company's competitors have longer operating histories and
significantly greater financial, technical, sales, marketing and other
resources, as well as greater name recognition and a larger installed base, than
the Company. In addition, many competitors have established relationships with
customers of the Company. The Company's competitors could in the future
introduce products with more features and lower prices than the Company's
offerings. These companies could also bundle existing or new products with more
established products to compete with the Company. Furthermore, as the PC and Web
client/server market expands, a number of companies, with significantly greater
resources than the Company, could attempt to increase their presence in this
market by acquiring or forming strategic alliances with competitors of the
Company, or by introducing products specifically designed for the PC and Web
client/server market.
The principal competitive factors affecting the market for the Company's
products include breadth of distribution and name recognition, product
architecture, performance, functionality, price, product quality, customer
support. The Company experienced increased competition during 1997, 1996, and
1995, resulting in loss of market share. The Company must continue to introduce
enhancements to its existing products and offer new products on a timely basis
in order to remain competitive. However, even if the Company introduces such
products in this manner, it may not be able to compete effectively because of
the significantly larger resources available to many of the Company's
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.
MARKET ACCEPTANCE OF PC CLIENT/SERVER SYSTEMS. To date, substantially all
of the Company's revenues have been derived from the licensing of software
products for PC client/server systems and licensing of such products is expected
to continue to account for substantially all of the Company's revenues for the
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foreseeable future. With the increasing focus on enterprise-wide systems that
embrace the World Wide Web, some customers may opt for solutions that favor
mainframe or mini-computer solutions with associated Web connectivity.
Accordingly, some companies may abandon use of PC client/server systems, which
could have a material adverse effect on the Company's future success.
COMPONENT SOFTWARE MARKETS. The advent of so-called "component" software
may alter the way in which customers buy software. In this structure, logical
statements or discreet "units of activity" can be distributed pursuant to
executable statements within a Windows or Browser client environment. As
specific software functionality can be bundled into smaller units or objects
rather than in broad, highly functional products such as the Company's
development tools, customers may be less willing to buy such broad, highly
functional products. If such a trend continues, the Company may choose to
introduce component-type products. The costs and efforts necessary to package
and distribute such components are largely unknown and there can be no assurance
that the Company will be able to repackage and distribute its products in such a
component-type software structure, in an efficient manner, or at all.
INTERNET SOFTWARE MARKET. The market for Internet software in general, and
the segments of such market addressed by the Company's products in particular,
are relatively new. The future financial performance of the Company will depend
in part on the continued expansion of this market and these market segments and
the growth in the demand for other products developed by the Company, as well as
increased acceptance of the Company's products by MIS professionals. There can
be no assurance that the Internet software market and the relevant segments of
the market will continue to grow, that the Company will be able to respond
effectively to the evolving requirements of the market and market segments, or
that MIS professionals will accept the Company's products. If the Company is not
successful in developing, marketing, localizing and selling applications that
gain commercial acceptance in these markets and market segments on a timely
basis, the Company's business, operating results and financial condition could
be materially and adversely affected.
DEPENDENCE UPON DISTRIBUTION CHANNELS. The Company relies on relationships
with value-added resellers and independent third party distributors for a
substantial portion of its sales and revenues. Some of the Company's resellers
and distributors also offer competing products. Most of the Company's resellers
and distributors are not subject to any minimum purchase requirements, they can
cease marketing the Company's products at any time, and they may from time to
time be granted stock exchange or rotation rights. Moreover, the introduction of
new and enhanced products may result in higher product returns and exchanges
from distributors and resellers. Any product returns or exchanges in excess of
recorded allowances could have a material adverse effect on the Company's
business, operating results and financial condition. The Company also maintains
strategic relationships with a number of vertical software vendors and other
technology companies for marketing or resale of the Company's products. Any
termination or significant disruption of the Company's relationship with any of
its resellers or distributors, or the failure by such parties to renew
agreements with the Company, could materially and adversely affect the Company's
business, operating results and financial condition. Since 1994 the Company has
reduced its resources devoted to North American corporate sales and also
decreased its expenditures on corporate and product marketing. Failure of the
Company to successfully implement, support and manage its sales strategies could
have a material adverse effect on the Company.
