<PAGE>
As filed with the Securities and Exchange Commission on February 23, 1998
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
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 of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Numbers) Identification No.)
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. / /
___________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER ORDINARY SHARE (1) OFFERING PRICE(1) FEE
<S> <C> <C> <C> <C>
Ordinary Shares,
NIS .01 nominal
value per share 4,568,150 $0.672 $3,069,796.80 $ 905.60
</TABLE>
(1) Based upon the average of the high and low sales prices of the Company's
Ordinary Shares on The Nasdaq Small Cap Market on February 19, 1998,
estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 of the Securities Act of 1933, as
amended.
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.
4,568,150 ORDINARY SHARES (1)
___________
THIS PROSPECTUS RELATES TO THE PUBLIC OFFERING, WHICH IS NOT BEING
UNDERWRITTEN, OF UP TO 4,568,150 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 UPON CONVERSION OF
PREFERRED SHARES PREVIOUSLY ISSUED IN NOVEMBER AND DECEMBER 1997 TO CC
INVESTMENTS LDC AND THE MARSHALL COMPANIES. THE COMPANY WILL RECEIVE NO PART OF
THE PROCEEDS OF SALES OF THE SHARES. THE SHARES HAVE BEEN RESERVED BY THE
COMPANY FOR ISSUANCE AND 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 FEBRUARY 19, 1998, THE LAST REPORTED SALE OF THE ORDINARY SHARES ON THE
NASDAQ SMALL CAP MARKET WAS $0.719. 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 9.
___________
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
- ----------------------
(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
Convertible Preferred Shares of the Company (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 Preferred Shares in accordance with
the terms thereof.
1
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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 February 23, 1998
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 60661-2511, 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
2
<PAGE>
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 Company's Registration Statement on Form S-3 dated August 27, 1997;
The Company's Amended Registration Statement on Form S-3 dated September
29, 1997;
(9) The Company's Proxy Statement for its Extraordinary Meeting of Shareholders
to be held on
3
<PAGE>
October 6, 1997;
(10) The Company's Registration Statement on Form S-3 dated October 16, 1997;
(11) The Company's Amended Registration Statement on Form S-3 dated October 23,
1997;
(12) The Company's Current Report on Form 8-K dated November 6, 1997;
(13) The Company's Quarterly Report on Form 10-Q for the quarter ending
September 30, 1997;
(13) The Company's Amended Registration Statement on Form S-3 dated November 17,
1997;
(14) The Company's Registration Statement on Form S-3 dated February 17, 1998;
and
(15) 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 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, France and the Benelux countries. The Company has applied to
register AGENTSOFT, GLOBAL DEVELOPMENT KIT, LIVE AGENT, WEBTAMER and
WORDPOINT 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. In the second half of 1997, Accent released WordPoint,
an interactive translation utility which allows a user to receive
instantaneous word-for-word translations of text in nearly any Windows
application in, currently, six languages.
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,
LIVE AGENT 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.
5
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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
On August 5, 1997, the Company completed a financing arrangement with CC
Investments LDC (the "August 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 August Investor a 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 (i) $2.09; or (ii) 75% of the average bid price of the Ordinary Shares for
the five trading day period preceding the date of conversion (the AAugust
Debenture). The August Debenture would automatically convert into Ordinary
Shares on August 5, 1999, two years after the date of the closing, and could
be converted at the August 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 August Debenture is registered with the SEC.
Such registration occurred on September 29, 1997. The Company had the right,
at any time prior to November 5, 1997, to convert the August Debenture into
2000 newly authorized Preferred Shares designated Series A for purposes of
such conversion. The Series A Preferred Shares were to have a liquidation
preference of $1,000 per share plus a premium of 6% per annum. The Series A
Preferred Shares were not to be entitled to any dividends or any voting
rights except as provided by Israeli law with respect to extraordinary
corporate transactions. The Series A Preferred Shares were convertible into
Ordinary Shares on the same terms as the August Debenture as described above.
The terms of the Series A Preferred Shares also prohibited the issuance of
Preferred Shares with terms superior or equal to the terms of the Series A
Preferred Shares for some period of time, without the August Investor=s
consent. In addition, the Company had the right to redeem the August
Debenture on or after July 31, 1998, as long as no event of default had
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.
On October 16, 1997, the August Investor converted $1,000,000 of the
August Debenture, together with accrued interest. Based upon a conversion
price of approximately $1.88 per share, the Company issued 538,300 Ordinary
Shares to the August Investor on October 21, 1997.
