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As filed with the Securities and Exchange Commission on June 30, 2000
REGISTRATION NO. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TIMELINE, INC.
Name of Small Business Issuer in Its Charter
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STATE OF WASHINGTON 7372 91-1590734
State or Jurisdiction of Incorporation Primary Standard Industrial Classification I.R.S. Employer Identification
or Organization Code Number Number
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3055 - 112TH AVENUE N.E., SUITE 106 CHARLES R. OSENBAUGH, PRESIDENT
BELLEVUE, WASHINGTON 98004 TIMELINE, INC.
(425) 822-3140 3055 - 112TH AVENUE N.E., SUITE 106
Address and Telephone Number of Principal Executive Offices BELLEVUE, WASHINGTON 98004
(425) 822-3140
Name, Address and Telephone Number of
Agent for Service
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Copies of all communications to the foregoing to be sent to:
TIMOTHY M. WOODLAND
CAIRNCROSS & HEMPELMANN, P.S.
701 FIFTH AVENUE, SUITE 7000
SEATTLE, WASHINGTON 98104-7014
(206) 587-0700
Approximate date of proposed sale to the public: FROM TIME TO TIME AS DESCRIBED
IN THE PROSPECTUS AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box:[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box:[XX]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box: [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Securities to be Amount to be Offering Price Aggregate Amount of
Registered Registered Per unit(1) Offering Price(1) Registration Fee
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COMMON STOCK, NO PAR
VALUE PER SHARE 300,000 SHARES [$2.9375] [$881,250] [$232.65]
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(1) Estimated solely for the purpose of calculating the registration fee, based
on the average of the high and low prices of the Common Stock on the OTC
Bulletin Board on June 28, 2000, pursuant to Rule 457(c).
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 HEREAFTER 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 SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
300,000 SHARES
TIMELINE, INC.
COMMON STOCK
This prospectus relates to 300,000 shares of common stock of
Timeline, Inc. that are being offered for sale by a shareholder of the Company.
The share ownership for the selling shareholder is described in greater detail
below in the section entitled "Selling Shareholder." The shares are being
registered to permit the selling shareholder to sell the shares from time to
time in the public market. The selling shareholder may sell the common stock
through ordinary brokerage transactions, directly to market makers of our
shares, or through any other means described in the section entitled "Plan of
Distribution."
We cannot assure you that the selling shareholder will sell all
or any portion of the common stock offered hereby. The shares of common stock
offered by the selling shareholder generally may be offered for sale at market
prices prevailing at the time of sale or in negotiated transactions at prices
related to prevailing market prices. We will not receive any of the proceeds
from the sale of shares offered by the selling shareholder. We have paid the
expenses of preparing this prospectus and the related registration statement.
Our common stock is traded on the OTC Bulletin Board under the
symbol "TMLN." On June 28, 2000, the last sale price of the common stock as
reported on the OTC Bulletin Board was $2.625 per share.
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SEE "RISK FACTORS" ON PAGE 7 FOR CERTAIN INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS
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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 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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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any documents we file
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's web site at www.sec.gov.
The SEC allows us to "incorporate by reference" the information
we file with them, which means that we can disclose important information to you
by referring you to those documents. We incorporate by reference the documents
listed below and any future filings made by us with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until the selling shareholder sell
all of the securities that we have registered in this prospectus. Information
that we file later with the SEC will automatically update and supersede this
information.
1. Our Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2000.
2. Our Quarterly Reports on Form 10-QSB for the fiscal
quarters ended June 30, 1999, September 30, 1999 and
December 31, 1999.
3. The description of our common stock contained in our
registration statement pursuant to Section 12 of the
Exchange Act, as amended from time to time.
You may request a copy of these filings, at no cost, by writing
or telephoning us at the following address: 3055 - 112th Avenue N.E., Suite 106,
Bellevue, Washington 98004, (425) 822-3140.
You should rely only on the information incorporated by reference
or provided in this prospectus or any prospectus supplement. We have authorized
no one to provide you with different information. We are not making an offer of
these securities in any state where the offering is not permitted. You should
not assume that the information in this prospectus is accurate as of any date
other than the date on the front of the document. In this prospectus,
"Timeline," "we," "us," and "our" refer to Timeline, Inc.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Forward-looking statements discuss our
business, prospects, current plans, intentions, beliefs and expectations and
statements of future economic performance. Statements containing terms such as
"believes," "does not believe," "plans," "expects," "intends," "estimates,"
"anticipates" and other phrases of similar meaning are considered to contain
uncertainty and are forward-looking statements. To assist readers in identifying
forward-looking statements, we have attempted to mark sentences containing such
statements with a single asterisk (*) and paragraphs containing only
forward-looking statements with double asterisks (**). However, we cannot assure
you that all forward-looking statements have been identified.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause our actual results in future periods to differ
materially from what is currently anticipated. We make cautionary statements in
the "Our Company" and "Risk Factors" sections of this prospectus and in other
parts of this prospectus. You should read these cautionary statements as being
applicable to all related forward-looking statements wherever they appear in
this prospectus, in the materials referred to in this prospectus, in the
materials incorporated by reference into this prospectus, or in our press
releases.
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No forward-looking statement is a guarantee of future
performance, and you should not place undue reliance on any forward-looking
statement. We are not obligated to revise any forward-looking statements in
order to reflect events or circumstances that may happen in the future. Please
carefully review and consider the various disclosures we are making in this
report and in our other reports to be filed with the SEC that attempt to advise
you of the risks and factors that may affect our business.