The distribution channels through which client/server software products are
sold have been characterized by rapid change, including consolidations and
financial difficulties of distributors, resellers and other marketing partners
including certain of the Company's current distributors. The bankruptcy,
deterioration in financial condition or other business difficulties of a
distributor or retailer could render the Company's accounts receivable from such
entity uncollectible, and this could result in a material adverse effect on the
Company's business, operating results and financial condition. There can be no
assurance that distributors will continue to purchase the Company's products or
provide the Company's products with adequate promotional support. Failure of
distributors to do so could have a material and adverse effect on the Company's
business, operating results and financial condition.
In a number of international markets the Company has entered into
quasi-exclusive, multi-year agreements with independent companies that have also
licensed the use of the Company's name. These agreements are in place
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to increase the Company's opportunities and penetration in such markets where
the rapid adoption of client/server technologies is anticipated. While the
Company believes that to date these agreements have increased the Company's
penetration in such markets, there can be no certainty that this performance
will continue nor that these relationships will remain in place. The Company's
future cost of maintaining its business in these markets could increase
substantially if these agreements are not renewed.
DEPENDENCE ON THIRD-PARTY ORGANIZATIONS. The Company is increasingly
dependent on the efforts of third party "partners", including consultants,
system houses and software developers to implement, service and support the
Company's products. These third parties increasingly have opportunities to
select from a very broad range of products from the Company's competitors, many
of whom have greater resources and market acceptance than the Company. In order
to succeed, the Company must actively recruit and sustain relationships with
these third parties. There can be no assurance that the Company will be
successful in recruiting new partners or in sustaining its relationships with
its existing partners.
INTERNATIONAL SALES AND OPERATIONS. International sales represented 58%,
60% and 61% of the Company's net revenues for the years ended December 31, 1997,
1996 and 1995, respectively. A key component of the Company's strategy is
continued expansion into international markets, and the Company currently
anticipates that international sales, particularly in new and emerging markets,
will continue to account for a significant percentage of total revenues. The
Company will need to retain effective distributors, and hire, retain and
motivate qualified personnel internationally to maintain and/or expand its
international presence. There can be no assurance that the Company will be able
to successfully market, sell, localize and deliver its products in these
international markets. In addition to the uncertainty as to the Company's
ability to sustain or expand its international presence, there are certain risks
inherent in doing business on an international level, such as unexpected changes
in regulatory requirements and government controls, problems and delays in
collecting accounts receivable, tariffs, export license requirements and other
trade barriers, difficulties in staffing and managing foreign operations, longer
payment cycles, political and economic instability, fluctuations in currency
exchange rates, seasonal reductions in business activity during summer months in
Europe and certain other parts of the world, restrictions on the export of
critical technology, and potentially adverse tax consequences, which could
adversely impact the success of international operations. Sales of the Company's
products are denominated both in local currencies of the respective geographic
region and in US dollars, depending upon the economic stability of that region
and locally accepted business practices. Accordingly, any increase in the value
of the US dollar relative to local currencies in these markets may negatively
impact revenues, results of operations and financial condition. An increase in
the relative value of the US dollar would serve to increase the relative foreign
currency cost to the customer of a US dollar denominated purchase, which may
negatively affect the Company's sales in foreign markets. In addition, the US
dollar value of a sale denominated in a region's local currency decreases in
proportion to relative increases in the value of the US dollar. In addition,
effective copyright and trade secret protection may be limited or unavailable
under the laws of certain foreign jurisdictions. There can be no assurance that
one or more of such factors will not have a material adverse effect on the
Company's international operations and, consequently, on the Company's business,
operating results and financial condition.
PROPRIETARY RIGHTS. The success and ability of the Company to compete is
dependent in part upon the Company's proprietary technology. While the Company
relies on trademark, trade secret and copyright laws to protect its technology,
the Company believes that factors such as the technological and creative skills
of its personnel, new product developments, frequent product enhancements, name
recognition and customer support are more essential to establishing and
maintaining a technology leadership position. The Company has one patent with
respect to its SQLWINDOWS and CENTURA TEAM DEVELOPER products. The Company
believes that the ownership of patents is not presently a significant factor in
its business and that its success does not depend on the ownership of patents,
but primarily on the innovative skills, technical competence and marketing
abilities of its personnel. Also, there can be no assurance that others will not
develop technologies that are similar or superior to the Company's technology.
The source code for the Company's proprietary software is protected both as a
trade secret and as a copyrighted work. Despite these precautions, it may be
possible for a third party to copy or otherwise obtain and use their products or
technology without authorization, or to develop similar technology
independently. In addition, effective copyright and trade secret protection may
be unavailable or limited in certain foreign countries.
