As filed with the Securities and Exchange Commission on January 28, 1997
Registration Statement No.333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EXPERT SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
Delaware
65-0359860
(State of
Incorporation)
(IRS Employer Identification Number)
800 Douglas Road, Suite 750
Coral Gables, Florida 33134
(305) 567-9990
(Address including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------------------------
Kenneth P. Currier
Chief Executive Officer
Expert Software, Inc.
800 Douglas Road, Suite 750
Coral Gables, Florida 33134
(305) 567-9990
(Name, address, including zip code, and telephone number,
including area code of agent for service)
-------------------------------
With copies to:
John B. Steele, Esq.
Goodwin, Proctor & Hoar, L.L.P.
Exchange Place
53 State Street
Boston, Massachusetts 02109-2881
(617) 570-1000
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_| If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering |_|
If this Form is a post-effective amendment filed pursuant to Rule 452(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering |_|
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. |_|
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Page 1 of 21 pages.
Exhibit Index is at page 19.
<PAGE>
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Shares to be Maximum Maximum Registration
be registered registered Offering Aggregate Fee (2)
Price Per Offering
Share (1) Price (1)
- ----------------------------------------------------------------------
Common Stock 315,409 $4.187 $1,320,617.50 $455.38
Shares
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of l933 as amended.
(2) Pursuant to Rule 457(c) under the Securities Act of 1933, the registration
fee has been calculated based upon the average of the bid and ask prices per
share of Common Stock on the NASDAQ National Market System on January 14, 1997.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay the effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of l933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- -------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 28, 1997
PROSPECTUS
315,409 Shares
EXPERT SOFTWARE, INC.
Common Stock
-------------
This prospectus relates to the offer and sale of 315,409 shares of common
stock, $.01 par value per share ("Common Stock") of Expert Software, Inc.
("Expert" or the "Company") by certain stockholders of the Company named herein
(the "Selling Stockholders"). See "Selling Stockholders" and "Plan of
Distribution."
The Common Stock is quoted on The Nasdaq National Market System under the
trading symbol "XPRT".
------------------
See "Risk Factors" beginning on Page 4 for certain risk factors
relevant to an
investment in the Common Stock
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------
The 315,409 shares of Common Stock offered hereby (the "Shares") may be sold
from time to time by the Selling Shareholders on The Nasdaq National Market
System on terms to be determined at the times of such sales. The Selling
Stockholders may also make private sales directly or through a broker or
brokers. Alternatively, the Selling Stockholders may from time to time offer
Shares offered hereby to or through underwriters, dealers or agents who may
receive consideration in the form of discounts and commissions. Such
compensation, which may be in excess of ordinary brokerage commissions, may be
paid by the Selling Stockholders and/or the purchasers of the Shares offered
hereby for whom such underwriters, dealers or agents may act. The Company is
registering the Shares to satisfy the Company's contractual obligations to the
Selling Stockholders to use best efforts to register such Shares, but the
registration of the Shares does not necessarily mean that any of the Shares will
be offered or sold hereunder. See "Selling Stockholders" and "Plan of
Distribution."
The Selling Stockholders and any dealers or agents that participate in the
distribution of the Securities offered hereby may be deemed to be "underwriters"
as defined in the Securities Act of 1933, as amended (the "Securities Act") and
any profit in the sale of such Shares offered hereby by them and any discounts,
commissions or concessions received by any such dealers or agents might be
deemed to be underwriting discounts and commissions under the Securities Act.
The Company will receive no proceeds from the sale of the Shares by Selling
Stockholders hereunder, but the Company will pay the expenses incurred by the
Company in connection with the registration of the Shares with the Securities
and Exchange Commission. See "Plan of Distribution" for indemnification
arrangements between the Company and the Selling Stockholders.
-------------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE SALE OF ANY SHARES
PURSUANT TO THIS PROSPECTUS TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR
MADE, ANY SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED ON AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE PURSUANT TO THIS
PROSPECTUS SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE COMPANY'S AFFAIRS SINCE THE DATE OF THIS PROSPECTUS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES COVERED BY THIS PROSPECTUS,
NOR DOES IT CONSTITUTE AN OFFER OR SOLICITATION OF ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER OR SOLICITATION MAY NOT BE LAWFULLY MADE.