OUR COMPANY
OUR BUSINESS
We develop, market and support company-wide financial reporting,
budgeting and management software. Our software products enable customers to
automatically access and distribute business and accounting information in a
secure environment and with full accounting controls. Although we have products
that permit the processing of transactions, our marketing and development
strategy is focused on products that report accounting data in meaningful and
flexible formats. These reporting products allow our customers to gather and
distribute business information throughout their companies while maintaining
maximum flexibility in determining the types of transaction processing systems
they will use. We allow the end-user to receive information through a web
browser, distributed Excel workbooks, data marts or actual reports delivered via
e-mail.
Many financial and management reporting products are focused on
the presentation, either electronically or on paper, of processed data in
formatted reports. While our products can present information in formatted
reports, our technology can also distribute an actual database of information (a
"data mart") to an end-user's computer. These databases or data marts are built
through selective criteria that limit the data mart to relevant data for each
particular end-user. This design is intended to allow for the distribution of
manageable packets of data over networks or the Internet while maintaining
corporate security. Each database can be arranged in a unique "view," or
"orientation," as desired by the end-user. The end-user may then view the data
in a standard corporate report format or through a personal library of
customized report formats. Additionally, the data resides in Microsoft Office,
which makes it automatically available for use in Microsoft(R) Excel
spreadsheets and all other Microsoft Office tools.
We believe that our proprietary technology allows customers to
avoid time-consuming, error-prone and expensive data entry.* Our products allow
customers to avoid data entry by facilitating an efficient exchange of
information between the desktop computer and the underlying hardware platform
and accounting system. Our products also work with both new and old accounting
systems. Many customers are changing their accounting systems from larger
mainframe- and minicomputer-based systems to newer "client/server" systems that
store information on a server that in turn makes the information available to a
desktop computer (the "client"). Our products facilitate an efficient exchange
of information between the client and server.
Other businesses have elected to retain their existing, or
"legacy" accounting systems. Our business strategy is focused on meeting the
financial management needs of customers with both types of accounting systems by
providing products that accept and report on data from both legacy and newer
client/server systems.
Our Timeline(R) Analyst and Timeline(R) Server product lines are
designed to gather data from multiple operating systems and hardware platforms,
old and new, for translation into a Microsoft client/server environment. Our
products enable our customers to:
- perform financial reporting and management functions;
- connect to multiple types of operating systems;
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- efficiently distribute data to desktop computers;
- perform consolidations and allocations; and
- perform budgeting functions.
The flexibility of our Timeline products make it possible for our customers to
deliver data for reporting and analysis throughout their business enterprise
without purchasing a new, expensive computer system.
In addition to providing an infrastructure to deliver data,
Timeline provides a number of processes to enhance or augment sophisticated
financial reporting. These include budgeting, allocations, consolidations,
foreign currency conversion and security.
We believe that our products can improve the accounting and
reporting software of other software vendors.* Our products are designed to
enhance existing accounting and reporting software by adding functions and
flexibility that the software may not have. As a result, our products can
eliminate weaknesses or competitive disadvantages in other accounting and
reporting software. Our preferred method of product distribution is through
transaction-based software vendors that bundle our products or distribute our
products in conjunction with their accounting and reporting systems. We believe
that a majority of our license fee revenue in fiscal year 2001 will be generated
by licensing and distribution agreements with these third-party vendors.*
At March 31, 2000, we employed 33 full-time employees and two
part-time employees.
OUR TECHNOLOGY
Our software works with a customer's entire computing
infrastructure to create a reporting engine that can accept and organize data,
with full accounting controls, from both new and old accounting systems. Our
proprietary architecture, in conjunction with our proprietary generation engine,
is designed to accomplish this task. The compatibility of our software with
older legacy accounting systems allows a customer to preserve existing computer
hardware and software systems or transition to a client/server environment while
providing enhanced reporting capabilities. If a customer is already using
client/server systems, our technology provides distributed packets of data that
enhance the productivity of reporting, budgeting and analysis professionals
throughout the enterprise. Our products use patent-protected driver technology
that not only automates the transfer of data from accounting and information
systems into desktop databases, but can automate rebuilding databases to reflect
changes in the underlying accounting information. This eliminates the costly
process of maintaining databases in both our software and the underlying
accounting system.
The following is a brief discussion of our three primary
proprietary technologies:
- Timeline Architecture. Our architecture contains a
multi-dimensional data segmentation capacity that exceeds
the capacity of all accounting data structures known to
the Company. This capacity enables our reporting products
to accept data from multiple transaction processing
systems concurrently, to combine data into a single
database and to add reporting relationships not present in
the source system(s). For example, we can (a) take data
from a customer's general ledger, human resources/payroll,
sales and order processing systems, (b) combine all of the
data in one database, and (c) allow the customer to use
the combined data for payroll and sales analysis.
- Generation Engine. Our generation engine enables our
products to automate the building of Microsoft-compatible
databases. Prior technologies required substantial human
intervention to manually build tables, input forms and
manipulate other
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attributes of the data. The generation engine allows a customer
to build a wide range of databases for distribution throughout the business
enterprise.
- Interface Technology. Our interface technology allows our
products to (a) discern the structure of existing
transaction-based systems, (b) extract data from one or
more transaction processing systems, and (c) feed data to
the generation engine. Our product is tied directly to the
underlying accounting systems and changes made in these
underlying systems (such as adding a new accounting
relationship for a newly purchased company) are
automatically reflected in our data marts. Prior
technologies required substantial human intervention to
manually maintain structures in both the transaction and
reporting systems, and maintain the synchronization of the
accounting and information systems.
We have been granted three patents by the U.S. Patent and
Trademark Office on our technology and have a total of 70 issued claims. We
believe additional International patents will be granted during fiscal 2001.*
OUR PRODUCTS
Our products make it possible to distribute information and data
marts from an underlying accounting system to the desktop. Our primary products,
Timeline Analyst and Timeline Server, consist of a set of client/server software
applications based on Microsoft Windows(TM)/Windows NT(TM) and Microsoft Office
operating systems. Once data is contained in a local Microsoft Office database,
the data is available for each end-user to develop his or her own analysis or
personal reports using Microsoft or Timeline-enhanced technology. The
personalized data on the desktop is as accurate as is the data in the underlying
accounting system.