-11-
<PAGE>
The Company generally enters into confidentiality or license agreements
with its employees, consultants and vendors, and generally controls access to
and distribution of its software, documentation and other proprietary
information. Despite efforts to protect proprietary rights, unauthorized parties
may attempt to copy aspects of the Company's products or to obtain and use
information that is regarded as proprietary. Policing such unauthorized use is
difficult. There can be no assurance that the steps taken by the Company will
prevent misappropriation of the Company's technology or that such agreements
will be enforceable. In addition, litigation may be necessary in the future to
enforce intellectual property rights, to protect trade secrets or to determine
the validity and scope of the proprietary rights of others. Such litigation
could result in substantial costs and diversion of resources and could have a
material adverse effect on the Company's business, operating results and
financial condition.
There can be no assurance that third parties will not claim infringement by
the Company with respect to current or future products, and the Company expects
that it will increasingly be subject to such claims as the number of products
and competitors in the client/server and Internet connectivity software market
grows and the functionality of such products overlaps with other industry
segments. In the past, the Company has received notices alleging that its
products infringe trademarks of third parties. The Company has historically
dealt with and will in the future continue to deal with such claims in the
ordinary course of business, evaluating the merits of each claim on an
individual basis. There are currently no material pending legal proceedings
against the Company regarding trademark infringement. Any such third party
claims, whether or not they are meritorious, could result in costly litigation
or require the Company to enter into royalty or licensing agreements. Such
royalty or license agreements, if required, may not be available on terms
acceptable to the Company, or at all. If the Company was found to have infringed
upon the proprietary rights of third parties, it could be required to pay
damages, cease sales of the infringing products and redesign or discontinue such
products, any of which could have a material adverse effect on the Company's
business, operating results and financial condition.
MANAGEMENT OF POTENTIAL GROWTH. In recent years, the Company has
experienced both expansion and contraction of its operations each of which has
placed significant demands on the Company's administrative, operational and
financial resources. To manage future growth, if any, the Company must continue
to improve its financial and management controls, reporting systems and
procedures on a timely basis and expand, train and manage its work force. There
can be no assurance that the Company will be able to perform such actions
successfully. The Company intends to continue to invest in improving its
financial systems and controls in connection with higher levels of operations.
Although the Company believes that its systems and controls are adequate for the
current level of operations, the Company anticipates that it may need to add
additional personnel and expand and upgrade its financial systems to manage any
future growth. The Company's failure to do so could have a material adverse
effect upon the Company's business, operating results and financial condition.
LEGAL PROCEEDINGS. On September 17, 1997, Technology Venture (Software)
Holdings Limited, formerly known as Eagerquest Investments Limited
("Eagerquest") filed suit against the Company in the United States District
Court for the Central District of California alleging that the Company acted
improperly in terminating its contract with Eagerquest for the distribution
of the Company's products in the territories of Hong Kong and China and that
the Company's actions illegally damaged Eagerquest. The Company believes that
its actions were within its rights under its contract with Eagerquest and
that the allegations are without merit. The Company intends to defend itself
vigorously in this action and that the outcome will not have a material
adverse affect on the Company's financial situation or business prospects.
Other than the above, there are currently no material pending legal
proceedings against the Company or any of its subsidiaries. The Company
operates in an environment, however, where litigation may occur in the course
of its normal business operations. In the complex and volatile industry in
which the Company operates, disputes, litigation, regulatory proceedings and
other actions are a necessary risk of doing business. There can be no
assurance that the Company will not participate in such legal proceedings and
that the costs and charges will not have a material adverse impact on the
Company's future success.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Shareholders pursuant to this registration statement.
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INDEMNIFICATION OF OFFICERS AND DIRECTORS
Centura's Articles of Incorporation limit the liability of directors for
monetary damages arising from breach of their fiduciary duty to the maximum
extent permitted by the California Corporations Code ("California Law"). Such
limitation of liability does not affect the availability of equitable remedies
such as injunctive relief or recission. The limitation on monetary liability
also does not apply to liabilities arising under the federal securities laws.
Centura's Bylaws provide that Centura shall indemnify its directors and
officers to the fullest extent permitted by California Law, including
circumstances in which indemnification is otherwise discretionary under
California Law. The Company has entered into indemnification agreements with its
officers and directors containing provision which are in some respects broader
than the specific indemnification provisions contained in the California
Corporations Code. The indemnification agreements may require Centura, among
other things, to indemnify its directors against certain liabilities that may
arise by reason of their status or service as directors (other than liabilities
arising from willful misconduct of a culpable nature), to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified, and to obtain director's insurance if available on reasonable
terms.