-------------------
The date of this Prospectus is January 28, 1997
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the "SEC"
or "Commission") a Registration Statement on Form S-3 under the Securities Act
with respect to the Shares. This Prospectus, which constitutes part of the
Registration Statement, omits certain of the information contained in the
Registration Statement and the exhibits thereto on file with the Commission
pursuant to the Securities Act and the rules and regulations of the Commission
thereunder. The Registration Statement, including exhibits thereto, may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York, 10048, and Citicorp Center, 500 W. Madison Street, Suite 1400 Chicago,
Illinois 60661-2511, and copies may be obtained at the prescribed rates from the
Public Reference Section of the Commission at its principal office in
Washington, D.C. Statements contained in this Prospectus as to the contents of
any contract or other document referred to are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the locations described above. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W. Room, 1024, Washington, D.C. at prescribed rates. In
addition, the Company is required to file electronic versions of these documents
with the Commission through the Commission's Electronic Data Gathering, Analysis
and Retrieval (EDGAR) system. The Commission maintains a World Wide Web site at
http//www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
The Company's Common Stock is quoted on the Nasdaq National Market under the
symbol "XPRT". Reports, proxy statements and other information about the Company
may also be inspected at the offices of the National Association of Securities
Dealers, Inc. at 1735 K Street, Washington, D.C. 20006
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this
Prospectus:(i) Annual Report on Form 10-K for the fiscal year ended December 31,
1995, (ii) Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
l996,(iii) Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1996, (iv) Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 1996, (v) Form 8-K dated October 23, l996, and (vi) the description of the
Common Stock contained in the Company's Form 8-A filed with the Commission
pursuant to the Exchange Act, including all amendments and reports updating such
description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document that is incorporated by reference herein modifies or
supersedes such earlier statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide, without charge, to each person, including a
beneficial owner to whom a copy of the Prospectus is delivered, at the written
or oral request of such person, a copy of any or all of the documents
incorporated herein by reference(other than exhibits thereto, unless such
exhibits are specifically incorporated by reference into such documents).
Written requests for such copies should be directed to Chief Financial Officer,
Expert Software, Inc., 800 Douglas Road, Suite 750, Coral Gables, Florida 33134
(Telephone: 305-567-9990).
This Prospectus contains 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. The Company's actual results may differ materially from
the results discussed on the forward-looking statements. Factors that might
cause such a difference include, but are not limited to, those discussed below.
RISK FACTORS
An investment in the Company involves various risks. In addition to other
matters referenced in the Company's documents which are filed with the
Commission and which are incorporated by reference herein, prospective
stockholders should consider the following risk factors:
Liquidity and Capital Resources. Since December 31, 1995, the Company has
experienced a reduction in its stockholders' equity, working capital and ratio
of current assets to current liabilities, primarily as a result of net losses
realized during that period. Management has responded by reducing expenses,
including among other actions, reducing personnel significantly.
As of September 30, 1996, the Company had $3.8 million in working capital,
including $1.9 million in cash. Net cash used by operating activities was $4.5
million for the nine months ended September 30, 1996, primarily due to the
payment of approximately $2.7 million for income taxes related to 1995 and 1996,
and increased investment in accounts receivable. Increases in gross accounts
receivable were offset by increases in provisions for returns and doubtful
accounts. Net cash provided by investing activities was $5.5 million, primarily
due to the maturity and sales of certain marketable securities, offset by
purchases of property and equipment.
The Company believes that cash generated by operations may be affected by an
increase in working capital requirements as it continues to expand operations.
In response to such growth in working capital requirements, the Company entered
into a two year, $5.0 million unsecured revolving line of credit in May, 1996.
Availability under the line is based on an advance rate applied to eligible
receivables and the maintenance of certain financial ratios. As a result of the
Company's performance in the second and third quarters of fiscal 1996, the
Company was no longer in compliance with the original financial ratios under its
revolving line of credit. Amendments to the line of credit were entered into,
modifying the financial ratios to reflect its year to date results of operations
and granting a security interest in the Company's assets. There can be no
assurance that the Company's results of operations will continue to be in
compliance with the line of credit covenants, which among other things, prohibit
two consecutive quarterly losses commencing with the third quarter of 1996, or
that the line of credit will be otherwise available to the Company.
Competition. The Company competes with many companies, including large
software publishing companies. Many of these companies have substantially
greater financial and other resources, larger development staffs, and more
extensive manufacturing and marketing organizations than those of the Company.
The Company has experienced consolidation of the software industry among both
customers and competitors, evolving distribution channels, the growth in
popularity of the Internet and other new technologies among competitors which
could impact the distribution and purchase of software.
