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As filed with the Securities and Exchange Commission on September 29, 1997
Registration No. 333-34455
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 (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Numbers)
organization)
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.
___________
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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.
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PROSPECTUS
ACCENT SOFTWARE INTERNATIONAL LTD.
3,800,000 ORDINARY SHARES(1)
___________
THIS PROSPECTUS RELATES TO THE PUBLIC OFFERING, WHICH IS NOT BEING
UNDERWRITTEN, OF UP TO 3,800,000 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) UPON CONVERSION
OF A 6% DEBENTURE OF THE COMPANY ("DEBENTURE") OR SHARES OF PREFERRED STOCK
ISSUABLE IN EXCHANGE FOR THE DEBENTURE ("PREFERRED SHARES"); (ii) AS PAYMENT
OF INTEREST DUE ON THE DEBENTURE; AND (iii) UPON EXERCISE OF WARRANTS TO
PURCHASE AN AGGREGATE OF 300,000 ORDINARY SHARES ISSUED IN CONNECTION WITH
THE SALE OF THE DEBENTURE ("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,
AND THE COMPANY'S DEBT WILL BE REDUCED UPON THE CONVERSION OF THE DEBENTURE
IN AN AMOUNT EQUAL TO THE AMOUNT WHICH IS CONVERTED. THE SHARES HAVE BEEN
RESERVED BY THE COMPANY FOR ISSUANCE UPON THE CONVERSION OF THE DEBENTURE AND
THE EXERCISE OF THE WARRANTS. THE DEBENTURE AND THE WARRANTS WERE ISSUED BY
THE COMPANY IN CONNECTION WITH AN INVESTMENT BY CC INVESTMENTS LDC, PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), PROVIDED BY REGULATION D THEREUNDER. THE SHARES
ARE BEING REGISTERED BY THE COMPANY PURSUANT TO REGISTRATION RIGHTS
AGREEMENT, DATED AUGUST 5, 1997, BETWEEN THE COMPANY AND CC INVESTMENTS LDC.
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 SEPTEMBER 25, 1997, THE LAST REPORTED SALE OF THE ORDINARY SHARES ON
THE NASDAQ SMALL CAP MARKET WAS $2.78. 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.
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(1) To the extent allowable under the Act, including Rule 416 thereto, this
Prospectus shall be deemed to cover an indeterminate number of additional
Ordinary Shares of the Company as may become issuable upon conversion of the
debenture and/or Convertible Preferred Shares of the Company issuable in
exchange for the debenture and the exercise of the warrants (i) to prevent
dilution resulting from stock splits, stock dividends or similar
transactions, or (ii) by reason of changes in the conversion price of the
debenture and/or the Preferred Shares or the exercise price of the warrants
in accordance with the terms thereof.
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___________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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 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 September 29, 1997
AVAILABLE 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-
2711, 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
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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.
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 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
(6) The Company's Current Report on Form 8-K dated August 20, 1997;
(7) 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; and
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(8) The Company's Proxy Statement for its Special Meeting of Shareholders to be
held on October 10, 1997.
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
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 Kingdom, Germany and the Benelux countries and has
been applied for in the United States Patent and Trademark Office. 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.
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
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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.
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
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the research and development expenditures will help enable the Company to
achieve its strategic product development objectives. In addition, 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. Mr. Cloutier, along with Robert
Rosenschein, Elliott Broidy and Mark Tebbe, constitute a newly-formed
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 Class A for purposes of such
conversion. The Class A Preferred Shares will have a liquidation preference of
$1,000 per share plus a premium of 6% per annum. The Class A Preferred Shares
will not be entitled to any dividends nor will it have any voting rights except
as provided by Israeli law with respect to extraordinary corporate transactions.
The Class A Preferred Shares will be convertible into Ordinary Shares on the
same terms as the debenture as described above. The term of the Class A
Preferred Shares will also prohibit the issuance of Preferred Shares with terms
superior or equal to the terms of the Class 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 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 270,000 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 placement agents, The
Shemano Group, Inc., San Francisco, California, and Equity Management Partners,
Atlanta, Georgia, 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.
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Pursuant to the terms of the registration rights agreement which was part
of the financing arrangement, the Company is required to file a registration
statement on Form S-3 for the Ordinary Shares reserved for issuance upon
conversion of the debenture (or Preferred Shares) and exercise of the warrant.