Centura believes that the limitation provision in its Articles of
Incorporation and the indemnification provisions in its Articles of
Incorporation, Bylaws and indemnification agreements will facilitate Centura's
ability to continue to attract and retain qualified individuals to serve as
directors of Centura. Centura has also obtained directors and officers'
liability insurance covering, subject to certain exceptions, actions taken by
Centura's directors and officers in their capacities as such.
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 Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted against
the Company by such director, officer or controlling person in connection with
the securities being registered hereunder, the Company 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.
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ISSUANCE OF COMMON STOCK AND WARRANTS TO SELLING SHAREHOLDERS
On February 27, 1998, the Company (i) issued and sold to Computer
Associates International, Inc. ("CA") a common stock purchase warrant
exercisable for 500,000 shares of the Company's Common Stock, (ii) privately
placed 2,330,191 shares of its Common Stock and warrants to purchase 582,548
shares of its Common Stock to certain purchasers (the "Private Placement
Purchasers") pursuant to the terms of a Common Stock and Warrant Purchase
Agreement by and between the Company and the Private Placement Purchasers, and
(iii) issued to Rochon Capital Group, Ltd. ("Rochon") in consideration for
services rendered by Rochon in connection with the foregoing and related
transactions warrants to purchase 354,717 shares of its Common Stock. CA, the
Private Placement Purchasers and Rochon are also referred to collectively herein
as the "Selling Shareholders". This Prospectus covers the 3,767,456 shares of
the Company's Common Stock issued (or issuable upon exercise of the Warrants
issued) to the Selling Shareholders.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares in whole or in part, from time
to time on the over-the-counter market at prices and on terms prevailing at the
time of any such sale. Any such sale may be made in broker's transactions
through broker-dealers acting as agents, in transactions directly with market
makers or in privately negotiated transactions where no broker or other third
party (other than the purchaser) is involved. The Selling Shareholders will pay
selling commissions or brokerage fees, if any, with respect to the sale of the
Shares in amounts customary for the type of transaction effected. Each Selling
Shareholder will also pay all applicable transfer taxes and all fees and
disbursements of counsel for such Selling Shareholder incurred in connection
with the sale of shares.
Each Selling Shareholder has advised the Company that during such time as
such Selling Shareholder may be engaged in the attempt to sell Shares registered
hereunder, such person will:
(i) not engage in any stabilization activity in connection with any of
the Company's securities;
(ii) cause to be furnished to each person to whom Shares included herein
may be offered, and to each broker-dealer, if any, through whom Shares are
offered, such copies of this Prospectus, as supplemented or amended, as may be
required by such person;
(iii) not bid for or purchase any of the Company's securities or any
rights to acquire the Company's securities, or attempt to induce any person to
purchase any of the Company's securities or rights to acquire the Company's
securities other than as permitted under the Exchange Act;
(iv) not effect any sale of distribution of the Shares until after the
Prospectus shall have been appropriately amended or supplemented, if required,
to set forth the terms thereof; and
(v) effect all sales of Shares in broker's transactions through
broker-dealers acting as agents, in transactions directly with market makers or
in privately negotiated transaction where no broker or other third party (other
than the purchaser) is involved.
The Selling Shareholders, and any other persons who participate in the sale
of the Shares, may be deemed to be "Underwriters" as defined in the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
persons, and any profits received on resale of the Shares, may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Company has agreed to maintain the effectiveness of this Registration
Statement until the earlier of the sale of all the Shares registered pursuant to
this Prospectus or such date as the Company shall be satisfied that each holder
of Shares can sell all of the Shares it holds in any three-month period in
compliance with Rule 144 promulgated under the Securities Act, but in no event
after February 27, 2000. No sales may be made pursuant to
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<PAGE>
this Prospectus after such date unless the Company amends or supplements this
Prospectus to indicate that it has agreed to extend such period of
effectiveness.
The Company has agreed to indemnify the Selling Shareholders against
certain liabilities, including liabilities under the Securities Act.
