<PAGE>
As filed with the Securities and Exchange Commission on October 23, 1997
Registration No. 333-38043
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
ACCENT SOFTWARE INTERNATIONAL LTD.
(Exact name of Registrant as specified in its charter)
Israel 7372 N.A.
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation Industrial Classification Identification No.)
or organization) Code Numbers)
28 Pierre Koenig Street
Jerusalem 91530, Israel
Telephone: 972-2-679-3723
(Address and telephone number of Registrant's principal executive offices)
Todd A. Oseth
Accent Worldwide, Inc.
Suite 340
2864 South Circle Drive
Colorado Springs, CO 80906
(719) 576-2610
(Name, address and telephone number of agent for service of process)
-----------
Copies to:
Herbert H. Davis III, Esq. Barry P. Levenfeld, Esq.
Rothgerber, Appel, Powers & Johnson LLP Yigal Arnon & Co.
1200 Seventeenth Street, Suite 3000 3 Daniel Frisch Street
Denver, CO 80202-5839 Tel Aviv 64731, Israel
Telephone: (303) 623-9000 Telephone: 972-3-692-6868
-----------
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
-----------
<PAGE>
If the only securities being registered on this Form are to be 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, please check the following box. / X /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
-----------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
PROSPECTUS
ACCENT SOFTWARE INTERNATIONAL LTD.
812,000 ORDINARY SHARES
-----------
THIS PROSPECTUS RELATES TO THE PUBLIC OFFERING, WHICH IS NOT BEING
UNDERWRITTEN, OF UP TO 812,000 ORDINARY SHARES, NOMINAL VALUE NIS 0.01 PER SHARE
(THE "SHARES"), OF ACCENT SOFTWARE INTERNATIONAL LTD. ("ACCENT" OR THE
"COMPANY"), WHICH MAY BE OFFERED FROM TIME TO TIME BY CERTAIN SHAREHOLDERS OF
THE COMPANY OR BY AUTHORIZED TRANSFEREES (THE "SELLING SHAREHOLDERS").
THE SHARES ARE ISSUABLE TO THE SELLING SHAREHOLDERS (i) AS COMPENSATION TO
INVESTOR RESOURCE SERVICES, INC., AS COMPENSATION FOR VARIOUS FINANCIAL ADVISORY
SERVICES BEING PROVIDED TO THE COMPANY; AND (ii) UPON EXERCISE OF WARRANTS TO
PURCHASE AN AGGREGATE OF 500,000 ORDINARY SHARES ISSUED TO OTHER PARTIES FOR
SERVICES RENDERED TO THE COMPANY ("WARRANTS"). THE COMPANY WILL RECEIVE NO PART
OF THE PROCEEDS OF SALES OF THE SHARES. HOWEVER, THE COMPANY WILL RECEIVE
PROCEEDS FROM THE EXERCISE OF THE WARRANTS, IF THE WARRANTS ARE EXERCISED. THE
EXERCISE PRICE OF THE WARRANTS IS $1,415,500 IN THE AGGREGATE. THE SHARES HAVE
BEEN RESERVED BY THE COMPANY FOR ISSUANCE AND THE EXERCISE OF THE WARRANTS. THE
SHARES ARE BEING REGISTERED BY THE COMPANY PURSUANT TO VARIOUS AGREEMENTS
BETWEEN IT AND THE SELLING SHAREHOLDERS.
ONCE ISSUED, THE SHARES MAY BE OFFERED BY THE SELLING SHAREHOLDERS FROM
TIME TO TIME IN ONE OR MORE TRANSACTIONS IN THE OPEN MARKET AT PRICES PREVAILING
THEREIN, IN NEGOTIATED TRANSACTIONS AT SUCH PRICES AS MY BE AGREED UPON, OR IN A
COMBINATION OF SUCH METHODS OF SALE. SEE "PLAN OF DISTRIBUTION." THE PRICE AT
WHICH ANY OF THE SHARES MAY BE SOLD, AND THE COMMISSIONS, IF ANY, PAID IN
CONNECTION WITH ANY SUCH SALE, ARE UNKNOWN AND MAY VARY FROM TRANSACTION TO
TRANSACTION. THE COMPANY WILL PAY ALL EXPENSES INCIDENT TO THE REGISTRATION OF
THE SHARES. SEE "SELLING SHAREHOLDERS" AND "PLAN OF DISTRIBUTION."
ON OCTOBER 13, 1997, THE LAST REPORTED SALE OF THE ORDINARY SHARES ON THE
NASDAQ SMALL CAP MARKET WAS $2.50. ORDINARY SHARES ARE TRADED UNDER THE NASDAQ
SYMBOL ACNTF.
-----------
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE PURCHASERS OF THE
SECURITIES OFFERED HEREBY SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 7.
-----------
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 COMPANY HAS RECEIVED FROM THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL AN
EXEMPTION FROM THE OBLIGATION TO PUBLISH THIS PROSPECTUS IN THE MANNER REQUIRED
PURSUANT TO THE PREVAILING LAWS OF THE STATE OF ISRAEL. NOTHING IN SUCH
EXEMPTION SHALL BE CONSTRUED AS AUTHENTICATING THE MATTERS CONTAINED
<PAGE>
IN THIS PROSPECTUS OR AS AN APPROVAL OF THEIR RELIABILITY OR ADEQUACY OR AS
AN EXPRESSION OF OPINION AS TO THE QUALITY OF THE SECURITIES HEREBY OFFERED.
The date of this Prospectus is October 23, 1997
AVAILABLE INFORMATIONAVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements and other information can be inspected and
copied at the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the following regional
offices: Northeast Regional Office, Suite 1300, Seven World Trade Center, 13th
Floor, New York, New York 10048, and Midwest Regional Office, Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and copies of such material may also be obtained from the Public
Reference Section of the Commission at prescribed rates. The Commission
maintains a 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 reports, proxy, information
statements and other information filed by the Company with the Commission are
also filed with The Nasdaq Small Cap Market and can be inspected at its
facility at 1735 K Street, N.W., Washington, D.C. 20006. The Company intends
to furnish its shareholders with annual reports containing audited financial
statements and such other periodic reports as the Company deems appropriate
or as may be required by law.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. This Prospectus, which constitutes a part of such Registration
Statement, does not contain all of the information set forth in, or annexed as
exhibits to, the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulation of the Commission. For further
information with respect to the Company and this offering, reference is made to
the Registration Statement, including the exhibits filed therewith, which may be
inspected without charge at the offices of the Commission at the addresses set
forth above. Copies of the Registration Statement may be obtained from the
Commission at its principal office upon payment of prescribed fees. Statements
contained in this Prospectus as to the contents of any contract or other
documents are not necessarily complete and, where the contract or other document
has been filed as an exhibit to the Registration Statement, each statement is
qualified in all respects by reference to the applicable document filed with the
Commission.
The Company has received from the Securities Authority of the State of
Israel (the "Israel Securities Authority") an exemption from the reporting
obligations as specified in Chapter Six of the Israel Securities Law 5728-1968,
which include the obligation to submit periodic and immediate reports to the
Israel Securities Authority, provided that a copy of each report submitted in
accordance with applicable United States law shall be available for public
review at the Company's principal offices in Israel.
-2-
<PAGE>
FORWARD LOOKING STATEMENTS
Certain non-historical statements contained in this Prospectus are
forward-looking statements, which involve known and unknown risks and
uncertainties. The Company is including this statement for the express
purpose of availing itself of the protections of the safe harbor provided by
the Private Securities Litigation Reform Act of 1995 with respect to all such
forward looking statements. Examples of forward looking statements include,
but are not limited to: (i) projections of capital expenditures, revenues,
growth, prospects, capital structure and other financial matters; (ii)
statements of plans or objectives of the Company; and (iii) statements using
the words "anticipate," "expect," "may," "project," "intend" or similar
expressions.
The Company's ability to predict projected results or the effects of
certain events on the Company's operating results is inherently uncertain.