Timeline Server is the central warehouse of financial and
management reporting data structured in a multi-dimensional relational database.
Timeline Server includes traditional financial reporting features including
budgeting, foreign currency conversion, consolidations and allocations. The
various Timeline Server functions provide desktop and network reporting based on
information contained in one or more underlying accounting systems. While this
product can provide many transaction-driven benefits, our market focus is to use
Timeline Server as a data warehouse to handle large volumes of data in
conjunction with Timeline Analyst.
Timeline Analyst is a stand alone "data mart," which enables the
user to view, create and distribute reports in Microsoft Excel based on data
from one or more underlying accounting systems. Timeline Analyst also works with
our server-based software to distribute reporting databases to desktop end-users
throughout a business enterprise.
Manager is a product designed for the "mid-level" market
(businesses with approximately six to 100 desktop users). This product completes
the Timeline Analyst suite by allowing Timeline Analyst users to distribute
packets of information and assign new reporting relationships at the desktop
level.
Timeline Budgeting consists of applications and tools that access
and manipulate the underlying Timeline information and data marts. Timeline
Budgeting offers our customers a combination of Microsoft Excel interfaces and
flexible access to and manipulation of information. The functions offered by
Timeline Budgeting include automatic dissemination of budget templates,
consolidation of budget input, allocations, and multiple spread methods.
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YEAR 2000 DISCLOSURE
We experienced no material Y2K issues or problems in connection
with our internal operations, third-party relationships or software products. We
will continue to monitor our software products to ensure no problems arise
either with regard to leap year or Y2K issues. We anticipate no material
additional costs.*
RECENT DEVELOPMENTS SUBSEQUENT TO 2000 FISCAL YEAR
On May 31, 2000, we announced that we have entered into a binding
letter of intent to acquire all of the outstanding equity of Analyst Financials
Limited, the European distributor for our products, in which we currently own
12.5% of the outstanding equity. Upon completion of the transaction, Analyst
Financials will become a wholly-owned subsidiary responsible for our operations
throughout Europe, the Middle East and Africa. The purchase price for the equity
of Analyst Financials will be approximately Pound Sterling875,000. We have the
option to pay the purchase price in cash, our common stock or a combination of
cash and our common stock. We expect to complete the transaction on a
stock-for-stock basis.* Under the terms of the letter of intent, the purchase
price is subject to adjustment based on the results of operation through the
closing of the transaction. We have agreed to deposit with Analyst Financials a
forfeitable bond of Pound Sterling50,000 once all of the shareholders of Analyst
Financials have signed a letter of intent. If the transaction is not completed,
we may forfeit the bond.
The parties have agreed to use best efforts to complete the
transaction on or before June 30, 2000. However, there are certain contingencies
that must be satisfied or waived before completion of the transaction. As a
result, we cannot assure you that the transaction will be completed within the
expected timeframe, or at all.**
RISK FACTORS
In addition to other information in this prospectus or
incorporated in this prospectus by reference, you should consider carefully the
following factors in evaluating Timeline and our business:
OUR ABILITY TO OPERATE PROFITABLY IS UNCERTAIN.
Our historical operations have not been consistently profitable.
We have an accumulated deficit of $5,451,435 at March 31, 2000. Our license
revenues have fluctuated substantially from quarter to quarter in the past and
are likely to continue to fluctuate substantially in the future. To become
consistently profitable, we must:
- increase the licensing and maintenance revenues of our
existing client/server products;
- increase the licensing of patented technology to third
parties;
- develop new products; and
- control our expenses.
We cannot assure you that we will meet these objectives or
achieve sustained profitability. Although we believe that current cash balances
and anticipated operating results are sufficient to fund our operations in
fiscal 2001, we can give no assurances that sufficient sales will be generated
or that sufficient financing will be obtained to enable us to obtain or sustain
profitability.* This could have a detrimental effect on the market price of our
stock.
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OUR PROFITABILITY DEPENDS ON THE SUCCESS OF OUR PRODUCTS.
Our future profitability will depend upon the successful
development, marketing and licensing of our existing product line and other new
products.* We cannot give you any assurances that:
- our products will achieve or sustain revenue growth;
- enhancements to our products and other applications can be
successfully developed;
- demand for our products will continue to grow or be
sustained; or
- our products will successfully compete with the products
of others.
To the extent demand for our products does not develop due to competition, poor
product performance, negative assessments by our customers of our financial
resources and expertise, technological change or other factors, our operations
may be materially and adversely affected.
WE RELY ON LICENSING AND DISTRIBUTION RELATIONSHIPS.
We rely on agreements with third-party licensees and distributors
for sales and licensing of our products. Our agreements with licensees and
distributors are generally not exclusive, may be terminated by either party
without cause, and generally do not impose minimum licensing or purchase
requirements. The effectiveness of third-party licensing and distribution
agreements depends in part on:
- market acceptance and distribution channels of our
third-party licensee's and distributor's products and
services;
- our ability to integrate our products with those of the
third party; and
- the continued viability and financial stability of such
third parties, which, in turn, depends on the overall
economic health of the software industry.
We cannot assure you that these licensees and distributors will perform their
contractual obligations as expected or that we will derive any additional
revenue licensing and distribution arrangements. Also, we can give no assurances
that we will successfully develop new relationships or maintain existing
relationships with third-party licensees and distributors. Finally we cannot
assure you that such licensees and distributors will be able to market our
products effectively, or that any existing licensee or distributor will continue
to represent our products. A failure of any of these events to occur could
materially adversely affect our results of operations.