Dependence Upon Key Personnel. The Company is highly dependent on the
members of its management and development staff, the loss of one or more of
which could have a material adverse effect on the Company. In addition, the
Company believes that its future success will depend in large part upon its
ability to attract and retain highly skilled, technical, managerial, and
marketing personnel. The Company faces significant competition for such
personnel from other companies, research and academic institutions, government
entities and other organizations. There can be no assurance that the Company
will be successful in hiring or retaining the personnel it requires. The failure
to hire and retain such personnel could materially and adversely affect the
Company's prospects.
Potential Volatility of Stock Price. The market price of shares of the
Company's Common Stock has been, and in the future will likely be, highly
volatile. Factors such as announcements of new commercial products or
technological innovations by the Company or its competitors, results of
operations of the Company, its primary competitors or significant customers, and
general market conditions may have a significant effect on the market price of
the Company's Common Stock.
Changes in Technology and Industry Standards. The consumer software industry
is undergoing rapid changes, including evolving industry standards, frequent new
product introductions and changes in consumer requirements and preferences. The
introduction of new technologies, including operating systems and media formats,
can render the Company's existing products obsolete or unmarketable. In 1993,
for example, there was a significant shift in consumer demand from DOS-based
software to Windows-based software. More recently, consumer demand has been
shifting from disk-based software to software on CD-ROM's. There can be no
assurance that the current demand for the Company's Windows and CD-ROM products
will continue or that the mix of the Company's future product offerings will
keep pace with technological changes or satisfy evolving consumer preferences.
The success of the Company will be dependent upon its ability to develop,
introduce and market products which respond to such changes in a timely fashion.
There can be no assurances that the Company will be successful in developing and
marketing products for certain advanced and emerging operating systems and
formats. Failure to develop and introduce new products and product enhancements
in a timely fashion could result in significant product returns and inventory
obsolescence and could impair the Company's business operating results and
financial condition.
Dependence on Retailers and Distributors. The Company sells its products
primarily on a direct basis to retailers as well as to distributors for resale
to retailers. The Company's retail customers include office supply stores,
software specialty stores, warehouse clubs, consumer electronic stores,
mall-based chains and mass merchants. The Company's customers are not
contractually required to make future purchases of the Company's products and
therefore could discontinue carrying the Company's products in favor of a
competitor's product or for any other reason. Retailers and distributors compete
in a volatile industry that is subject to rapid change, consolidation, financial
difficulty and increasing competition from new distribution channels. Due to
increased competition for limited shelf space, retailers and distributors are
increasingly in a better position to negotiate favorable terms of sale,
including price discounts and product return policies. Retailers often require
software publishers to pay fees in exchange for preferred shelf space. Retailers
may give higher priority to products other than the Company's thus reducing
their efforts to sell the Company's products. There can be no assurance that the
Company will be able to increase or sustain its current amount of retail shelf
space or promotional .resources, and as a result, the Company's operating
results could be adversely affected. In addition, other types of retail outlets
and methods of product distribution may become important in the future, such as
on-line services. It is critical to the success of the Company that as those
changes occur the Company gains access to those channels of distribution.
Customer Concentration and Credit Risk. In the first nine months of 1996,
the Company's two largest customers each accounted for more than 10% of gross
sales less actual returns ("Sales") and in the aggregate accounted for
approximately 26% of the Company's outstanding gross accounts receivable at
September 30, 1996. In 1995, the Company's three largest customers each
accounted for more than 10% of Sales and in the aggregate accounted for
approximately 36% of the Company's gross outstanding accounts receivable at
December 30, 1995.
The loss of any of the Company's major customers, a significant decrease in
product shipments to any one or more of them or an inability to collect
receivables from one or more of them could adversely affect the Company's
business, operating results and financial condition.
Product Returns; Collection of Accounts Receivable. Consistent with industry
practices, the Company may accept product returns or provide other credits in
the event that a retailer or distributor holds excess inventory of the Company's
products. The Company's sales are made on credit terms and it does not generally
hold collateral to secure payment. Therefore, a default in payment on a
significant scale could adversely affect the Company's business, results of
operations and financial condition. It is difficult for the Company to ascertain
current demand for its existing products and anticipated demand for newly
introduced products. Accordingly, the Company is exposed to the risk of product
returns from retailers and distributors. There can be no assurance that actual
returns and uncollectible accounts receivables will not exceed the Company's
reserves. Any significant increase in product returns or uncollected accounts
receivable beyond the reserves provided could have a material adverse effect on
the Company's business, results of operations and financial condition.