Therefore, the Company wishes to caution readers of this Prospectus to carefully
consider the matters set forth under the caption "Risk Factors" and certain
other matters discussed herein and in other publicly available information.
Such factors and many other factors beyond the control of the Company's
management could cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements. See "Risk Factors."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCEINCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
0-26394) Pursuant to the Exchange Act are hereby incorporated by reference in
this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,
1996;
(2) The Company's Current Report on Form 8-K dated February 5, 1997;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ending March
31, 1997;
(4) The Company's Proxy Statement for its Annual Meeting of Shareholders held
on May 28, 1997;
(5) The Company's Quarterly Report on Form 10-Q for the quarter ending
June 30, 1997
(i. The Company's Current Report on Form 8-K dated August 20, 1997;
(ii. The Company's Registration Statement on Form S-3 dated August 27, 1997;
(iii. The Company's Amended Registration Statement on Form S-3 dated
September 29, 1997;
(iv. The Company's Proxy Statement for its Extraordinary Meeting of
Shareholders to be held on October 6, 1997; and
(10) The description of the Company's Ordinary Shares contained in its
Registration Statement on Form 8-A, filed with the Commission on July 11,
1995, as amended by the Company's Registration Statement filed on
Form 8-A/A filed on July 14, 1995.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference into this Prospectus, to the extent required, and to
be a part of this Prospectus from the date of filing of such reports and
documents.
Any statement contained in a document incorporated by reference into this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
-3-
<PAGE>
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not, except as so modified or superseded, be deemed
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the foregoing documents incorporated by reference into this Prospectus (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be submitted in writing to Corporate Secretary, Accent Software
International Ltd., POB 53063, 28 Pierre Koenig Street, Jerusalem 91530 Israel,
or by e-mail: [email protected].
Unless the context otherwise requires, all references to Accent or the
Company include its wholly owned United States subsidiary, Accent Worldwide,
Inc. ("Accent Worldwide"), its wholly owned United Kingdom subsidiary, Accent
Software International (Europe) Ltd. ("Accent Europe"), and its majority-owned
subsidiary, AgentSoft Ltd. ("AgentSoft"). ACCENT is a registered trademark of
the Company in the United States, the United Kingdom, Germany and the Benelux
countries. The Company has applied to register AGENTSOFT, GLOBAL DEVELOPMENT KIT
and WEBTAMER as trademarks in the United States and in certain other countries.
Windows is a registered trademark and Windows NT and Windows 95 are
trademarks of Microsoft Corporation ("Microsoft"). All other trademarks
appearing in this Prospectus are the property of their respective holders.
Unless otherwise indicated, all references to Microsoft Windows are to the 3.xx
versions of Windows or Windows 95 and references to Netscape Navigator are to
2.0 and subsequent versions.
-4-
<PAGE>
THE COMPANY
Accent is a language solutions company which designs, develops, markets and
supports multilingual software development tools as well as multilingual
Internet and text processing software products. Accent's products address the
growing need for organizations and individuals to view, create, edit and
exchange information in languages other than English and in multiple languages.
In addition, through the Company's majority-owned subsidiary AgentSoft, it also
develops and markets intelligent agent based software tools and products for
process automation over the Internet. Through 1996 and prior, Accent's products
were marketed in more than 30 countries, primarily through retail and OEM
distribution channels. Beginning in 1997, Accent's market focus has shifted to
one of providing its technology and experience in developing language solutions
and intelligent agent software primarily to OEM and corporate customers.
Accent has used its multilingual software globalization technology as a
platform to launch several multilingual Internet products addressing the needs
of its target users. In December 1995, Accent introduced INTERNET WITH AN
ACCENT, which enables users to browse the Web in a wide variety of languages and
alphabets independent of the local language version of the Windows operating
system and which contains Web authoring tools and e-mail with broad multilingual
capabilities. Accent broadened its Internet product line through the release in
June 1996 of NAVIGATE WITH AN ACCENT, a multilingual browser plug-in for
Netscape Navigator. In the first half of 1997, Accent released the first
versions of WEBTAMER, an integrated group of utilities for the World Wide Web,
which includes AgentSoft's advanced LIVE AGENT intelligent agent technology, and
the ACCENT GLOBAL DEVELOPMENT KIT, a set of standards and tools that enables the
globalization of any Windows software application.
As the Internet continues to grow in terms of the number of users,
geographic diversity and breadth of information, Accent management believes that
demand for software applications in the areas of information access and
management, electronic commerce and workflow management and systems and network
management will increase significantly. Accent management believes that many of
these software applications will be based on intelligent agent technology.
Intelligent agents are electronic assistants that will help automate the
Internet by performing complex, repetitive or time-consuming operations. Accent
established AgentSoft in February 1996 in order to capitalize on the expected
growth of this market and to broaden its Internet product line beyond
multilingual-based software. AgentSoft is dedicated to the development of
intelligent agent-based technology and applications for the Internet and
enterprise Intranet. Through the introduction of WEBTAMER and other innovative
applications of intelligent agent technology, the Company is seeking to
establish itself as a leading participant in the emerging market for Internet
software based on intelligent agent technology.
Accent is seeking to strengthen its position as a leading provider of
multilingual Internet and word processing applications and development tools. To
achieve these objectives, Accent's business strategy is to (i) emphasize
software globalization and intelligent agent technologies; (ii) leverage its
experience in multilingual software development; (iii) add new technologies,
including intelligent agents, to its core technology platforms; and (iv) develop
strategic relationships with leading industry participants.
Accent was organized in 1988 under the laws of the State of Israel. The
Company's principal executive offices are located at 28 Pierre Koenig Street,
Jerusalem 91530, Israel, and its telephone number is 972-2-679-3723.
-5-
<PAGE>
RECENT DEVELOPMENTS
In response to the Company's recent operating results, the Company
implemented a revised business plan designed to decrease operating expenses and
to improve its operating and financial performance while maintaining product
development activities. Specifically, the Company effected a 30% reduction in
the number of its employees. In addition, the Company reduced (i) its
expenditures on marketing and advertising by approximately 50% and (ii) its
other operating expenses by approximately 50% in all areas exclusive of research
and development, which expenses have remained relatively level through the date
of this Prospectus. The Company believes that these reductions and the
maintenance of the research and development expenditures will help enable the
Company to achieve its strategic product development objectives. Roger R.
Cloutier II, who is currently a vice president of Jacobs Investors, Inc. and a
general partner of IMR (a significant shareholder of the Company), was appointed
Co-Chairman of the Board on October 23, 1996. Mr. Cloutier, along with Robert
Rosenschein, Elliott Broidy and Mark Tebbe, constitute the Executive Committee
of the Board of Directors responsible for monitoring the implementation of the
Company's revised business plan. Furthermore, the Company, in the first quarter
of 1997, successfully recruited a new President/Chief Executive Officer and a
Chief Financial Officer, both of whom have extensive industry experience. Based
in Accent's new Colorado Springs office, the new management team has begun to
shift certain sales and management functions to the United States to enable such
personnel to be more effective in targeting customers and end-users of the
Company's products.
On August 5, 1997, the Company completed a financing arrangement with CC
Investments LDC (the "Investor"), pursuant to Regulation D of the Securities Act
of 1933. The Company received $2,000,000 in cash before expenses (approximately
$1,850,000 net of expenses) and, in return, issued the Investor the debenture
carrying six percent (6%) annual interest (payable in cash or Ordinary Shares,
at the Company's option) and convertible into the Company's Ordinary Shares at a
conversion rate equal to the lesser of 135% of the average closing bid price of
the Ordinary Shares for the five trading day period preceding the closing date
or 75% of the average bid price of the Ordinary Shares for the five trading day
period preceding the date of conversion. The debenture automatically converts
into Ordinary Shares on August 5, 1999, two years after the date of the closing,
and may be converted at the Investor's option anytime after the earlier of
November 2, 1997, or that date on which the resale of the Ordinary Shares
issuable upon conversion of the debenture is registered with the SEC. At any
time prior to November 5, 1997, the Company may convert the debenture into 2000
newly authorized Preferred Shares designated Series A for purposes of such
conversion. The Series A Preferred Shares will have a liquidation preference of
$1,000 per share plus a premium of 6% per annum. The Series A Preferred Shares
will not be entitled to any dividends nor will they have any voting rights
except as provided by Israeli law with respect to extraordinary corporate
transactions. The Series A Preferred Shares will be convertible into Ordinary
Shares on the same terms as the debenture as described above. The term of the
Series A Preferred Shares will also prohibit the issuance of Preferred Shares
with terms superior or equal to the terms of the Series A Preferred Shares for
some period of time. In addition, the Company has the right to redeem the
debenture on or after July 31, 1998, as long as no event of default has occurred
thereunder, at a redemption price of not less than 125% of the principal amount
thereof and any accrued and unpaid interest or other payments thereon.