The 3,800,000 Ordinary Shares being registered pursuant to this
Registration Statement are the shares which have been reserved for issuance upon
conversion of the debenture and exercise of the warrants.
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 to be registered immediately, and
300,000 shares must 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 IRSI,
Gillingham and the placement agents for those deals, the Company must file
immediately a registration statement on Form S-3 for 312,000 of the Ordinary
Shares to be issued to IRSI and all the shares 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
does 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. The Company intends to file
a Registration Statement on Form S-3 covering these shares during October
1997.
LITIGATION AND OTHER CLAIMS
On September 9, 1997, the Company was served with a complaint filed in
Israeli Labor Court by its former president and vice president of its
majority-owned subsidiary AgentSoft. 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. The
complaint alleges wrongful termination of the plaintiffs' employment
agreements in May 1997, failure to pay the contractually required
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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 strongly 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 of 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
lead 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.
The Company commenced operations in 1988 and shipped its first multilingual
word processing product in Israel in 1992, and internationally in 1994.
However, 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. Accordingly, the Company has only 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
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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 $1,554,000 and
$1,920,000, 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
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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, 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 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.
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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
lifecycles. 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 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
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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 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, will require it
to recruit and hire a substantial number of 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.
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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; PART-TIME OFFICER
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, 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 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
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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 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.
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.
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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 has ranged from $1-7/16 to $14-3/4. 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 as of the
date of this Memorandum. In order to continue to meet the Nasdaq Small Cap
Market's maintenance requirements, however, the Company must maintain
$2,000,000 in total assets, a $200,000 market of the public float, $1,000,000
in total capital and surplus, and a minimum bid price of $1.00. 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 was $(1,716,000). 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 SmallCap Market listing requirements. On August 29,
1997, the Company provided to Nasdaq a copy of the Company's 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 Ordinary Shares, and Nasdaq's decision to delist the Company's
shares has been stayed until the October 9, 1997 hearing before Nasdaq. As
of the date of this Memorandum, the Company is in the process of preparing
for the hearing before Nasdaq, and is attempting to prepare a plan that will
meet Nasdaq's requirements. There can be no assurance, however, that Nasdaq
will agree that the Company's plan is adequate and, therefore, the Company's
shares may be delisted from the Nasdaq SmallCap Market.
In addition, the Nasdaq Stock Market recently adopted increases in the
quantitative standards for maintenance of listings on The Nasdaq Small Cap
Market. The proposed standards for continued listing on The Nasdaq Small Cap
Market include maintenance of any of (x) $2,000,000 of net tangible assets,
(y) $35,000,000 of market capitalization or (z) $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
anticipates the proposed changes will be implemented in February 1998. There
can be no
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assurance that, if adopted, the Company will be able 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
8,199,035 are freely tradable. There are 3,497,407 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. There are 312,000 Ordinary Shares
that the Company intends to register with the Commission pursuant to a Form
S-3 Registration Statement in the near future. As soon as such Registration
Statement is declared effective by the Commission, those 312,000 Ordinary
Shares will be freely tradable. There are 300,000 Ordinary 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 for which are or will be freely tradable upon exercise. Finally, the
shares into which the debenture may be converted are being registered and
will be freely tradable at such time that the 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
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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 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.
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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 August 21, 1997 (assuming the debenture is convertible on such date)
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 debenture 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.
Pursuant to Rule 416 of the Securities Act, the Selling Shareholders may
also offer and sell Shares issued with respect to the debenture, the
Preferred Shares and warrants as a result of anti-dilution provision,
including by reason of changes in the conversion price of the debenture and
Preferred Shares, and stock splits, dividends and similar events.
Shares Beneficially Owned
Number of Shares After Offering
Beneficially Owned -------------------------
Prior to the Offering Percent
Name of Selling Shareholder and Offered Hereby Number Outstanding
- --------------------------- --------------------- ------ -----------
CC Investments LDC
c/o Citco Fund Services
(Cayman Islands) Ltd.
Corporate Center
West Bay Road
PO Box 31106 SMB
Grand Cayman, Cayman Islands 1,236,904 0 0%
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
-18-
<PAGE>
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 Common
Stock 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 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 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 United
States as each Selling Shareholder reasonably requests.