SELLING SHAREHOLDERS
The following table sets forth certain information as of April 20, 1998, as
of which date 29,533,558 shares of the Company's Common Stock were issued and
outstanding, with respect to the Selling Shareholders:
<TABLE>
<CAPTION>
Shares Beneficially Shares of Shares Beneficially
Owned Prior Common Stock Owned After
Name Of Selling Shareholder to the Offering(1) Offered Hereby(1) the Offering(1)(2)
- ---------------------------- --------------------- ------------------ -------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Computer Associates International, Inc. 500,000 1.7% 500,000 0 *
One Computer Associates Plaza
Islandia, NY 11178-7000
Alfred University 33,306 * 33,306 0 *
c/o Bankers Trust
14 Wall Street, 4th Floor
Window 43
New York, NY
Account # 173539
Core Technology Fund, Inc. 261,368 * 261,368 0 *
c/o Bear Stearns
NSCC NY Window
55 Water Street
Concourse Level - South Building
New York, NY 10041
Account #483-95509
Executive Technology Fund L.P. 56,164 * 56,164 0 *
c/o Bear Stearns
NSCC NY Window
55 Water Street
Concourse Level - South Building
New York, NY 10041
Account #483-69762
Foundation Partners L.P. 31,840 * 31,840 0 *
c/o Commerce Bank
Bank of New York
One Wall Street - 3rd Floor
Window A
New York, NY 10004
Bank of New York Account #068008
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<PAGE>
<CAPTION>
Shares Beneficially Shares of Shares Beneficially
Owned Prior Common Stock Owned After
Name Of Selling Shareholder to the Offering(1) Offered Hereby(1) the Offering(1)(2)
- ---------------------------- --------------------- ------------------ -------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
The Matrix Technology Group N.V. 33,370 * 33,370 0 *
c/o Morgan Guaranty Trust
15 Broad Street
Level A Window
New York, NY 10015
Account # PBD-82464
Rochester Institute of Technology 98,315 * 98,315 0 *
c/o Bank of New York
One Wall Street -3rd Floor
Window A
New York, NY 10004
Account #071-395
Sci-Tech Investment Partners L.P. 84,711 * 84,711 0 *
c/o Bear Stearns
NSCC NY Window
55 Water Street
Concourse Level - South Building
New York, NY 10041
Account #483-53721
SG Partners, L.P. 176,314 * 176,314 0 *
c/o Bear Stearns
NSCC NY Window
55 Water Street
Concourse Level - South Building
New York, NY 10041
Account #483-67191
Tampsco II Partnership 13,186 * 13,186 0 *
c/o United Missouri Trust Company
One Battery Park Plaza - 8th Floor
New York, NY 10004
Account #29-0953-02-5
UMBTRU & Co. 3,297 * 3,297 0 *
c/o United Missouri Trust Company
One Battery Park Plaza - 8th Floor
New York, NY 10004
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<CAPTION>
Shares Beneficially Shares of Shares Beneficially
Owned Prior Common Stock Owned After
Name Of Selling Shareholder to the Offering(1) Offered Hereby(1) the Offering(1)(2)
- ---------------------------- --------------------- ------------------ -------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Yale University 347,965 1.2% 347,965 0 *
c/o Bankers Trust
14 Wall Street, 4th Floor
Window 43
New York, NY
Account # 109741-99
Yale Retirement Plan for Staff Employees 39,411 * 39,411 0 *
c/o State Street Bank and Trust Company
State Street Boston Securities Corp.