Conversion of the debenture (or Preferred Shares) will result in dilution
of the Company's current shareholders. Assuming that the Company's share price
remains at its September 25, 1997, level of $2.78 per share, the debenture (or
Preferred Shares) will be convertible into approximately 960,000 Ordinary
Shares. If the share price decreases below $2.78, the conversion price may
decrease and there would be a
-6-
<PAGE>
corresponding increase in the number of shares into which the debenture (or
Preferred Shares) would be converted. It cannot be predicted whether the
share price will decrease to this extent.
The Investor was also granted warrants to purchase 250,000 Ordinary Shares
of the Company at an exercise price of $2.80 per share and additional warrants
to purchase 50,000 Ordinary Shares at an exercise price of $3.20 per share. For
facilitating the completion of this investment, The Shemano Group, Inc., San
Francisco, California, and Equity Management Partners, Atlanta, Georgia, (the
"Placement Agents") were granted warrants to purchase a total of 300,000
Ordinary Shares at an exercise price of $1.725 (equal to 115% of the closing bid
price on the day of closing). The warrants expire on August 5, 2002, if not
exercised earlier.
The Company has entered into an agreement with Investor Resource Services,
Inc. ("IRSI"), by which IRSI will provide financial advisory, strategic business
planning, and investor and public relations services designed to make the
investing public knowledgeable about the benefits of stock ownership in the
Company. Pursuant to this Agreement, the Company has issued 612,000 Ordinary
Shares to IRSI as compensation for the services to be provided ("IRSI Shares").
Of these IRSI Shares, 312,000 shares are included in this Registration
Statement, and 300,000 shares are to be registered within twelve months of their
delivery to IRSI.
The Company has also engaged Mr. Brad Gillingham as a consultant in the
areas of strategic sales and marketing. Mr. Gillingham received warrants to
purchase 100,000 Ordinary Shares at $2.00 per share. The warrants expire on
August 1, 1999, if not exercised earlier. The agreement with Mr. Gillingham also
provides for the grant of additional warrants to purchase 100,000 Ordinary
Shares at an exercise price of $4.00 per share provided that the Company
receives $1,000,000 of revenue attributable to his efforts within 12 months of
the execution of the agreement.
Pursuant to the terms of the agreements between the Company and the
Placement Agents, IRSI and Gillingham, the Company must file a registration
statement on Form S-3 for the Ordinary Shares to be issued to IRSI and reserved
for issuance upon exercise of the warrants granted to the Placement Agents and
Gillingham.
On December 9, 1996, the Company issued warrants to purchase a total of
200,000 Ordinary Shares as compensation for consultant services by Robert J.
Laikin, Michael Mosher and the Manufacturers Indemnity and Insurance Company of
America ("MIICA") (the "Laikin Consultants"). Half of these warrants (100,000)
vested immediately and the remainder were to vest one year later provided that
each of the Laikin Consultants were still providing consulting services to the
Company on September 30, 1997. On August 18, 1997, the Company terminated the
consultant agreements with the Laikin Consultants. Thus, the condition precedent
to the vesting of the second 100,000 warrants do not exist. The exercise price
of the warrants to purchase 100,000 Ordinary Shares is $7.00 per share and the
warrants expire on December 9, 2003, if not exercised earlier.
The warrants issued to the Laikin Consultants provide the warrant holders
with the right to "piggyback" on certain registration statements filed by the
Company. All three of the Laikin Consultants have chosen to exercise such right.
-7-
<PAGE>
The 812,000 Ordinary Shares being registered pursuant to this Registration
Statement are 312,000 shares which are being issued to IRSI and the shares which
have been reserved for issuance upon exercise of the warrants issued to the
Placement Agents, Gillingham and the Laikin Consultants.
LITIGATION AND OTHER CLAIMS
On September 9, 1997, AgentSoft was served with a complaint filed by its
former president and vice president. The complaint named as defendants
AgentSoft, Accent, Todd Oseth as Chief Executive Officer of AgentSoft and
Jeffrey Rosenschein as Chairman of the Board of Directors of AgentSoft, as
defendants in Israeli Labor Court. The complaint alleges wrongful termination of
the plaintiffs' employment agreements in May 1997, failure to pay the
contractually required severance, and failure to pay, in a complete and timely
manner, the statutory severance payments required by Israeli law upon the
termination of an employee. Plaintiffs seek compensation in excess of NIS
650,000 (or approximately $186,000). The Company believes that the termination
of their employment was done properly and lawfully and that, therefore, any
claim by these former employees in connection with such termination is without
grounds. Accordingly, the Company estimates that the chances of an outcome
favorable to the Company and the other defendants is high.
In the course of its business, the Company is the subject of claims, some or
which may mature into litigation. Although the Company is aware of claims
asserted against it, the Company is not aware, except as discussed in the
preceding paragraph, of any claims which have a reasonable possibility of
adverse outcome in a material amount. However, unforeseen circumstances may
cause such claims, or other, currently unknown claims, to result in adverse
outcomes in material amounts.
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS,
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, PRIOR TO MAKING AN
INVESTMENT DECISION. CERTAIN STATEMENTS IN THIS PROSPECTUS THAT ARE NOT
HISTORICAL ARE FORWARD-LOOKING, INVOLVING KNOWN AND UNKNOWN RISKS AND
UNCERTAINTIES. MANY FACTORS, INCLUDING THE RISK FACTORS IDENTIFIED BELOW, COULD
CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT
MAY BE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT; ANTICIPATED FUTURE LOSSES;
LIMITED OPERATING HISTORY
The Company has incurred net losses since 1992 of approximately $0.7
million, $3.1 million, $7.8 million and $21 million for the years ended
December 31, 1993, 1994, 1995 and 1996, respectively, and a net loss of
approximately $4.8 million for the six months ended June 30, 1997. As of June
30, 1997, the Company had an accumulated deficit of $38 million and a total
shareholders' deficit of $1.7 million. Pursuant to its revised business plan,
the Company intends to continue to make expenditures on new product
introductions, marketing, research and development, customer support and
administrative infrastructure over the near term. As a result, the Company
expects to incur net losses through the end of 1997, and possibly beyond.
-8-
<PAGE>
The Company commenced operations in 1988 and shipped its first multilingual
word processing product in Israel in 1992, and internationally in 1994.The
Company shifted the focus of its operations in 1997 to the development and
distribution of multilingual software development tools for the non-retail
markets, and its first such products were released in the second quarter of
1997.The Company, therefore, has a limited operating history upon which to base
an evaluation of its current principal business and prospects. Operating results
for future periods are subject to numerous uncertainties, and there can be no
assurance that the Company will achieve or sustain profitability on an annual or
quarterly basis. The Company's prospects must be considered in light of the
risks encountered by companies in the early stage of development, particularly
companies in new and rapidly evolving markets. Future operating results will
depend upon many factors, including the demand for the Company's Internet
products, the level of product and price competition, the ability of the Company
to develop and market new products and product enhancements, the success of the
Company in attracting and retaining motivated and qualified personnel, the
ability of the Company to control its costs and general economic conditions.
There can be no assurance that the Company will be successful in addressing such
risks.