In addition, Analyst Financials relies in part on its direct
sales force for some of its sales and licensing efforts, especially in the
greater London area. If we close the acquisition of Analyst Financials, we
expect to continue this direct sales effort through Analyst Financials.* Over
the last several years, we have moved away from the direct sales model in the
U.S. and have relied more on licensing through our third-party distribution
channels. There are no assurances that we will be able to profitably or
successfully maintain the direct sales model through Analyst Financials.
EVEN IF WE CLOSE THE ACQUISITION WITH ANALYST FINANCIALS, WE MAY
NOT BE SUCCESSFUL IN INTEGRATING OUR BUSINESS OPERATIONS WITH
ANALYST FINANCIALS, AND WE MAY FACE ADDITIONAL RISKS FOLLOWING
THE ACQUISITION.
On May 31, 2000, we announced that we have entered into a letter of intent to
acquire Analyst Financials Limited, the European distributor for our products,
of which we currently own 12.5%. There are no assurances that we will be
successful in consummating this acquisition in the timing expected, or at all.
Integrating our operations with those of Analyst Financials after the
acquisition may be difficult and time consuming. The integration of our combined
operations may temporarily distract management from
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the day-to-day business of the combined company, and we may fail to manage this
integration effectively or to achieve any of the anticipated benefits that both
companies hope will result from the acquisition. A failure to effectively
integrate Analyst Financials could materially and adversely affect our business.
The potential future acquisition of Analyst Financials is subject
to the risks commonly encountered in such transactions, including, among others:
- difficulties associated with assimilating the personnel
and operations of the acquired business;
- the risk that we will not achieve expected financial
results or strategic goals for the acquired business;
- the potential disruption of its ongoing business;
- the diversion of significant management and other
resources; and
- the need to impose and maintain uniform standards,
controls, procedures and policies.
The potential future acquisition of Analyst Financials is also
subject to risks related to international operations, including, among others:
- unexpected changes in regulatory requirements;
- difficulties in staffing and managing foreign operations;
- differing employment laws and practices, and cultural
barriers in foreign countries;
- longer payment cycles and seasonal reductions in business
activity during the summer months in Europe and some
other parts of the world;
- currency exchange fluctuations; and
- potentially adverse tax consequences.
Any of these factors could adversely affect the success of our operations, our
financial condition and results of operations.
WE ARE SUBJECT TO PENDING LEGAL PROCEEDINGS.
From time to time we have been, and expect to continue to be,
subject to legal proceedings and claims in the ordinary course of our business.*
Such legal proceedings could expose us to liability and require the expenditure
of significant financial and managerial resources, which could harm our
business.
In March 1999, we filed a lawsuit against Sagent Technologies,
Inc., seeking monetary damages and an injunctive relief. Our claims are based on
the alleged unauthorized licensing by Sagent of certain products that we believe
infringe on our patent rights under U.S. Patent Nos. 5,802,511, 6,023,694 and
6,026,392. The litigation process is in the discovery phase, and the trial is
set for January 2001. From time to time, we may pursue litigation against other
third parties to enforce or protect our rights under these patents or our
intellectual property rights generally.*
In July 1999, Microsoft Corporation sued us and claimed that we
violated a June 1999 patent license agreement between Microsoft and us. We
believe that the claims made by Microsoft have no merit and intend to vigorously
defend against this lawsuit. This litigation process is in the discovery phase,
and the trial is set for December 2000.
In December 1999, Clarus Corporation filed a declaratory judgment
action against us in Atlanta, Georgia requesting that the court find that
Clarus' software products do not infringe our U.S. Patent No. 5,802,511. Clarus
also requested that this patent be declared invalid. Subsequently, in March
2000, Clarus voluntarily dismissed its lawsuit without prejudice.
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WE MAY NOT BE ABLE TO ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS,
AND OTHERS MAY CLAIM THAT WE ARE INFRINGING THEIR INTELLECTUAL
PROPERTY RIGHTS.
We rely on a combination of patents, copyright, trademark and
trade secrecy laws, confidentiality procedures and contractual provisions to
protect our intellectual property rights. We attempt to protect our software,
documentation and other written materials under patent, trade secret and
copyright laws, which afford only limited protection. We have received three
U.S. patents and have filed for patent protection in certain foreign countries.
Despite our efforts to protect our intellectual property rights:
- laws and contractual restrictions may not be sufficient
to prevent misappropriation of our technology or deter
others from developing similar technologies;
- current federal laws that prohibit unauthorized copying
and distribution of software provide only limited
protection from software "pirates", and effective patent,
trademark, copyright and trade secret protection may be
unavailable or limited in foreign countries;
- other companies may claim common law trademark rights
based upon state or foreign laws that precede the federal
registration of our trademarks; and
- policing unauthorized use of our products and trademarks
is difficult, expensive and time-consuming, and we may be
unable to determine the extent of this unauthorized use.
Spending additional resources on research and development could
adversely affect our financial condition and results of operation. We intend to
protect our patent rights against infringement through negotiation and
litigation, if necessary.* As described above, we are currently involved in a
number of lawsuits, including a claim against Sagent Technology, Inc. for
infringement of one of our patents and a suit against us by Microsoft
Corporation for a claim of breach of contract. Such litigation is costly and we
cannot assure you that we will be successful.
We cannot assure you that our intellectual property protections
will be adequate or that third parties will not independently develop
substantially similar products, services and technology. Although we believe our
products, services and technology do not infringe on any proprietary rights of
others, as the number of software products available in the market increases and
the functions of these products further overlap, we may become increasingly
subject to infringement claims. These claims, with or without merit, could
result in costly litigation or might require us to enter into royalty or
licensing agreements, which may not be available on terms acceptable to us.**
WE RELY ON LICENSE REVENUE FROM A LIMITED LINE OF PRODUCTS.