The conversion of the debenture into Shares by the Selling Shareholders
is subject to compliance by the Selling Shareholders with certain contractual
restrictions with the Company. There can be no assurance that the Selling
Shareholders will sell all or any of the Shares.
The Company has agreed to indemnify the Selling Shareholders and any
person controlling a Selling Shareholder for any claims arising out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or the omission or alleged omission to state
therein a material fact required to be stated or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus
if used prior to the effective date of such Registration Statement, or
contained in the final prospectus (as amended or supplemented, if the Company
files any amendment or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
other law, including, without limitation, any state securities law, or any
rule or regulation thereunder relating to the offer or sale of the Shares.
The Selling Shareholders have agreed to indemnify the Company and certain
related persons for claims arising from the matters set forth above provided
that the violation upon which
-19-
<PAGE>
the claim is based occurred in reliance upon and in conformity with written
information furnished to the Company by a Shareholder expressly for use in
connection with such Registration Statement.
The Company has agreed with the Selling Shareholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
until the earlier of the date on which all of the Shares have been sold and
the date on which all of the Shares may immediately be sold to the public
without registration pursuant to Rule 144(k) under the Act.
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.
EXPERTS
The audited consolidated financial statements referred to 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.
-20-
<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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3,800,000 ORDINARY SHARES
Accent Software
International Ltd.
-----------
PROSPECTUS
-----------
SEPTEMBER 29, 1997
<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. . . . . . $ 2,653
The Nasdaq Stock Market Filing Fee . . . . . . . . . . . . . . 7,500
Israeli Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 100
Printing and Engraving Expenses. . . . . . . . . . . . . . . . 1,700
Legal Fees and Expenses. . . . . . . . . . . . . . . . . . . . 38,500
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . 500
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $50,953
-------
-------
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
<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 - Securities Purchase Agreement dated July 31, 1997, between CC
Investments LDC and Accent Software International Ltd., which includes
the Convertible Debenture, two Warrant Agreements and the Registration
Rights Agreement as exhibits thereto.*
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 (included on page II-3 to II-5).*
- -------------
* 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 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
II-2
<PAGE>
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.
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 29th day of September 1997.
ACCENT SOFTWARE INTERNATIONAL LTD.
By: /s/ Robert J. Behr
-----------------------------------------------
Name: Robert J. Behr
Title: Chief Financial Officer
(Principal Financial and Accounting Officer)
II-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated:
<TABLE>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Todd A. Oseth President, Chief Executive Officer and Director September 29, 1997
- ------------------------ (principal executive officer)
Todd A. Oseth
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
/s/ Robert J. Behr Chief Financial Officer (principal financial September 29, 1997
- ------------------------ and accounting officer)
Robert J. Behr
/s/ Robert Rosenschein Chief Technology Officer, Languages, and September 29, 1997
- ------------------------ Co-Chairman of the Board of Directors
Robert Rosenschein
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
/s/ Roger Cloutier Co-Chairman of the Board of Directors September 29, 1997
- ------------------------
Roger Cloutier
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
/s/ Elliott B. Broidy Director September 29, 1997
- ------------------------
Elliott B. Broidy
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
/s/ Jeffrey Rosenschein Chief Technology Officer, Intelligent Agents, September 29, 1997
- ------------------------ and Director
Jeffrey Rosenschein
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
/s/ Meldon E. Levine Director September 29, 1997
- ------------------------
Meldon E. Levine
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
/s/ Mark A. Tebbe Director September 29, 1997
- ------------------------
Mark A. Tebbe
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
/s/ Esther Dyson Director September 29, 1997
- ------------------------
Esther Dyson
By: /s/ Robert J. Behr
--------------------
Robert J. Behr, Attorney-in-fact
II-4
<PAGE>
Authorized Representative in the United States:
ACCENT WORLDWIDE, INC.
/s/ Todd A. Oseth
- ------------------------
Todd A. Oseth
By: /s/ Robert J. Behr September 29, 1997
-------------------
Robert J. Behr
Attorney-in-fact
</TABLE>
EXHIBIT INDEX
4.1 - Securities Purchase Agreement dated July 31, 1997, between CC
Investments LDC and Accent Software International Ltd., which includes
the Convertible Debenture, two Warrant Agreements and the Registration
Rights Agreement as exhibits thereto.*
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 (included on pages II-3 to II-5).*
- ----------------------
* Filed Previously
II-5