INDEPENDENT PUBLIC ACCOUNTANT'S DOUBT AS TO COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN
The report of the Company's independent public accountants attached as part
of the Company's 1996 Annual Report on Form 10K contains an explanatory
paragraph as to the Company's ability to continue as a going concern. Among the
factors cited by the accountants as raising substantial doubt as to the
Company's ability to continue as a going concern is that the Company has
incurred losses from operations of approximately $21 million during the year
ended December 31, 1996, and had an accumulated deficit of approximately $33
million as of December 31, 1996.
SIGNIFICANT CAPITAL REQUIREMENTS; NEED FOR ADDITIONAL FINANCING
The Company's capital requirements in connection with its development and
marketing activities have been and will continue to be significant. The Company
has been dependent upon the proceeds of sales of its securities, as well as
various government guaranteed and private loans, to fund its development and
marketing activities. The Company is not generating sufficient revenues from its
operations to fund its activities and is, therefore, dependent on the proceeds
of the sale of equity and other financing devices to continue the development of
its technology and the marketing of its products. The Company anticipates, based
on its currently proposed assumptions relating to its operations and financing
plans, that it will have sufficient cash to satisfy its contemplated through the
end of 1997. In the event that financings and cash flow prove to be insufficient
to fund operations (due to a change in the Company's plans or a change, or an
inaccuracy, in its assumptions or as a result of unanticipated expenses,
technical difficulties, problems or otherwise), the Company would be required to
seek additional financing sooner than currently anticipated. There can be no
assurance that additional financing will be available to the Company on
commercially reasonable terms, or at all. The Company has no current arrangement
with respect to, or sources of, additional financing. The inability to obtain
additional financing, when needed, would have a material adverse effect on the
Company, including possibly requiring the Company to curtail or cease its
operations.
SUBSTANTIAL INDEBTEDNESS AND ENCUMBRANCES OF ASSETS
The Company's operations have been and continue to be financed in part from
short-term and long-term indebtedness provided by various financial
institutions. As of June 30, 1997, the outstanding balances of the Company's
short-term and long-term indebtedness were approximately $1.6 million and
-9-
<PAGE>
$1.9 million, respectively. All of the Company's assets are pledged as
collateral to secure the Company's indebtedness. If the Company is unable to
generate sufficient cash flow from operations to meet scheduled debt payments
or otherwise to comply with the terms of such indebtedness, it may be
required to refinance all or a portion of its existing debt or to obtain
additional financing. There can be no assurance that the Company will be able
to obtain such refinancing or additional financing. If no such refinancing or
additional financing is available when needed, the Company may be forced to
default on its debt obligations which would have a material adverse effect on
the Company, including the possibility of receivership or liquidation of the
Company. In such an event, the Company's secured creditors could elect to
foreclose on the Company's assets and it is likely that the debenture, the
warrants and the Shares would be worthless. In addition, the agreements
relating to the Company's bank indebtedness provide for an event of default
(and the ability to accelerate and demand repayment of outstanding loans) if
there is a material adverse change in the Company's financial condition.
There can be no assurance that a deterioration of the Company's results of
operations or financial condition will not result in an event of default
under the Company's bank indebtedness.
UNPROVEN ACCEPTANCE OF THE COMPANY'S PRODUCTS
The Company's future operating results will depend primarily upon its
ability to gain market acceptance of its multilingual software development tools
and its Internet productivity tools, such as WEBTAMER. Because the market for
the Company's Internet-related products is new and evolving, it is difficult to
assess or predict with any assurance the growth rate, if any, or the size of the
market for such products. There can be no assurance that the market for the
Company's products and services will develop, or that the Company's products and
services will achieve market acceptance. If the market fails to develop,
develops more slowly than expected or becomes saturated with competitors, or if
the Company's products do not achieve significant market acceptance, the
Company's business, operating results or financial condition will be materially
adversely affected.
UNCERTAINTY OF PRODUCT AND TECHNOLOGY DEVELOPMENT
The Company has not completed development and testing of a number of its
proposed products, some of which are still in the planning stage or in
relatively early stages of development. The Company's success will depend in
part upon the ability of its proposed products to meet targeted performance and
cost objectives, and will also depend upon the timely introduction of its
products into the marketplace and the acceptance of its products by end-users.
The Company will be required to commit considerable time, effort and resources
to finalize development of its proposed products and product enhancements.
Product development efforts may be subject to unanticipated delays, expenses,
difficulties, and the possible insufficiency of funding to complete development
and other risks inherent in the development of new products and technologies.
There can be no assurance as to when, or whether, such product development
efforts will be successfully completed.
DEPENDENCE ON COMPATIBLE THIRD-PARTY SOFTWARE MANUFACTURERS' PRODUCTS AND DESIGN
The Company's products are currently designed, and its proposed products
are being designed, to be utilized with the Windows operating system and with
the products and standards established by certain other software manufacturers.
Accordingly, the performance of certain of the Company's existing products
depends on the actions of other manufacturers, in particular Microsoft. Such
manufacturers may change their products or take actions that could make it more
difficult for the Company to develop its products or
-10-
<PAGE>
that could significantly impair the performance of the Company's products.
For example, if Microsoft were to modify future versions of Windows in ways
that required the redesign of the Company's Windows-based products, such
modification could be detrimental to the Company. Although the Company
anticipates that it will be able to adapt its products if necessary, there
can be no assurance that changes in existing products or the introduction of
new products by third parties will not have a material adverse effect on the
performance of the Company's products and technology and on the Company's
financial performance. In addition, the Company's products may need to be
adapted in the future in order to be compatible with other or new operating
systems so that the Company may maintain and expand its product offerings.
There can be no assurance that the Company will be able to make any necessary
adaptations on a timely basis.
PRODUCT CONCENTRATION
Until the beginning of 1996, substantially all of the Company's revenues
were attributable to the sale of its multilingual word processing products.
Beginning in the first quarter of 1996, a substantial portion of the
Company's revenues has been derived from the sale of the Company's
Internet-related products. During the first quarter of 1997, the Company
began to de-emphasize the retail sale of its products and increased its focus
on the development and sale of software tools and products to be sold to
other software developers, corporations and original equipment manufacturers
("OEM"). The Company currently expects that sales of these products will
account for a substantial portion of its revenues for the foreseeable future.
As a result, factors adversely affecting the pricing of or demand for such
products and services, such as competition or technological change, could
have a material adverse effect on the Company's business, operating results
or financial condition.
COMPETITION; TECHNOLOGICAL OBSOLESCENCE
The market for general and Internet-based software and services is new,
intensely competitive, rapidly evolving and subject to rapid technological
change. In addition, there are relatively few barriers to entry into the
software business in general, including into those areas in which the Company
offers and intends to offer products. The Company expects competition in the
market for multilingual software tools for the globalization of software
products and for Internet-based products to increase substantially in the
future. To the extent that the Company's multilingual Internet products are
substitutes for single or dual language products, the Company's products
presently compete with those of numerous well-established companies,
including Microsoft, Netscape Communications Corporation ("Netscape"),
CompuServe, Inc. ("CompuServe") and Quarterdeck Office Systems, Inc.
("Quarterdeck"). The Company expects that AgentSoft will continue to develop
intelligent agent technology that the Company will use in its Internet
productivity products and that the Company will apply artificial intelligence
concepts to document processing and other applications. To the extent that
the Company and AgentSoft are successful in developing such technologies, the
Company will compete with some of the same well-established companies listed
above as well as with companies to which Accent or AgentSoft will license
such technology. These companies have substantially greater financial,
technical, personnel and other resources than the Company and have
established reputations for success in the development, licensing and sale of
their products and technology. In addition, certain companies have
developed, or may be expected to develop, technologies or products that may
be functionally similar to some or all of those being developed by the
Company. The markets for the technology and products being developed by the
Company are characterized by rapid changes and evolving industry standards,
often resulting in product obsolescence or short product life cycles.