While in the immediate future we expect revenue from licensing
our patent rights, this is viewed as a temporary market situation.*
Product-license revenues and related services from our Timeline Analyst and
Timeline Server products accounted for a large percentage of our total revenues
during fiscal 2000. We expect revenues from our Timeline Analyst and Timeline
Server products to account for substantially all of our long-term future
revenues.* As a result, factors adversely affecting the demand for our Timeline
Analyst and Timeline Server products, such as competition, pricing or
technological change, could materially adversely affect our business, financial
condition and operating results. Our future financial performance will
substantially depend on our ability to sell current versions of the Timeline
Analyst and Timeline Server products and our ability to develop and sell
enhanced versions of Timeline Analyst and Timeline Server products.
WE RELY ON MICROSOFT PRODUCTS.
We have developed all of our client/server products to function in the Microsoft
Windows and/or Windows NT environments, including the recently introduced
Windows 2000. We anticipate that our
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future products will also be designed for use in connection with Microsoft
software products such as its Windows ME, expected to be introduced later this
year.* In light of this product strategy, sales of our new products would be
materially and adversely affected by market developments adverse to Microsoft
Windows, Windows NT, Windows 2000, Windows ME or other future Microsoft software
products. Our success in developing products for use with Microsoft software
products depends on our ability to gain timely access to, and to develop
expertise in, current and future Microsoft software products. We cannot assure
you that we will be able to develop expertise in, and continue to develop
products for, Microsoft software products. Moreover, the abandonment by
Microsoft of, or any adverse change to, its current operating system product
line, strategy or business operations would materially and adversely affect our
business. We cannot predict the impact, if any, that the current anti-trust
lawsuit against Microsoft will have on our business or products.
OUR OPERATING RESULTS MAY VARY SIGNIFICANTLY.
Our results of operations have historically varied substantially
from period to period (quarterly or otherwise), and we expect they will continue
to do so.* Fluctuations in our operating results have resulted, and may result
in the future, from the following factors:
- the size and timing of product or patent licensing
agreements and customer orders for our products;
- the timing of the introduction and customer acceptance of
new products or product enhancements by us or our
competitors;
- changes in pricing policies by us or our competitors; and
- changes in general economic conditions.
Over the past several years, we have made great efforts to reduce our operating
and other expenses, including significant reductions in our sales and marketing
staff and research and development activities. We cannot assure you that these
expense reductions will have the desired result of enabling us to achieve
profitability or that they will not have adverse effects on us. In addition, we
are currently more reliant on licensing and distribution arrangements and less
on direct sales, and accordingly we expect that timing of revenues will
fluctuate from quarter to quarter.* If we increase our direct sales and
marketing efforts or undertake research and development not funded by third
parties, our operating expenses would increase and may have an adverse impact on
our results of operations. Any of these fluctuations may cause significant
variations in periodic results of operations. We do not take any actions
specifically designed to limit fluctuations in our periodic results of
operations. Because a significant portion of our expenses, particularly
personnel costs and rent, are relatively fixed in advance of any particular
quarter, shortfalls in revenue caused by a fluctuation of licensing and
distribution revenue may cause significant variation in operating results in any
particular quarter.
OUR ABILITY TO MANAGE GROWTH SUCCESSFULLY IS UNCERTAIN.
In the event we successfully close our potential acquisition of
Analyst Financials, this acquisition will place significant demands on our
management and other resources. To manage growth effectively, we must continue
to improve our operational, financial and other management processes and
systems. Our success also depends largely on management's ability to maintain
high levels of employee utilization, project and instructional quality and
competitive pricing for our services. We cannot assure you that we will be
successful in managing our growth.
WE MAY NEED ADDITIONAL FINANCING.
Our net working capital (excluding deferred revenue) at March 31,
2000 was approximately $5,815,000. Our capital needs in the future will depend
upon factors such as:
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<PAGE> 12
- market acceptance of our products and any other new
products we develop;
- the success of our third-party software licensing and
distribution arrangements;
- our ability to license our patents; and
- our ability to develop and maintain sustained maintenance
and support revenue.
None of these factors can be predicted with certainty.
We may need substantial additional financing in the future for
which we have no commitments or arrangement. We cannot assure you that any
additional financing, if required, will be available on terms acceptable to us.
If we raise additional funds by selling stock, the percentage ownership of our
then current stockholders will be reduced.* Our inability to obtain required
financing could have a material adverse effect on our results of operations and
could cause us to significantly reduce or suspend our operations, seek a merger
partner, sell certain of our assets, sell additional securities on terms which
are highly dilutive to existing investors, or obtain funds through arrangements
that are unfavorable to us.
OUR INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE.
To remain competitive, we must develop new software products
while enhancing and improving our existing software programs. The development of
software products is characterized by rapid technological change, changes in
user and customer requirements and preferences, frequent new product and service
introductions embodying new technologies and the emergence of new industry
standards and practices that could render our existing proprietary technology
and systems obsolete. Our success will depend on our ability to maintain
compatibility with existing and future Microsoft Windows, Windows NT, Windows
2000 and other operating environments, database systems and development tools.*
There will be a material adverse effect on our results of operations if we fail
to anticipate or respond promptly and adequately to changes in technology and
customer preferences, or if there are any significant delays in our product
development or introductions.* We cannot assure you that we will be successful
in developing new products or enhancing our existing products on a timely basis,
or that such new products or product enhancements will achieve market
acceptance.
WE MAY BE SUBJECT TO LIABILITIES ASSOCIATED WITH NEW PRODUCTS.