Dependence on External Development Resources. The Company relies on external
development resources for the development of a significant number of the
software products it publishes. Due primarily to the increased demand for
consumer software programs, the payment of advance and guaranteed royalties to
independent developers has increased in the industry and may continue to
increase. As independent developers are in high demand, there can be no
assurance that independent developers, including those which have developed
products for the Company in the past, will be available to develop products for
the Company in the future. Many independent developers have limited financial
resources, which could expose the Company to the risk that such developers may
be out of business prior to completing a project. In addition, due to the fact
that the Company has less control over the scheduling and quality of the work of
independent developers than it does over its own employees, there can be no
assurance that such developers will complete products for the Company on a
timely basis, within acceptable guidelines, or at all. Furthermore, under the
Company's typical agreements with its independent software developers, the
Company's licenses to publish and market their software programs have initial
five year terms, which automatically renew annually until canceled by either
party. The Company's success depends in part on its continued ability to obtain
and renew product development agreements with independent software developers.
The Company's success is also dependent on its ability to obtain content for its
products from external sources. There can be no assurance that the Company will
be able to obtain or renew product development agreements or to obtain such
content on favorable terms, or at all.
Management of Growth. The Company's ability to manage its growth effectively
will require it to continue to improve its operational, financial and management
information systems, and to attract, train, motivate, manage and retain key
employees. The Company has implemented a new management
information system and may make additional investments in capital equipment to
address increasing sales volume. No assurance can be given that these new
systems will be fully implemented successfully and the failure to do so could
have a material adverse effect on the Company's business, operating results, and
financial condition. If the Company's management becomes unable to manage growth
effectively, the Company's business operating results and financial condition
could be adversely affected.
Limited Protection of Intellectual Property and Proprietary Rights. The
Company regards its software as proprietary and relies primarily on a
combination of trademark, copyright and trade secret laws, employee and third
party nondisclosure agreements and other methods to protect its proprietary
rights. The Company does not include in its products any mechanism to prevent or
inhibit unauthorized copying. Unauthorized copying occurs within the software
industry, and if a significant amount of unauthorized copying of the Company's
products were to occur, the Company's business, operating results and financial
condition could be adversely affected. Also, as the number of software products
in the industry increases and the functionality of these products further
overlaps, software developers and publishers may increasingly become subject to
infringement claims. There can be no assurance that third parties will not
assert infringement claims against the Company in the future with respect to
current and future products. Although the Company has not been the subject of
any actual pending or threatened intellectual property litigation, there has
been substantial litigation among software companies regarding copyright,
trademark, or other intellectual property rights. Any such claims or litigation,
with or without merit, could be costly and a diversion of management's attention
which could have a material adverse effect on the Company's business, operating
results and financial condition. Adverse determinations in such claims or
litigation could have a material adverse effect on the Company's business,
operating results and financial condition.
Anti-takeover Provisions. The Company's Board of Directors has the authority
to issue shares of Preferred Stock and to determine the price, rights,
preferences, privileges and restrictions of those shares without any further
vote or action by the stockholders. The rights of the holders of Common Stock
will be subject to, and may be adversely affected by, the rights of the holders
of any Preferred Stock that may be issued in the future. The issuance of
Preferred Stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company. The Company has no present plans to
issue shares of Preferred Stock except as provided by the Company's Shareholder
Rights Agreement. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law. In general,
this statute prohibits a publicly-held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the "business combination" is approved in a prescribed
manner. For purposes of Section 203, a "business combination" includes a merger,
asset sale or other transaction resulting in a financial benefit to the
"interested stockholder" and an interested stockholder is a person who, together
with affiliates and associates, owns (or within three years prior, did own) 15%
or more of the corporation's voting stock. Although Section 203 applies
generally to the Company and its stockholders, it does not apply to any of the
Company's stockholders who owned, together with any affiliates and associates,
15% or more of the Common Stock immediately after the Company's initial public
offering. Furthermore, certain other provisions of the Company's Certificate of
Incorporation and By-laws may have the effect of discouraging, delaying or
preventing a merger, tender offer, or proxy contest, which could adversely
affect the market price of the Company's Common Stock. Such provisions include,
among other things, a classified Board of Directors serving staggered three-year
terms, the removal of directors only for cause, exclusive authority to determine
the size of the entire Board of Directors and subject to certain limited
exceptions, to fill vacancies thereon, exclusive authority of the Board of
Directors (except as otherwise required by law) to call special meetings of
stockholders, elimination of stockholder action by written consent and certain
advance notice requirements for stockholders proposals and nominations for
election to the Board of Directors.
The Company has adopted a Shareholder Rights Agreement. The purpose of the
Shareholders Rights Agreement is, among other things, to ensure that
stockholders receive fair and equal treatment in the event of any proposed
acquisition of the Company. The adoption of the Shareholder Rights Agreement
could make it more difficult for a third party to acquire, or could discourage a
third party from acquiring, the Company or a large block of the Company's Common
Stock.