61 Broadway
TP Concourse Level
New York NY 10006
Account #7CO3
Camelot Capital LP 471,698 1.6% 471,698 0 *
10 Glenville St.
Greenwich, CT 06831
Camelot Offshore Fund Limited 141,510 * 141,510 0 *
10 Glenville St.
Greenwich, CT 06831
Dean Witter Reynolds, (3) 334,906 1.1% 147,406 187,500 *
Custodian for John W. Bowman
Tr. IRA Rollover Apr. 2, 92
5 World Trade Center, 6th Floor
New York, NY 10048
Scott Broomfield (4) 669,811 2.2% 294,811 375,000 1.3%
1921 Adelaide Way
San Jose, CA 95124
John Griffin (5) 164,073 * 147,406 16,667 *
"Akenfield"
35 Greenhill Road
Otford, Kent, U.K. TN14 5RR
Larry Hill (6) 88,444 * 88,444 0 *
816 Mountain View Drive
Lafayette, CA 94549
Ken Kneis 147,406 * 147,406 0 *
560 Montwood Circle
Redwood City, CA 94061
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<CAPTION>
Shares Beneficially Shares of Shares Beneficially
Owned Prior Common Stock Owned After
Name Of Selling Shareholder to the Offering(1) Offered Hereby(1) the Offering(1)(2)
- ---------------------------- --------------------- ------------------ -------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
William H. Lane III and Kathleen M.(7)
Lane Trust DTD December 26, 1995 482,311 1.6% 294,811 187,500 *
10695 Magdalena Avenue
Los Altos Hills, CA 94024
Rochon Capital Group, Ltd. (8) 310,377 1.0% 310,377 0 *
16 Mary Street, Suite 2000
San Rafael, CA 94901
Elizabeth Tracy (9) 44,340 * 44,340 0 *
16 Mary Street, Suite 2000
San Rafael, CA 94901
</TABLE>
______________________________
* Less than 1%
(1) Information with respect to beneficial ownership is based upon information
contained in filings made by certain Selling Shareholders with the
Securities and Exchange Commission, and information obtained from the
Company's transfer agent and certain of the Selling Shareholders. Includes
with respect to the following persons or entities warrants exercisable for
the following number of shares of the Company's Common Stock: Computer
Associates International, Inc. - 500,000; Alfred University - 6,661; Core
Technology Fund, Inc. - 52,274; Executive Technology Fund L.P. - 11,233;
Foundation Partners L.P. - 6,368; The Matrix Technology Group N.V. - 6,674;
Rochester Institute of Technology - 19,663; Sci-Tech Investment Partners
L.P. - 16,942; SG Partners, L.P. - 35,263; Tampsco II Partnership - 3,297;
Yale University - 69,593; Yale Retirement Plan for Staff - 7,882; Camelot
Capital LP - 94,340; Camelot Offshore Fund Limited - 28,302; John Bowman -
29,481; Scott Broomfield - 58,962; John Griffin - 29,481; Larry Hill -
17,689; Ken Kneis - 29,481; William H. Lane III and Kathleen M. Lane Trust
DTD December 26, 1995 - 58,962. Includes with respect to the following
individuals stock options exercisable within 60 days of April 20, 1998:
John Bowman - 187,500; Scott Broomfield - 375,000; John Griffin - 16,667;
Kathleen M. Lane - 187,500.
(2) Assumes sale of all Shares offered hereby and no other purchases or sales
of the Company's Common Stock. See "Plan of Distribution."
(3) John Bowman is Senior Vice President, Finance and Operations and Chief
Financial Officer of the Company.
(4) Scott Broomfield is President, Chief Executive Officer and Chairman of the
Board of Directors of the Company.
(5) John Griffin is Vice President, International Sales of the Company.
(6) Larry Hill is a principal of Hickey & Hill Incorporated ("H&H") with whom
the Company entered into a letter agreement dated November 5, 1997 (the
"H&H Agreement") for the services of Scott Broomfield, John Bowman and
Kathy Lane, the Company's Chief Executive Officer and President, Chief
Financial Officer, and principal marketing officer, respectively. The H&H
Agreement was subsequently amended by consent of the Company's Board of
Directors on February 26, 1998 and March 17, 1998.
(7) Kathleen M. Lane, a trustee of the William H. Lane III and Kathleen M. Lane
Trust DTD December 26, 1995 is Senior Vice President, Marketing of the
Company.
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<PAGE>
(8) Rochon Capital Group, Ltd. acted as the Company's financial adviser in
connection with the following transactions, all of which closed on
February 27, 1998: the sale by Computer Associates International, Inc. of
the Company's promissory note (the "CA Note") plus accrued interest in the
amount of $12,251,000 to Newport Acquisition Company No. 2, LLC ("NAC");
the conversion of the CA Note by NAC into 11,415,094 shares of the
Company's Common Stock; the issuance and sale by the Company of a Common
Stock Warrant exercisable for 500,000 shares to CA; and the issuance and
sale of Common Stock and Warrants to certain investors totaling, upon
exercise, 2,912,739 shares of Common Stock in a Private Placement of the
Company's securities.
(9) Elizabeth Tracy is a registered representative of Rochon Capital Group,
Ltd.
Except as described in footnotes 3 through 9 to the foregoing table, no
Selling Shareholder has had any material relationship with the Company or any of
its predecessors or affiliates within the last three years.
LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of the
Common Stock offered hereby will be passed upon for the Company by Venture Law
Group, A Professional Corporation, 2800 Sand Hill Road, Menlo Park, California
94025. As of the date of this Registration Statement, certain members of Venture
Law Group and investment partnerships of which members of Venture Law Group are
partners beneficially own 28,000 shares of the Registrant's Common Stock.
EXPERTS
The financial statements of Centura Software Corporation incorporated in
this Prospectus by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997 have been incorporated in reliance upon the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in accounting and auditing.
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