Software products frequently contain errors or defects,
especially when first introduced or when new versions or enhancements are
released. Although we intend to subject our new software products and new
versions and enhancements to vigorous testing prior to their release, our
products may contain errors or defects.* These errors or defects may result in
unexpected re-programming costs, shipping costs and other expenses. Although our
license agreements with our customers contain provisions designed to limit our
exposure to potential product liability claims, any errors or defects could also
result in liability claims against us by the consumers of our products. Also,
we, Microsoft, or our competitors may announce new products, capabilities or
technologies which have the potential to replace or shorten life cycles of our
existing products and which may cause customers to defer purchasing our existing
products. Delays or difficulties associated with new product introductions or
product enhancements could have a material adverse effect on our results of
operations. Any of the foregoing events could have a negative impact on our
business or financial condition.
WE FACE INTENSE COMPETITION IN OUR BUSINESSES.
The business information software market is highly competitive.
We believe that our primary competition is software vendors such as Hyperion
Solutions, Inc., Comshare, Inc., FRX Software Corporation, Cognos Corporation,
and various budgeting vendors such as Adaytum, Inc. and Pillar by Hyperion.*
Many of our competitors in the consulting arena have substantially greater
financial,
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<PAGE> 13
management, marketing and technical resources than we do. Because there are
minimal barriers to entry into the software market, we believe that competition
will continue to proliferate.* The market for our products is characterized by
significant price competition, and we expect that our products will face
increasing pricing pressures.*
Many of our current and potential competitors have
well-established relationships with our potential customers, have extensive
knowledge of the markets serviced by our customers, and more extensive
development, sales and marketing resources. As a result, our competitors may be
able to respond more quickly to new or emerging technologies and changes in
customer requirements, or to devote greater resources to the development,
promotion and sale of their products than we are able to. Such competition could
seriously harm our ability to sell products on favorable terms. We cannot assure
you that we will be able to compete successfully against current and future
competition, and the failure to do so would negatively impact our business and
financial condition.
OUR SUCCESS DEPENDS ON OUR ABILITY TO RECRUIT AND RETAIN
QUALIFIED INFORMATION TECHNOLOGY PROFESSIONALS AND SALES AND
MARKETING PERSONNEL.
Our future success depends in large part on our ability to
attract, develop and retain highly skilled information technology professionals,
particularly project managers, consultants, software engineers and programmers.
Highly skilled information technology professionals are in high demand and are
likely to remain a limited resource for the foreseeable future. In addition, one
of the keys to the success of our business in the event we close the acquisition
with Analyst Financials will be our ability to retain Analyst Financial's
executives and employees, and attract additional skilled employees. If we are
unable to keep our current technical employees, we may be unable to adequately
service current projects or bid for new projects. If we are unable to recruit
additional technical employees, we may not be able to expand or grow our
business. We compete for the services of information technology professionals
with other consulting firms, software vendors and consumers of information
technology services, many of which have greater financial resources than we
have. We may not be successful in hiring and retaining a sufficient number of
information technology professionals to staff our consulting projects. To
attract qualified technical employees, we may need to substantially increase the
compensation, bonuses, stock options or other benefits we offer to employees.
These additional costs may negatively affect our business and operating results.
THE FUTURE SUCCESS OF OUR BUSINESS IS HEAVILY DEPENDENT ON THE
CONTINUED SERVICES OF CERTAIN KEY EMPLOYEES.
Our future success depends to a significant extent on the skills,
experience and efforts of our senior management. In particular, we depend on
Charles Osenbaugh, our Chief Executive Officer and Chief Financial Officer. Mr.
Osenbaugh is not subject to an employment agreement and we have not obtained key
person life insurance or disability insurance policies on him. If Mr. Osenbaugh
ends his employment with us, or becomes incapacitated and unable to perform his
duties, then our business and financial condition could be seriously harmed.
We also depend on the services of qualified and experienced
information technology professionals, creative personnel, and sales and
marketing personnel. We typically do not enter into employment agreements with
these individuals. Any of these employees could leave their employment with us,
and could offer their services to our competitors. Our business and financial
condition could be negatively impacted if any of these events occur.
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<PAGE> 14
THE MARKET FOR OUR SHARES IS LIMITED.
Our common stock is currently listed for trading on the OTC
Bulletin Board, and as a result, an investor may find it more difficult to
dispose of, or to obtain accurate quotations as to the price of, our securities
than if the securities were traded on the Nasdaq Stock Market or another
national exchange. In addition, our common stock is also listed for trading on
the Boston Stock Exchange. If we were to experience significant or prolonged
losses or otherwise, it may be unable to maintain the standards for continued
listing on the Boston Stock Exchange. As a result, an investor would find it
more difficult to dispose of, or to obtain accurate quotations for, our
securities.
Our securities are subject to certain rules and regulations
relating to "penny stock" (generally defined as any equity security that is not
quoted on the Nasdaq Stock Market and that has a price less than $5.00 per
share, subject to certain exemptions). Broker-dealers who sell penny stocks are
subject to certain "sales practice requirements" for sales in certain nonexempt
transactions (i.e., sales to persons other than established customers and
institutional "accredited investors"), including requiring delivery of a risk
disclosure document relating to the penny stock market and monthly statements
disclosing recent price information for the penny stock held in the account, and
certain other restrictions. For as long as our securities are subject to the
rules on penny stocks, the market liquidity for such securities could be
materially and adversely affected.
OUR STOCK PRICE IS VOLATILE.
The trading price of our common stock has fluctuated
significantly in the past. The future trading price of our common stock may
continue experiencing wide price fluctuations in response to such factors as:
- actual or anticipated fluctuations in revenues or
operating results;
- changing information technology spending habits of our
clients and prospective clients;
- failure to meet expectations of performance;
- announcements of technological innovations or new
products by our competitors;
- developments in or disputes regarding copyrights,
trademarks, patents and other proprietary rights;
- product and services pricing, discounts and margins; and
- general economic conditions.