Accordingly, the ability of the Company to compete will depend upon, among
other factors, its ability to develop and introduce to the marketplace in a
timely manner new products and
-11-
<PAGE>
product enhancements. There can be no assurance that the Company will be
able to compete successfully, that its present or future competitors will not
develop technologies or products that render the Company's products and
technology obsolete or less marketable or that the Company will be able to
introduce new products and product enhancements that are competitive with
other products marketed by industry participants.
DEPENDENCE ON THE INTERNET
Sales of AgentSoft's products and the products of Accent which
incorporate AgentSoft technology will depend in large part upon the
development and maintenance of a robust industry and infrastructure for
providing Internet access and carrying Internet traffic. Because global
commerce and online exchange of information on the Internet and other similar
open wide area networks are new and evolving, there can be no assurance that
the Internet will prove to be a viable commercial marketplace or a viable
medium for the publication and distribution of information. Further, there
can be no assurance that the necessary infrastructure, such as a reliable
network backbone or timely development of complementary products, such as
high speed modems, necessary to make the Internet a viable commercial
marketplace or a viable medium for the publication and distribution of
information will be developed, or, if developed, that the Internet will
become a viable commercial marketplace or a viable medium for the publication
and distribution of information. If the necessary infrastructure or
complementary products are not developed, or if the Internet does not become
a viable commercial marketplace or a viable medium for the publication and
distribution of information, the Company's business, operating results or
financial condition will be materially adversely affected.
PRODUCT RETURNS; COLLECTION OF ACCOUNTS RECEIVABLE; CONSIGNMENT ARRANGEMENTS
Consistent with industry practices, the Company may accept product
returns or provide other credits in the event that a distributor or a
retailer holds excess inventory of the Company's products. Although the
Company is moving away from the retail market toward the OEM and
business-to-business market where product returns are less likely, the risk
of product returns and customer defaults from prior period activities could
have an adverse impact on the Company's future operating results. In
addition, the Company's sales are normally made on credit terms and it does
not hold collateral to secure payment. Therefore, default in payment by one
or more of the Company's customers could adversely affect the Company's
business, operating results or financial condition. There can be no assurance
that actual returns and uncollectible receivables will not exceed the
Company's reserves for such items and any significant increase in product
returns or uncollected accounts receivable beyond reserves could have a
material adverse effect on the Company's business, operating results or
financial condition. Consistent with industry practice, the Company also, on
occasion, transfers products through the distribution channel on a
consignment basis. There can be no assurance that such consignment
arrangements will result in additional sales for the Company or that they
will not result in excess inventory or increased working capital requirements
for the Company.
MANAGEMENT OF A RAPIDLY CHANGING BUSINESS
The Company's business is currently undergoing major change as its new
management shifts its focus from the retail market to the developer,
corporate and OEM markets. This shift in the Company's focus has placed, and
is expected to continue to place, a significant strain on the Company's
management and operations, including its sales, customer support, research
and development, finance and administrative
-12-
<PAGE>
operations. The Company has recently been able to recruit a chief executive
officer and chief financial officer who have experience in managing large or
rapidly growing business organizations. However, the Company anticipates that
continued growth, if any, may require it to recruit and hire additional new
development, managerial, finance, sales and marketing and support personnel.
There can be no assurance that the Company will be successful at hiring or
retaining such personnel. The Company's ability to compete effectively and
its future growth, if any, will require the Company to continually improve
its financial and management controls, reporting systems and procedures on a
timely basis, implement new systems as necessary and expand, train and manage
its employee workforce. There can be no assurance that the Company's
controls, systems or procedures will be adequate to support the Company's
operations. The failure of the Company's management to respond effectively to
changing business conditions could have a material adverse effect on the
Company's business, operating results or financial condition.
PRODUCT DEFECTS AND PRODUCT LIABILITY
The Company's software products are highly complex and sophisticated and
could from time to time contain design defects or software errors that could
be difficult to detect and correct. Errors, bugs or viruses may result in the
loss of or the delay in market acceptance or the loss of customer data.
Although the Company has not experienced any material adverse effect
resulting from any software defects or errors, there can be no assurance
that, despite testing by the Company and its customers, errors will not be
found in new products, which could result in a delay in or inability to
achieve market acceptance and thus could have a material adverse impact upon
the Company's business, operating results or financial condition.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is substantially dependent on the performance
of its executive officers and key employees. Five members of senior
management are parties to employment agreements with the Company, three of
which expire in July 1998, and one of which expires in February 2000. The
Company believes that the loss of the services of one or more of such key
personnel could have a material effect on its ability to develop new products
and product enhancements. In addition, Dr. Jeffrey Rosenschein, Chief
Technology Officer-Agents, and one of the five senior managers with an
employment agreement, has an academic affiliation with Hebrew University in
Jerusalem. Dr. Rosenschein was granted a leave of absence from Hebrew
University for the two-year period which expires in October 1997, at which
time Dr. Rosenschein plans to return to his full-time position at the
University. Dr. Rosenschein plans to continue as a director of the Company
and as a paid consultant to the Company, and his termination as a full-time
Company employee is not expected to have a material adverse affect on the
Company. The success of the Company also is dependent upon its ability to
hire and retain additional qualified executive, scientific and marketing
personnel. There can be no assurance that the Company will be able to hire
or retain such necessary personnel. Moreover, there can be no assurance that
the loss of the services of any of its executive officers or other key
employees would not have a material adverse effect on the Company's business,
operating results or financial condition.
PROTECTION OF PROPRIETARY INFORMATION
The Company's success and ability to compete is dependent in part upon
its proprietary software technology. While the Company relies on a
combination of trade secret and copyright law, nondisclosure agreements and
technical measures to establish and protect its proprietary rights and has
also filed patent applications for certain aspects of its technology, there
can be no assurance that the steps taken by the
-13-
<PAGE>
Company to protect its proprietary rights will be adequate to prevent
misappropriation of the technology or independent development by others of
software products with features based upon, or otherwise similar to, those of
the Company's products. To license its retail products, the Company
primarily relies on "shrink wrap" licenses that are not signed by the
end-user and, therefore, may be unenforceable under the laws of certain
jurisdictions. In addition, effective copyright and trade secret protection
may be unavailable or limited in certain foreign countries, and the global
nature of the Internet makes it virtually impossible to control the ultimate
destination of the Company's products. Despite the Company's efforts to
protect its proprietary rights, unauthorized parties may attempt to copy
aspects of the Company's products or to obtain and use information that the
Company regards as proprietary. Litigation may be necessary in the future to
enforce the Company's intellectual property rights, to determine the validity
and scope of the proprietary rights of others, or to defend against claims of
infringement or invalidity. Such litigation could result in substantial costs
and diversion of resources and could have a material adverse effect on the
Company's business, operating results or financial condition.
IMPACT OF INFLATION AND CURRENCY FLUCTUATION
The vast majority of the Company's sales are made in dollars and most of
the Company's expenses are in dollars and New Israeli Shekels ("NIS"). The
cost of the Company's operations in Israel, as expressed in dollars, is
influenced by the extent to which any increase in the rate of inflation in
Israel over the rate of inflation in the U.S. is not offset by the
devaluation of the NIS in relation to the dollar. The change in the cost of
the Company's operations in Israel, as expressed in dollars, relates
primarily to the cost of salaries in Israel, a substantial portion of which
are paid in NIS linked to the Consumer Price Index in Israel (the "Israeli
CPI"). While the Company may in the future, to the extent it deems
advisable, purchase currency options or other hedging instruments to decrease
the risk of the NIS devaluation against the dollar being less than the rate
of inflation in Israel, no assurance can be given that any such financial
strategy will be successful in limiting the Company's risk.