Potential Impact of Shares Eligible for Future Sale. There are currently
approximately 7,507,804 shares of Common Stock outstanding, of which 315,409
shares of Common Stock are being registered hereby. The holders of approximately
2,269,690 shares of Common Stock have contractual rights to have those shares
registered with the Securities and Exchange Commission for resale to the public.
In addition, the Company has filed a registration statement covering the shares
of Common Stock reserved for issuance under the Company's 1992 Stock Option Plan
and, accordingly, such shares issued under the 1992 Stock Option Plan will be
eligible for sale in the public market, subject , with respect to affiliates of
the Company, to compliance with applicable Rule 144 limitations. Sales of
substantial amounts of these shares of Common Stock in the public market could
have an adverse effect on the market price of the Common Stock.
THE COMPANY
Expert Software, Inc. is a Delaware corporation with its
principal executive offices at 800 Douglas Road, Executive Tower,
Suite 750, Coral Gables, Florida 33134. Its telephone number is
(305) 567-9990.
"Expert Software", "Swfte", and all of Expert's logos and product names are
trademarks of the Company. This prospectus also contains trademarks of companies
other than those of the Company. The Company's executive offices are located at
800 Douglas Road, Executive Tower, Suite 750, Coral Gables, Florida 33134-3160,
and its telephone number is (305) 567-9990.
RECENT DEVELOPMENTS
On October 21, 1996, the Company reported that it had settled litigation
with David H. Goodman, the former Chairman and Chief Executive Officer of Swfte
International, Ltd., and others. The original dispute involved the contingent
purchase price pursuant to a certain Agreement and Plan of Merger among Expert,
ES I Acquisition Corp., Swfte and the stockholders of Swfte, dated as of October
16, 1995. The suit, as well as counterclaims filed by the Company were settled
in the Court of Chancery, New Castle County, Delaware. The Company's results for
the third quarter ended September 30, 1996 included expenses of $1.9 million for
the settlement and related legal and associated costs.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares by the
Selling Stockholders.
<PAGE>
SELLING STOCKHOLDERS
The following table provides the names of and the number of shares offered
for sale by each Selling Stockholder in the Offering. The Selling Stockholders
acquired their shares as part of the Swfte acquisition by the Company. Since the
Selling Stockholders may sell all, some, or none of their Shares, no estimate
can be made of the number or percentage of Shares that each Selling Stockholder
will own upon completion of the Offering. Assuming that all of the Shares
offered hereby are sold, no Selling Stockholder would own more than 1 % of the
outstanding shares of the Company's Common Stock after the Offering .
The Shares offered by the Prospectus may be offered from time to time during the
90 day effective period of the registration statement by the Selling
Stockholders named below.
SHARES OWNED SHARES OFFERED
NAME AS OF HEREBY
DECEMBER 26,
1996
-------------- -------------------------------------
Diane Bove 11,664 11,664
Irwin Bransky 62,027 62,027
Musa Brooker 97 97
Shawn Dewey 38 38
John Giannone 388 388
Zandra Gomez 38 38
David Goodman 225,686 225,626
Katie 38 38
Houghton
Pamela 2,916 2,916
Jasinski
Alex Kane 38 38
Daniel 1,944 1,944
Kearney
Maurice 38 38
Kimball
Loretta 291 291
Liskey
Brian Lofurno 388 388
Karen 388 388
Margolis
Darren 38 38
Mathewson
Kenneth May 194 194
Marilyn Minko 38 38
Joseph 777 777
Spector
Jeffrey Suwyn 97 97
David Thomas 38 38
Scott 291 291
Wasserman
Piper 8,017 8,017
Jaffray, Inc.
=====================================
Totals 315,469 315,409
=====================================
The information provided herein is based solely upon information provided by
each of the Selling Shareholders named above.