WE DO NOT INTEND TO PAY DIVIDENDS.
We have not declared dividends on our common stock in the past,
and do not intend to declare dividends on our common stock in the foreseeable
future.*
THERE ARE A NUMBER OF STATE LAW PROVISIONS THAT COULD DELAY OR
PREVENT AN ACQUISITION OF OUR COMPANY.
We are subject to the provisions of Chapter 23B.19 of the
Washington Business Corporation Act, which prohibit a corporation registered
under the Securities Exchange Act of 1934, as amended, from engaging in certain
significant transactions with a 10% shareholder. Significant transactions
include, among others, a merger with or disposition of assets to the 10%
shareholder. These provisions have the effect of making it more difficult for a
third party to acquire a majority of our outstanding voting stock, or delaying
such an acquisition, even if the takeover by a third party would be beneficial.
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<PAGE> 15
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of
common stock offered by the selling shareholder. We will pay any expenses
incurred in connection with the registration of all shares of common stock
offered by this prospectus. See "Plan of Distribution."
SELLING SHAREHOLDER
The following table sets forth the aggregate number of shares of
common stock held by the selling shareholder as of March 31, 2000 and the number
of shares being offered for sale.
<TABLE>
<CAPTION>
NO. OF SHARES NO. OF SHARES PERCENTAGE
OWNED NO. OF SHARES OWNED OWNED
NAME BEFORE OFFERING OFFERED FOR SALE AFTER OFFERING AFTER OFFERING
<S> <C> <C> <C> <C>
Infinium Software, Inc. (1) 300,000 300,000 0 *
TOTAL: 300,000 300,000
</TABLE>
* less than one percent
(1) The 300,000 shares of common stock being offered for the account of Infinium
Software, Inc. were issued to Infinium in February 2000, upon exercise by
Infinium of stock purchase warrants to purchase 300,000 shares of common stock.
In March 1998, in connection with a software development agreement between
Timeline and Infinium, Infinium purchased, at a purchase price of $100,000,
non-tradable warrants to acquire up to 300,000 shares of common stock at an
exercise price of $1.00 per share. This per share exercise price represented the
fair market value of the common stock at the time of the original agreement. The
warrants were sold to Infinium in conjunction with an agreement that called for
us to develop integrated financial reporting and budgeting applications for
Infinium. Infinium has not had a position, office or other material relationship
with Timeline within the past three years.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold
from time to time by the selling shareholder. The selling shareholder will act
independently of us in making decisions with respect to the timing, manner and
size of each sale. The selling shareholder may sell the shares being offered
hereby on the OTC Bulletin Board, or otherwise, at prices and under terms then
prevailing or at prices related to the then current market price or at
negotiated prices. Shares may be sold by one or more of the following means of
distribution:
- block trades in which the broker-dealer so engaged will
attempt to sell such shares as agent, but may position
and resell a portion of the block as principal to
facilitate the transaction;
- purchases by a broker-dealer as principal and resale by
such broker-dealer for its own account pursuant to this
prospectus;
- over-the-counter distributions in accordance with the
rules of the NASD;
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and
- privately negotiated transactions.
We will not receive any of the proceeds from the sale of shares
by the selling shareholder, but we will be responsible for expenses incurred in
connection with the registration of the shares. The selling shareholder will be
responsible for all selling commissions, underwriting fees and stock transfer
taxes applicable to the sale of shares pursuant to this prospectus.
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<PAGE> 16
To the extent required, this prospectus may be amended and
supplemented from time to time to describe a specific plan of distribution. In
connection with distributions of such shares or otherwise, the selling
shareholder may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of our common stock in
the course of hedging the positions they assume with the selling shareholder.
The selling shareholder may also sell our common stock short and redeliver the
shares to close out such short positions. The selling shareholder may also enter
into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial
institution of the shares offered hereby, which shares such broker-dealer or
other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction). The selling shareholder
may also pledge such shares to a broker-dealer or other financial institution,
and, upon a default, such broker-dealer or other financial institution, may
affect sales of such pledged shares pursuant to this prospectus (as supplemented
or amended to reflect such transaction). In addition, any such shares that
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this prospectus.
In effecting sales, brokers, dealers or agents engaged by the
selling shareholder may arrange for other brokers or dealers to participate.
Brokers, dealers or agents may receive commissions, discounts or concessions
from the selling shareholder in amounts to be negotiated prior to the sale. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933 in
connection with such sales, and any such commissions, discounts or concessions
may be deemed to be underwriting discounts or commissions under the Securities
Act of 1933. We will pay all reasonable expenses incident to the registration of
the shares being offered hereby other than any commissions and discounts of
underwriters, dealers or agents.
In order to comply with the securities laws of certain states, if
applicable, the shares being offered hereby must be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states such shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and there has been compliance thereof.
We have advised the selling shareholder that the
anti-manipulation rules of Regulation M under the Securities Exchange Act of
1934 may apply to sales of shares in the market and to the activities of the
selling shareholder and their affiliates. In addition, we will make copies of
this prospectus available to the selling shareholder and have informed it of the
need for delivery of copies of this prospectus to purchasers at or prior to the
time of any sale of the shares offered hereby. The selling shareholder may
indemnify any broker-dealer that participates in transactions involving the sale
of the shares against certain liabilities, including liabilities arising under
the Securities Act of 1933.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
We have agreed to indemnify the selling shareholder, and any
person controlling it against certain liabilities, including liabilities under
the Securities Act of 1933. The selling shareholder has agreed to indemnify us
and certain related persons against certain liabilities, including liabilities
under the Securities Act of 1933.