CONCENTRATION OF OWNERSHIP; POTENTIAL CONFLICTS OF INTEREST
As of the date of this Prospectus, IMR and its affiliates, together with
the Company's officers and directors, will beneficially own an aggregate of
approximately 33.3% of the issued and outstanding Ordinary Shares. Such
ownership will allow such persons to have significant influence over the
outcome of any matters that require shareholder approval, including the
election of all of the Company's directors (subject, in certain instances, to
the requirement of the affirmative vote of a specified percentage of
disinterested shareholders), and thereby to potentially control the affairs
of the Company. In addition, pursuant to the Stock Purchase Agreement, dated
as of May 11, 1994, by and among the Company, IMR Investments, Accent
Software Partnership, Pal-Ron Marketing, Ltd., KZ Overseas Holding Corp.,
Robert Rosenschein and Jeffrey Rosenschein, the Company agreed that IMR
Investments will be entitled to designate one person to serve on the Board of
Directors of the Company. The current designee of IMR Investments is Roger
Cloutier. Although the director designated by IMR Investments is required
under Israeli law to vote in a manner consistent with his fiduciary duty to
the Company, there can be no assurance that conflicts of interest will not
arise with respect to the foregoing or that such conflicts will be resolved
in a manner favorable to the Company.
-14-
<PAGE>
SUBSTANTIAL DILUTION
The book value of the Company's Ordinary Shares was approximately
$(0.15) per share at June 30, 1997. Therefore, purchasers of Shares in this
Offering will experience immediate and substantial dilution.
NO DIVIDENDS
The Company has never paid cash dividends on its Ordinary Shares.
Payment of dividends on the Ordinary Shares is within the discretion of the
Board of Directors of the Company and will depend upon the Company's
earnings, its capital requirements and financial condition and other relevant
factors. It is the Company's intention to retain earnings, if any, to
finance the operation and expansion of its business and, therefore, it does
not expect to pay any cash dividends on its Ordinary Shares in the
foreseeable future.
SIGNIFICANT OUTSTANDING TRADE PAYABLES
At June 30, 1997, the Company owed approximately $3.3 million to various
trade and other creditors of which approximately 50% was more than 60 days
past due. The inability to obtain credit on commercially reasonable terms, or
at all, resulting in an interruption of supplies or services, would have a
material adverse effect on the Company's operations.
MARKET PRICE VOLATILITY
The market price of the Company's Ordinary Shares has been highly
volatile and in the past 52 weeks the daily closing price has ranged from
$15.38 to $1.47. Factors such as the Company's financial results,
introduction of new products by the Company or its competitors, factors
affecting the software industry generally and factors relating to conditions
in the State of Israel may have a significant impact on the market price of
the Company's Ordinary Shares. Additionally, in recent years, the United
States stock markets have experienced a high level of price and volume
volatility and market prices for the stock of many companies (particularly of
small and emerging growth companies, the common stock of which trades in the
over-the-counter-market) have experienced wide price fluctuations that have
not necessarily been related to the operating performance of such companies.
POSSIBLE DELISTING OF SHARES FROM THE NASDAQ SMALL CAP MARKET;
RISKS RELATING TO PENNY STOCKS
The Ordinary Shares are quoted on the Nasdaq Small Cap Market. In order
to maintain its listing on the Nasdaq Small Cap Market, the Company must meet
certain requirements. As of June 30, 1997, the Company was in compliance
with all of the Nasdaq listing requirements except that the Company's total
capital and surplus was less than the required level. Specifically, on June
30, 1997, the Company's total capital and surplus of $(1,716,000) was below
the minimum Nasdaq requirement of $1,000,000. On August 15, 1997, the
Company was notified by The Nasdaq Stock Market, Inc. that it was no longer
in compliance with all of the Nasdaq Small Cap Market listing requirements.
The Company has responded to Nasdaq with a plan for restoring its capital and
surplus to the required level. On September 15, 1997, the Company received a
letter from Nasdaq stating that the Company's plan to restore its capital
surplus to the required level was not acceptable and that the Company's
Ordinary Shares would be delisted. The Company requested and was granted a
hearing regarding Nasdaq's decision to delist the Company's
-15-
<PAGE>
Ordinary Shares. On October 21, 1997, Nasdaq accepted the Company's plan and
granted the Company a temporary exception which expires on November 10, 1997.
By that date, in order to maintain its Small Cap listing, the Company must
make a public filing with the SEC and Nasdaq evidencing its compliance with
the listing requirements plan. The Company believes that it will be able to
demonstrate compliance with the requirements; however, there can be no
assurance of this and, therefore, the Company's shares may be delisted from
the Nasdaq Small Cap Market.
In addition, the Nasdaq Stock Market adopted increases in the
quantitative standards for maintenance of listings on the Nasdaq Small Cap
Market. The new standards for continued listing on the Nasdaq Small Cap
Market, which the Company anticipates will be implemented in February 1998,
include maintenance of any of (a) $2,000,000 of net tangible assets, (b)
$35,000,000 of market capitalization or (c) $500,000 of net income for two of
the last three years and the elimination of the requirements to maintain
minimum total assets and a minimum capital and surplus. The Company currently
meets the new requirements; however, there can be no assurance that the
Company will continue to meet the new standards for maintaining its listing
on the Nasdaq Small Cap Market and, if it fails to meet such standards, that
it will not be delisted.
If the Company's securities were to become delisted from trading on The
Nasdaq Small Cap Market and the trading price of such securities were to
remain below $5.00 per share or per unit, trading in such securities would
also be subject to the requirements of certain rules promulgated under the
Exchange Act, which require additional disclosure by broker-dealers in
connection with any trades involving a stock defined as a penny stock
(generally, any non-Nasdaq equity security that has a market price of less
than $5.00 per share, subject to certain exceptions). Such rules require the
delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith, and
impose various sales practice requirements on broker-dealers who sell penny
stock to persons other than established customers and accredited investors
(generally institutions). For these types of transactions, the broker-dealer
must make a special suitability determination for the purchase and have
received the purchaser's written consent to the transaction prior to sale.
The additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in the Ordinary Shares
which could severely limit the market liquidity of the Ordinary Shares and
the ability of Selling Shareholders to sell their Shares in the secondary
market.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
As of the date of this Prospectus, 12,308,442 Ordinary Shares are issued
and outstanding, or are to be issued under a binding agreement, of which
7,824,535 are freely tradable. There are 3,871,907 Ordinary Shares eligible
for sale, without registration, under Rule 144 subject to certain volume
limitations and other conditions prescribed by such rule and to the
contractual restrictions described below. As soon as this Registration
Statement is declared effective by the Commission, 312,000 of the IRSI Shares
will be freely tradable. There are 300,000 additional IRSI Shares that are to
be registered within twelve months of their issuance, and will be freely
tradable upon an effective Registration Statement. There are warrants
outstanding for the purchase of 3,947,413 Ordinary Shares. Most of the
shares underlying these warrants have been or are being registered and will
be freely tradable. In addition, there are options outstanding for 1,518,583
shares, of which 1,168,583 will be freely tradable upon exercise.
-16-
<PAGE>
Finally, the shares into which the August 5, 1997 Debenture issued to CC
Investments, LDC, may be converted have been registered and will be freely
tradable at such time as that debenture is converted.
In addition, the Company has granted to certain of its security holders,
including certain of its executive officers, directors and IMR Investments,
certain registration rights. No prediction can be made as to the effect, if
any, that sales of such securities or the availability of such securities for
sale will have on the market prices prevailing from time to time.
LOCATION IN ISRAEL
The Company is incorporated under the laws of, and has its offices and a
significant portion of its operations (including all of its product
development activities) in, the State of Israel. Although most of the
Company's sales are currently made to customers outside Israel, the Company
is, nonetheless, directly influenced by the political, economic and security
conditions affecting Israel. Any major hostilities involving Israel, the
interruption or curtailment of trade between Israel and its trading partners
or a significant downturn in the economic or financial condition of Israel
could have a material adverse effect on the Company's business, financial
condition or results of operations. There can be no assurance that ongoing or
revived hostilities or other factors related to the political or economic
status of Israel will not have an adverse impact on the Company's business,
operating results or financial condition.
SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS
Service of process upon directors and officers of the Company and the
Israeli experts named herein, many of whom reside outside the United States,
may be difficult to effect within the United States. Furthermore, since the
majority of the Company's assets are located outside the United States, any
judgment obtained in the United States against the Company may not be
enforceable within the United States. The Company has been informed by its
legal counsel in Israel, Yigal Arnon & Co., that in such counsel's opinion
there is doubt as to the enforceability of civil liabilities under the
Securities Act and the Exchange Act, in original actions instituted in
Israel. However, subject to certain time limitations, Israeli courts are
empowered to enforce foreign (including United States) final executory
judgments for liquidated amounts in civil matters obtained after due trial
before a court of competent jurisdiction (according to the rules of private
international law currently prevailing in Israel) which enforces similar
Israeli judgments. The enforcement of such judgments is conditioned upon: (i)
adequate service of process having been effected and the defendant having had
a reasonable opportunity to be heard; (ii) such judgments or the enforcement
thereof not being contrary to the law, public policy, security or sovereignty
of the State of Israel; (iii) such judgments not being obtained by fraud and
not conflicting with any other valid judgment in the same matter between the
same parties; and (iv) an action between the same parties in the same matter
not pending in any Israeli court at the time the lawsuit is instituted in the
foreign court. The Company has irrevocably appointed Accent Worldwide as the
Company's agent to receive service of process in any action against the
Company in any federal or state court sitting in New York County, State of
New York arising out of the Offering or any purchase or sale of securities in
connection therewith.
Foreign judgments enforced by Israeli courts generally will be payable
in Israeli currency, and a special permit of the Israeli Controller of
Foreign Currency will be required to convert the Israeli currency into
dollars and to transfer such dollars out of Israel. The usual practice in an
action to recover an amount in a non-Israeli currency is for the Israeli
court to render judgment for the equivalent in Israeli currency at the rate
of exchange in force on the date thereof. Under existing law, a foreign
judgment payable in foreign
-17-
<PAGE>
currency may be paid in Israeli currency at the rate of exchange on the date
of payment, but the judgment debtor may also make payment in foreign currency
if the Israeli exchange control regulations then in effect permit such
foreign currency payment. Pending collection, the amount of the judgment of
an Israeli court stated in Israeli currency will ordinarily be linked to the
Israeli CPI plus interest at the annual rate (set by Israeli regulations)
prevailing at such time. Judgment creditors must bear the risk that they will
be unable to convert their award into foreign currency that can be
transferred out of Israel. All judgment creditors must bear the risk of
unfavorable exchange rates.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of
the Selling Shareholders, as described below. The Company will use the
proceeds of any warrant exercise for general corporate purposes and working
capital. See "Selling Shareholders" and "Plan of Distribution" described
below.
SELLING SHAREHOLDERS
The following table sets forth the names of the Selling Shareholders and
the number of Ordinary Shares beneficially owned by such Selling Shareholders
as of September 5, 1997 (assuming all warrants are exercised) and offered
hereby. None of the Selling Shareholders has held any position, office or
other material relationship with the Company or any of its affiliates within
the past three years, other than as a result of its ownership of the shares
or warrants. The Shares may be offered from time to time by the Selling
Shareholders named below. However, the Selling Shareholders are under no
obligation to sell all or any portion of the Shares under this Prospectus or
otherwise. Because the Selling Shareholders may sell all or part of their
Shares, no estimate can be given as the number of Shares that will be held by
any Selling Shareholder upon termination of any offering made hereby.
<TABLE>
Shares Beneficially Owned
Number of Shares After Offering
Beneficially Owned -------------------------
Prior to the Offering Percent
Name of Selling Shareholder and Offered Hereby Number Outstanding
- --------------------------- --------------------- ------ -----------
<S> <C> <C> <C>
The Shemano Group
601 California Street, Suite 850
San Francisco, CA 94108 270,000 0 0%
Equity Management Partners
3340 Peachtree Road, Suite 620
Atlanta, GA 30326 30,000 0 0%
Investor Resource Services, Inc.
490 Causeway
New Smyrna Beach, FL 32169 612,000 300,000 0.02%
Brad Gillingham
-18-
<PAGE>
201 Harrison Street, Suite 204
San Francisco, CA 94105 100,000 0 0%
Robert J. Laikin
c/o Brightpoint, Inc.
6402 Corporate Drive
Indianapolis, IN 46278 45,000 0 0%
Michael Mosher
c/o Brightpoint, Inc.
6402 Corporate Drive
Indianapolis, IN 46278 10,000 0 0%
Manufacturers Indemnity Insurance
Company of America
5775 Flatiron Parkway, Suite 205
Boulder, CO 80301 45,000 0 0%
</TABLE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time
to time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Shareholders may sell the Shares
being offered hereby on the Nasdaq Small Cap Market, or otherwise, at prices
and under terms then prevailing or at prices related to the then current
market price or at negotiated prices. The Shares may be sold by on or more of
the following means of distribution: (a) a block or cross trade in which the
broker, dealer or agent so engaged will attempt to sell Shares as agent, but
may position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker, dealer or agent as principal and
resale by such broker, dealer or agent for its own account pursuant to this
Prospectus; (c) an over-the-counter distribution in accordance with the rules
of the Nasdaq Small Cap Market; (d) ordinary brokerage transactions (which
may include long and short sales) and transactions in which the broker
solicits purchasers; (e) in privately negotiated transactions; (f) "at the
market" to or through market makers or into an existing market for the
Ordinary Shares; (g) in other ways not involving market makers or into an
existing market for the Ordinary Shares; (h) through transactions in options,
swaps or other derivatives (whether listed or not); or (i) any combination of
the foregoing or other legally available means. 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 the
Shares or otherwise, the Selling Shareholders 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 the Company's Ordinary Shares in
the course of hedging the positions they assume with Selling Stockholders.
The Selling Stockholders may also sell the Company's Ordinary Shares short
and redeliver the shares to close out such short positions. The Selling
Stockholders 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 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 Stockholders may also pledge Shares to a
broker-dealer or other financial institution, and, upon a
-19-
<PAGE>
default, such broker-dealer or other financial institution may effect sales
of the pledged Shares pursuant to this Prospectus (as supplemented or amended
to reflect such transaction). In addition, any 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
Shareholders may arrange for other brokers or dealers to participate.
Brokers, dealers or agents may receive commissions, discounts or concessions
from the Selling Shareholders 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 Act in connection with
such sales, and any such commissions, discounts or concessions may be deemed
to be underwriting discounts or commissions under the Act. The Company will
pay all expenses incident to the registration of the Shares with the SEC.
In order to comply with the securities laws of certain states, if
applicable, the Shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states
the 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 is complied with. The Company has
agreed to use its best efforts to register and qualify the Shares under such
other securities or "blue sky" laws of such jurisdictions in the Unites
States as each Selling Shareholder reasonably requests.
There can be no assurance that the Selling Shareholders will sell all or
any of the Shares.
The Company has agreed to indemnify IRSI and its agents and employees
against any losses, claims, damages or liabilities, joint or several, to
which IRSI or any such other person may become subject insofar as such
losses, claims, damages or liabilities (or actions, suits or proceedings in
respect thereof) arise out of or are based on any untrue statement or alleged
untrue statement of any material fact in this Registration Statement, any
preliminary prospectus, a final prospectus, or any amendment or supplement
thereto; or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading; and will reimburse IRSI or any
such other person for any legal or other expenses reasonably incurred by IRSI
or any such other person in connection with investigating or defending any
such loss, claim, damage, liability, or action, suit or proceeding; provide,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement, or omission or alleged
omission, from this Registration Statement, any preliminary prospectus, final
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished the Company by IRSI
specifically for use in the preparation thereof. None of the other agreements
between the Company and the Placement Agents, Gillingham or the Laikin
Consultants contain any indemnification language.
LEGAL MATTERS
The validity of the securities offered hereby and certain legal matters
in connection with the Offering with respect to Israeli law will be passed
upon for the Company by Yigal Arnon & Co., Tel Aviv, Israel. Certain legal
matters in connection with the Offering with respect to United States law
will be passed upon for the Company by Rothgerber, Appel, Powers & Johnson
LLP, Denver, Colorado.