In recognition of the fact that Selling Stockholders may desire to sell
their Shares when they consider appropriate, the Company has filed with the
Commission a registration statement on Form S-3 (of which this Prospectus is a
part) with respect to the sale of the Shares by the Selling Stockholders. The
Company will prepare and file such amendments and supplements to the
registration statement as may be necessary to keep it effective for 90 days
after the date of effectiveness.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold during the 90 day period following the
date of this Prospectus. The Selling Stockholders may sell the Shares on The
Nasdaq National Market on terms to be determined at the time of such sale. The
Selling Stockholders may also make private sales directly or through a broker or
brokers. Alternatively, the Selling Stockholders may, during the effective
period of the registration statement, offer Shares offered hereby to or through
underwriters, dealers, or agents who may receive consideration in the form of
discounts and commissions. Such compensation, which may be in excess of ordinary
brokerage commissions, may be paid by the Selling Stockholders and/or the
purchasers of the Shares offered hereby for whom such underwriters, dealers and
agents may act. The Selling Stockholders and any dealers or agents that
participate in the distribution of the Shares offered hereby may be deemed
"underwriters" as defined in the Securities Act and any profit on the sale of
such Shares offered hereby by them and any discounts, commissions or concessions
received by any such dealer or agents might be deemed to be underwriting
discounts and commissions under the Securities Act. The aggregate proceeds to
the Selling Stockholders from sales of the Shares offered hereby will be the
purchase price of such Shares less any broker's commissions required to be paid
by the Selling Stockholders.
To the extent required, the specific Shares of Common Stock to be sold, the
names of the Selling Stockholders, the respective purchase price and public
offering prices, the name of any such agent, dealer or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying Prospectus supplement.
The Shares of Common Stock offered hereby may be sold from time to time in
one or more transactions at a fixed offering price, which may be changed, or at
varying prices determined at the time of sale or at negotiated prices.
In order to comply with the securities laws of certain states, if
applicable, the Shares offered hereby will be sold by the Selling Stockholders
in such jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states 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 requirements is available and is complied
with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares offered hereby may not simultaneously
engage in market making activities with respect to the Shares for a period of
two business days prior to the commencement of such distribution. In addition,
and without limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-2, 10b-6, and 10b-7 which
provisions may limit the timing of purchases and sales of Shares by the Selling
Stockholders.
The Company will pay the expenses incurred by the Company in connection with
the registration with the Commission of the Shares offered hereby.
The Company and each Selling Stockholder have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Goodwin,
Proctor & Hoar L.L.P., Boston, Massachusetts.
EXPERTS
The financial statements and schedule of Expert Software, Inc., as of
December 31, 1995, and for each of the three years in the period ended December
31, 1995 incorporated by reference in the Prospectus, and in the registration
statement have been audited by Arthur Andersen, L.L.P., independent certified
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
auditing and accounting in giving said reports.
<PAGE>
================================ ================================
================================ ================================
No person has been
authorized in connection with
the offering made hereby to
give any information or to 315,409 Shares
make any representation not
contained in this Prospectus, Expert Software, Inc.
and if given or made, such
information or representation Common Stock
must not be relied upon as
having been authorized by the
Company, any Selling
Stockholder or any other
person. This Prospectus does
not constitute an offer to
sell or a solicitation of an
offer to buy any of the
Shares offered hereby to any
person or by anyone in any
jurisdiction in which it is
unlawful to make such 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 date
subsequent to the date hereof.
- --------------------------------
TABLE OF CONTENTS
Available Information........ 3
Incorporation of Certain
Documents by Reference...... 3
Risk Factors................. 4
--------------------------------
The Company, Recent PROSPECTUS
Developments................. 7
--------------------------------
Use of Proceeds.............. 7
Selling Stockholders......... 8
Plan of Distribution......... 8
Legal Matters................ 9
Experts...................... 9
================================ ================================
================================ ================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
Shares being registered are set forth in the following table (all amounts except
the registration fee are estimated):
Registration Fee.................. $ 455.38
Legal Fees and Expenses........... 3,500.00
Miscellaneous..................... 500.00
===========
Total....................... $4,455.38
===========
All expenses referenced above will be borne by the Company.
Item 15. Indemnification of Directors and Officers.
Reference is made to Article VII of the Company's Amended and Restated
Certificate of Incorporation which provides for certain limitations on the
liability of the Company's Directors for monetary damages to the Company and
its stockholders.
Reference is made to Article V of the By-laws of the Company which
provides for indemnification by the Company of its directors and officers under
certain circumstances against expenses (including attorneys' fees, judgments,
fines and amounts paid in settlement) incurred in connection with the defense or
settlement of any threatened, pending or completed legal proceedings in which
any such person is involved by reason of the fact that such person is or was a
director or officer of the Company if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to criminal actions or proceedings,
if such person had no reasonable cause to believe that his or her conduct was
unlawful.
Reference is made to the Company's Amended and Restated Stockholders
Agreement dated as of February 23, 1995 which provides for indemnification by
the Company of its existing principal stockholders and the controlling persons
of such stockholders (some of whom are directors of the Company) against certain
liabilities, including those arising in connection with the registration,
purchase, sale or ownership of any securities of the Company.
The Company carries directors' and officers liability insurance covering
its directors and officers.