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<PAGE> 17
We have agreed with the selling shareholder to keep the
registration statement of which this prospectus constitutes a part effective
until the earlier of the sale of all the shares or 120 days after the effective
date of the registration statement.
LEGAL MATTERS
Certain legal matters with respect to the validity of the shares
of common stock offered hereby are being passed upon for us by Cairncross &
Hempelmann, P.S., Seattle, Washington. Cairncross & Hempelmann has not
represented the selling shareholder in connection with such registration.
EXPERTS
The financial statements of the Company incorporated by reference
from the Company's Annual Report on Form 10-KSB for the year ended March 31,
2000 have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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<PAGE> 18
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY
SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN
OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATES AS TO WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
Where You Can Find More Information......................................... 3
Special Note Regarding Forward-Looking Statements........................... 3
Our Company................................................................. 4
Risk Factors................................................................ 7
Use of Proceeds............................................................. 15
Selling Shareholder......................................................... 15
Plan of Distribution........................................................ 15
Legal Matters............................................................... 17
Experts..................................................................... 17
</TABLE>
300,000 SHARES
TIMELINE, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
June 30, 2000
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<PAGE> 19
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of the estimated cost and
expenses payable by the Registrant in connection with the sale of the common
stock offered hereby:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee..................................... $233
Printing and engraving expenses................................................... 5,000
Accounting fees and expenses...................................................... 2,000
Legal fees and expenses........................................................... 5,000
Miscellaneous expenses............................................................ 1,000
-----
Total...................................................................... $13,233
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 23B.08.320 of the Washington Business Corporation Act
(the "WBCA") authorizes a corporation to limit a director's liability to the
corporation or its shareholders for monetary damages for acts or omissions as a
director, except in certain circumstances involving intentional misconduct, self
dealing or illegal corporate loans or distributions, or any transaction from
which the director personally receives a benefit in money, property or services
to which the director is not legally entitled. The Registrant's Articles of
Incorporation, as amended (the "Articles"), contains provisions implementing, to
the fullest extent permitted by Washington law, such limitations on a director's
liability to Registrant and its shareholders. Any amendment or repeal of such
provisions may not adversely affect any right or protection of a director of
Registrant for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
Sections 23B.08.500 through 23B.08.600 of the WBCA authorize a
court to award, or a corporation's board of directors to grant, indemnification
to directors and officers on terms sufficiently broad to permit indemnification
under certain circumstances for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"). Under the WBCA, a corporation has the
power to indemnify a director or officer made a party to a proceeding, or
advance or reimburse expenses incurred in a proceeding, under any circumstances,
except that no such indemnification shall be allowed on account of: (i) acts or
omissions of a director or officer finally adjudged to be intentional misconduct
or a knowing violation of the law; (ii) conduct of a director or officer finally
adjudged to be an unlawful distribution; or (iii) any transaction with respect
to which it was finally adjudged that such director or officer personally
received a benefit in money, property or services to which the director or
officer was not legally entitled. Article 9 of Registrant's Articles provides
for indemnification of Registrant's directors and officers, including those who
serve at the request of Registrant as trustees with respect to employee benefit
plans, to the maximum extent permitted by Washington law.
Directors and officers of Registrant are covered by insurance
(with certain exceptions and limitations) which indemnifies them against losses
and liabilities arising from certain alleged "wrongful acts," including alleged
errors or misstatements or misleading statements, or certain other alleged
wrongful acts or omissions constituting neglect or breach of duty.
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<PAGE> 20
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------------------------- -----------------------------------------------------------------------------------
<S> <C>
5.1 Opinion of Cairncross & Hempelmann, P.S.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Cairncross & Hempelmann, P.S. (included in opinion filed as Exhibit 5.1)
24.1 Powers of Attorney (see Signature Page)
27.1 Financial Data Schedule
</TABLE>
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes to file with the SEC, during any
period in which it offers or sells securities in reliance upon Rule 415 of the
Securities Act, a post-effective amendment to this Registration Statement. Such
post-effective amendment shall: (1) include any prospectus required under
Section 10(a)(3) of the Securities Act; (2) reflect in such prospectus any facts
or events that exist which, individually or together, represent a fundamental
change in the information contained in the registration statement; provided,
however, that notwithstanding the foregoing, any increase or decrease in volume
of the securities offered (if the total dollar value of the securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and (3) include any additional or
changed material information on the plan of distribution. In addition,
Registrant hereby undertakes to file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
For determining any liability under the Securities Act, the
Registrant hereby undertakes: (1) to treat the information omitted from the form
of prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of this
Registration Statement as of the time the SEC declared it effective; and (2) to
treat each post-effective amendment that contains a form of prospectus as a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time as the initial bona fide offering of
the securities.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC 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 Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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<PAGE> 21
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Seattle, State of Washington, on June 29, 2000.
TIMELINE, INC.
/s/ Charles Osenbaugh
------------------------------------------
Charles Osenbaugh, Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Charles Osenbaugh as his attorney-in-fact, with full power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement, and to file the same, with exhibits thereto and other
documents in connection therewith, with the SEC, hereby ratifying and confirming
all that said attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following persons in
the capacities indicated on June 29, 2000.
/s/ Charles Osenbaugh
-------------------------------------------
Charles Osenbaugh
President,Chief Executive Officer,
Chief Financial Officer and Director
(principal executive officer,
principal financial and accounting officer)
/s/ Frederick W. Dean
-------------------------------------------
Frederick W. Dean
Director, Executive Vice President of
Operations
/s/ Donald K. Babcock
-------------------------------------------
Donald K. Babcock
Director
/s/ Kent L. Johnson
-------------------------------------------
Kent L. Johnson
Director