-20-
<PAGE>
EXPERTS
The audited consolidated financial statements referred to in this
Prospectus and/or included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996, have been audited by Luboshitz, Kasierer &
Co., a Member Firm of Andersen Worldwide, SC, independent 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 giving said
reports. Reference is made to said reports, which include an explanatory
fourth paragraph with respect to the Company's ability to continue as a going
concern.
Statements concerning Israeli law included in this Prospectus or in any
document incorporated by reference herein have been examined by Yigal Arnon &
Co., and have been included upon the authority of such counsel as an expert
in the laws of the State of Israel.
-21-
<PAGE>
No dealer, salesperson or any other individual has been authorized to give
any information or make any representations not contained in this Prospectus in
connection with the Offering covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by the Company, any Selling Shareholder or any other person. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
Shares in any jurisdiction where, or to any person to whom, 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
there has not been any change in the facts set forth in this Prospectus or in
the affairs of the Company since the date hereof or that the information
contained herein is correct as of any time subsequent to the date hereof.
-------------
TABLE OF CONTENTS
Page
----
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . .3
Incorporation of Certain Documents by
Reference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Recent Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
812,000 ORDINARY SHARES
Accent Software
International Ltd.
----------
PROSPECTUS
----------
OCTOBER 23, 1997
-22-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
securities registered under this Registration Statement are estimated to be as
follows:
Securities and Exchange Commission Registration Fee............. $ 716
Israeli Taxes................................................... 100
The Nasdaq Stock Market Filing Fee.............................. 7,500
Printing and Engraving Expenses................................. 1,500
Legal Fees and Expenses......................................... 5,000
-------
Total....................................................... $14,816
-------
-------
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Association of the Company provide that, to the fullest
extent permitted by the Israeli Companies' Ordinance (New Version), 1983, as
amended (the "Companies Ordinance"), the Company may indemnify its directors and
officers for (i) any financial liability imposed upon them for the benefit of a
third party by a judgment, including a settlement or arbitration decision
certified by a court, as a result of an act or omission of such person in his
capacity as a director or officer of the Company; and (ii) reasonable litigation
expenses, including legal fees, incurred by such director or officer or which he
is obligated to pay by a court order, in a proceeding brought against him by or
on behalf of the Company or by others, or in connection with a criminal
proceeding in which he was acquitted, in each case relating to acts or omissions
of such person in his capacity as a director or officer of the Company
("Indemnifiable Event").
The Company's Articles of Association provide that, to the fullest extent
permitted by the Companies Ordinance, the Company may procure directors' and
officers' liability insurance for (i) breach of the duty of care by any director
or officer owed to the Company or to any other person; (ii) breach of fiduciary
duty by any officer or director owed to the Company, provided such person acted
in good faith and had reasonable cause to assume that the action would not
prejudice the interests of the Company; and (iii) any financial liability
imposed upon any director or officer for the benefit of a third party by reason
of an act or omission of such person in his capacity as a director or officer of
the Company. The Company has a directors' and officers' liability insurance
policy that insures the Company's officers and directors against certain
liabilities.
Under the Companies Ordinance, the Company may not indemnify or procure
insurance coverage for the liability of its Office Holders (as defined in the
Companies Ordinance) in respect of any monetary obligation imposed by reason of
(i) an act or omission which constitutes a breach of fiduciary duty, except to
the extent described above; (ii) a willful breach of the duty of care or
reckless disregard of the
II-1
<PAGE>
circumstances or consequences of such breach; (iii) an act or omission done
with the intent to unlawfully realize personal gain; or (iv) a fine or
penalty imposed for a criminal offense.
The Companies Ordinance defines an "Office Holder" to include a director,
general manager, chief executive officer, executive vice president, vice
president, other managers directly subordinate to the general manager, and any
person assuming the responsibilities of the foregoing positions without regard
to such person's title.
In addition, pursuant to the Companies Ordinance, indemnification of, and
procurement of insurance coverage for, an Office Holder of the Company is
permitted if it is approved by the Company's Audit Committee and Board of
Directors. In certain circumstances, the Companies Ordinance also requires
approval of such indemnification and insurance by the Company's shareholders.
ITEM 16. EXHIBITS
4.1 -- Agreement between the Company and Investor Resource Services, Inc.*
4.2 -- Warrant Agreement with The Shemano Group, Inc.*
4.3 -- Warrant Agreement with Equity Management Partners LLP *
4.4 -- Warrant Agreement with Brad Gillingham *
4.5 -- Form of Warrant Agreement covering warrant agreements with
Robert J. Laikin, Michael Mosher and Manufacturers Indemnity and
Insurance Company of America *
5.1 -- Opinion of Yigal Arnon & Co.*
23.1 -- Consent of Luboshitz, Kasierer & Co., a Member Firm of Andersen
Worldwide, SC.*
23.2 -- Consent of Yigal Arnon & Co., contained in their opinion filed as
Exhibit 5.1.*
23.3 -- Consent of Rothgerber, Appel, Powers & Johnson LLP.*
24.1 -- Power of Attorney.*
* Filed Previously
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with
II-2
<PAGE>
the Securities and Exchange Commission pursuant to Rule 424(b) if, in
the aggregate, with changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
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.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof;
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering; and
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) 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 provisions described under Item 14 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 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Colorado Springs, State of Colorado, on this 23rd day
of October 1997.
ACCENT SOFTWARE INTERNATIONAL LTD.
By: /s/ Robert J. Behr
-----------------------------------
Name: Robert J. Behr
Title: Chief Financial Officer
(Principal Financial and
Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated:
SIGNATURE TITLE DATE
/s/ Todd A. Oseth President, Chief Executive Officer October 23, 1997
- -------------------------- and Director (principal executive
Todd A. Oseth officer)
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
/s/ Robert J. Behr Chief Financial Officer (principal October 23, 1997
- -------------------------- financial and accounting officer)
Robert J. Behr
/s/ Robert Rosenschein Chief Technology Officer, Languages October 23, 1997
- -------------------------- and Co-Chairman of the Board of
Robert Rosenschein Directors
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
II-4
<PAGE>
/s/ Roger Cloutier Co-Chairman of the Board of October 23, 1997
- -------------------------- Director
Roger Cloutier
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
/s/ Elliott B. Broidy Director October 23, 1997
- --------------------------
Elliott B. Broidy
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
/s/ Jeffrey Rosenschein Chief Technology Officer, October 23, 1997
- -------------------------- Intelligent Agents, and Director
Jeffrey Rosenschein
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
II-5
<PAGE>
/s/ Meldon E. Levine Director October 23, 1997
- --------------------------
Meldon E. Levine
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
/s/ Mark A. Tebbe Director October 23, 1997
- --------------------------
Mark A. Tebbe
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
/s/ Esther Dyson Director October 23, 1997
- --------------------------
Esther Dyson
By: /s/ Robert J. Behr
- --------------------------
Robert J. Behr, Attorney-in-fact
II-5
<PAGE>
Authorized Representative in the United States:
ACCENT WORLDWIDE, INC.
/s/ Todd A. Oseth
- --------------------------
Todd A. Oseth
By: /s/ Robert J. Behr October 23, 1997
- --------------------------
Robert J. Behr
Attorney-in-fact
EXHIBIT INDEX
4.1 -- Agreement between the Company and Investor Resource Services, Inc.*
4.6 -- Warrant Agreement with The Shemano Group, Inc.*
4.7 -- Warrant Agreement with Equity Management Partners LLP *
4.8 -- Warrant Agreement with Brad Gillingham *
4.9 -- Form of Warrant Agreement covering warrant agreements with Robert J.
Laikin, Michael Mosher and Manufacturers Indemnity and Insurance
Company of America *
5.1 -- Opinion of Yigal Arnon & Co.*
23.1 -- Consent of Luboshitz, Kasierer & Co., a Member Firm of Andersen
Worldwide, SC.*
23.2 -- Consent of Yigal Arnon & Co., contained in their opinion filed as
Exhibit 5.1.*
23.3 -- Consent of Rothgerber, Appel, Powers & Johnson LLP.*
24.1 -- Power of Attorney.*
* Filed Previously
II-6