Item 16. Exhibits.
Exhibit Description
No.
- -------------------------------------------------------------------
4.1 Amended and Restated Certificate of Incorporation of the
Company (1)
4.2 Amended and Restated By-laws of the Company (2)
4.3 Registration Rights Agreement dated as of November 2,
l995 containing undertaking by the Company to register
certain shares of Common Stock (2)
5.1 Opinion of Goodwin, Proctor & Hoar L.L.P. as to the
legality of the Shares being registered
23.1 Consent of Goodwin, Proctor & Hoar, L.L.P.(included in
Exhibit 5.1 hereto)
23.2 Consent of Accountants Arthur Andersen, L.L.P.
24.1 Powers of Attorney (included on signature page of
Registration Statement as filed)
(1) Incorporated by reference from Exhibit 3.1 to the
Company's Form S-1 (File No. 33-99292) as filed with the
Commission on November 14, 1995.
(2) Incorporated by reference from Exhibit 3.2 to the
Company's Form S-1 (File No. 33-89758) as filed with the
Commission on February 24, 1995.
(3) Incorporated by reference from Exhibit 10.11 to the
Company's Form S-1 (File No. 33-99292) as filed with the
Commission on November 14, 1995.
II-1
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereto) which individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the undersigned
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the Shares offered therein, and the offering
of such Shares at that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the Shares being registered which remain unsold at the
termination of the offering.
(b) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Act of 1934
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the Shares offered therein, and
the offering of such Shares at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the Shares 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 of 1933 and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Expert
Software, Inc. 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 Coral Gables, Florida, on January 17, 1997.
EXPERT SOFTWARE, INC.
BY: /s/ Kenneth P. Currier
------------------------
Kenneth P. Currier
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Expert Software, Inc. hereby severally constitute Kenneth P.
Currier and Charles H. Murphy and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the Registration Statement filed
herewith and any and all amendments to said Registration Statement, and
generally to do all such things in our names and in our capacities as officers
and directors to enable Expert Software, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all requirements of the Securities
and Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by our said attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Director, Chief
/s/ KENNETH P. CURRIER Executive Officer and January 17,
Kenneth P. Currier Secretary (Principal 1997
Executive Officer)
/s/ SUSAN A. CURRIER Director, President January 17,
Susan A. Currier 1997
Chief Financial
/s/ CHARLES H. MURPHY Officer and Treasurer January 17,
Charles H. Murphy (Principal Financial 1997
Officer and Principal
Accounting Officer)
Director January 17,
Stephen J. Clearman 1997
A. Bruce Johnston Director January 17,
1997
Charles E. Noell III Director January 17,
1997
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Expert
Software, Inc. 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 Coral Gables, Florida, on January 17, 1997.
EXPERT SOFTWARE, INC.
BY:
------------------------
Kenneth P. Currier
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Expert Software, Inc. hereby severally constitute Kenneth P.
Currier and Charles H. Murphy and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the Registration Statement filed
herewith and any and all amendments to said Registration Statement, and
generally to do all such things in our names and in our capacities as officers
and directors to enable Expert Software, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all requirements of the Securities
and Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by our said attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Director, Chief
/s/ KENNETH P. CURRIER Executive Officer and January 17,
Kenneth P. Currier Secretary (Principal 1997
Executive Officer)
/s/ SUSAN A. CURRIER Director, President January 17,
Susan A. Currier 1997
Chief Financial
/s/ CHARLES H. MURPHY Officer and Treasurer January 17,
Charles H. Murphy (Principal Financial 1997
Officer and Principal
Accounting Officer)
/s/ STEPHEN J. CLEARMAN Director January 17,
Stephen J. Clearman 1997
Director January 17,
A. Bruce Johnston 1997
Director January 17,
Charles E. Noell III 1997
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Expert
Software, Inc. 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 Coral Gables, Florida, on January 17, 1997.
EXPERT SOFTWARE, INC.
BY:
------------------------
Kenneth P. Currier
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Expert Software, Inc. hereby severally constitute Kenneth P.
Currier and Charles H. Murphy and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the Registration Statement filed
herewith and any and all amendments to said Registration Statement, and
generally to do all such things in our names and in our capacities as officers
and directors to enable Expert Software, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all requirements of the Securities
and Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by our said attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Director, Chief
/s/ KENNETH P. CURRIER Executive Officer and January 17,
Kenneth P. Currier Secretary (Principal 1997
Executive Officer)
/s/ SUSAN A. CURRIER Director, President January 17,
Susan A. Currier 1997
Chief Financial
/s/ CHARLES H. MURPHY Officer and Treasurer January 17,
Charles H. Murphy (Principal Financial 1997
Officer and Principal
Accounting Officer)
Director January 17,
Stephen J. Clearman 1997
/s/ A. BRUCE JOHNSTON Director January 17,
A. Bruce Johnston 1997
Director January 17,
Charles E. Noell III 1997
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Expert
Software, Inc. 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 Coral Gables, Florida, on January 17, 1997.
EXPERT SOFTWARE, INC.
BY:
------------------------
Kenneth P. Currier
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Expert Software, Inc. hereby severally constitute Kenneth P.
Currier and Charles H. Murphy and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the Registration Statement filed
herewith and any and all amendments to said Registration Statement, and
generally to do all such things in our names and in our capacities as officers
and directors to enable Expert Software, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all requirements of the Securities
and Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by our said attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Director, Chief
/s/ KENNETH P. CURRIER Executive Officer and January 17,
Kenneth P. Currier Secretary (Principal 1997
Executive Officer)
/s/ SUSAN A. CURRIER Director, President January 17,
Susan A. Currier 1997
Chief Financial
/s/ CHARLES H. MURPHY Officer and Treasurer January 17,
Charles H. Murphy (Principal Financial 1997
Officer and Principal
Accounting Officer)
Director January 17,
Stephen J. Clearman 1997
Director January 17,
A. Bruce Johnston 1997
/s/ CHARLES E. NOELL III Director January 17,
Charles E. Noell III 1997
II-3
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
No.
- -------------------------------------------------------------------------
4.1 Amended and Restated Certificate of Incorporation of the -
Company (1)
4.2 Amended and Restated By-laws of the Company (2) -
4.3 Registration Rights Agreement dated as of November 2, -
l995 containing undertaking by the Company to register
certain shares of Common Stock (2)
5.1 Opinion of Goodwin, Proctor & Hoar L.L.P. as to the 20
legality of the Shares being registered
23.1 Consent of Goodwin, Proctor & Hoar, L.L.P.(included in 20
Exhibit 5.1 hereto)
23.2 Consent of Accountants Arthur Andersen, L.L.P. 21
24.1 Powers of Attorney (included on signature page of 15
Registration Statement as filed)
(1) Incorporated by reference from Exhibit 3.1 to the
Company's Form S-1 (File No. 33-99292) as filed with the
Commission on November 14, 1995.
(2) Incorporated by reference from Exhibit 3.2 to the
Company's Form S-1 (File No. 33-89758) as filed with the
Commission on February 24, 1995.
(3) Incorporated by reference from Exhibit 10.11 to the
Company's Form S-1 (File No. 33-99292) as filed with the
Commission on November 14, 1995.
II-4
<PAGE>
GOODWIN, PROCTER & HOAR LLP
counselors at law
exchange place
Boston, Massachusetts 02109-2881
telephone (617) 570-1000
January 24, 1997 telecopier (617)
523-1231
Expert Software, Inc.
800 Douglas Road
Executive Tower, Suite 750
Coral Gables, FL 33134
Ladies and Gentlemen:
We have assisted in the preparation and filing with the Securities and
Exchange Commission (the "Commission") of a Registration Statement on Form S-3,
(the "Registration Statement"), relating to the sale by certain stockholders of
up to 315,409 shares of Common Stock, $.01 par value per share (the "Shares"),
of Expert Software, Inc., a Delaware corporation (the "Company").
We have examined the Amended and Restated Certificate of Incorporation and
By-laws of the Company, and have examined and relied upon the originals, or
copies certified to our satisfaction, of such records of meetings of directors
and stockholders of the Company, documents and other instruments as in our
judgment are necessary or appropriate to enable us to render the opinion
expressed below.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and authenticity of all documents submitted to us
a originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, and the authenticity of the originals of
such latter documents.
We assume that the appropriate action will be taken, prior to the offer
and sale of the Shares to register and qualify the Shares for sale under all
applicable state securities or "blue sky" laws.
Based upon the foregoing, we are of the opinion that the issuance of the
Shares was duly authorized, and that such Shares were validly issued and are
fully paid and non-assessable.
We hereby consent to the use of our name in the Registration Statement and
under the caption "Legal Matters" in the related Prospectus, and consent to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
349969.c1 GOODWIN, PROCTER & HOAR LLP
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Form S-3 Registration Statement (No.
33-__________) of our reports dated February 13, 1996, included in Expert
Software, Inc.'s Form 10-K for the year ended December 31, 1995, and to all
references to our Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Miami, Florida,
January 24, 1997.