On October 17, 1997, the Company notified the August Investor that it
was exercising its right to exchange the debenture for Preferred Shares,
effective 31 October 1997.
On October 31, 1997, prior to the Company's issuance of Series A
Preferred Shares in exchange for the remaining $1,000,000 August debenture,
the August Investor converted $500,000 of the remaining debenture. Based upon
a conversion price of approximately $1.65 a share, the Company issued 308,240
Ordinary Shares to the August Investor that day. The Company issued 500
Series A Preferred Shares to the August Investor on October 31, 1997.
6
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On December 19, 1997, the August Investor converted the 500 Series A
Preferred Shares, together with accrued interest. Based upon a conversion
price of approximately $0.46 per share, the Company issued 1,112,769 Ordinary
Shares to the August Investor on December 26, 1997.
On August 4, 1997, the Company entered into an agreement with Investor
Resource Services, Inc. ("IRSI"), pursuant to which IRSI was to 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 issued 612,000 Ordinary Shares to IRSI as compensation for the
services to be provided ("IRSI Shares"). Of these IRSI Shares, 312,000 shares
were included in a Registration Statement filed on October 16, 1997, and
amended on October 23, 1997, and 300,000 shares were to be registered within
twelve months of their delivery to IRSI.
Pursuant to the terms of the agreement between the Company and IRSI, the
Company filed a registration statement on Form S-3 on October 16, 1997, for
the Ordinary Shares to be issued to IRSI. This Registration Statement was
declared effective on October 24, 1997, after the filing of an amended
Registration Statement the prior day.
On November 6, 1997, the Company completed a financing arrangement with
the CC Investments LLC, Nelson Partners, Olympus Securities, Ltd., Profinsa
Investments, Inc., and the Marshall Companies (collectively the "November
Investors") pursuant to Regulation D of the Securities Act of 1933. The
Company received $4,000,000 in cash before expenses, and a commitment that
upon the occurrence of certain conditions, including the effectiveness of a
Registration Statement, the Company would receive an additional $1,750,00 in
cash before expenses. In return for the aggregate purchase price of
$4,000,000, the Company issued the November Investors debentures in the
amount of $4,000,000, 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 (i)
$2.45; or (ii) 80% of the average bid price of the Ordinary Shares for the
five trading day period preceding the date of conversion (the "First Closing
Debentures") and warrants to purchase a total of 800,000 Ordinary Shares of
the Company at an exercise price of $2.45.
The First Closing Debentures were immediately converted by the Company
into 4,000 Series B Preferred Shares. The Series B Preferred Shares have a
liquidation preference of $1,000 per share plus a premium of 6% per annum.
The Series B Preferred Shares are not entitled to any dividends or any voting
rights except as provided by Israeli law with respect to extraordinary
corporate transactions. The Series B Preferred Shares are convertible into
Ordinary Shares on the same terms as the November Debentures as described
above. The terms of the Series B Preferred Shares also prohibited the
issuance of Preferred Shares with terms superior or equal to the terms of the
Series B Preferred Shares for some period of time, without the November
Investors' consent.
The additional $1,750,000 investment closed on December 16, 1997. On
that day, the Company issued CC Investments, LLC, Nelson Partners, Olympus
Securities, Ltd. and Profinsa Investments, Inc. (the "December Investors")
1,750 Series B Preferred Shares convertible into Ordinary Shares upon the
same terms and conditions as contained in the First Closing Debentures (the
"Second Closing Preferred Shares") (The First Closing Debentures and Second
Closing Preferred Shares are collectively referred to as the
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<PAGE>
"November Convertible Securities.") As part of the $1,750,000 aggregate
purchase price, the December Investors received additional warrants to
purchase a total of 350,000 Ordinary Shares of the Company at an exercise
price of $2.45. The November Convertible Securities automatically convert
into Ordinary Shares on November 6, 1999, two years after the date of the
closing, and could be converted at the November and December Investors'
option anytime after the earlier of November 11, 1997, or that date on which
the resale of the Ordinary Shares issuable upon conversion of the November
Convertible Securities was registered with the SEC, provided that no more
than 50% of the principal amount of such securities could be converted prior
to December 15, 1997. At any time prior to November 11, the Company was free
to convert all or part of the First Closing Debentures into up to 4,000 newly
authorized Preferred Shares designated Series B for purposes of such
conversion. In addition, the Company has the right to redeem the November
Convertible Securities on or after November 6, 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.
As of January 14, 1998, Nelson Partners and Olympus Securities, Ltd. had
converted all of the Series B Preferred Shares issued to them, and, based
upon a conversion price that ranged from $0.33 to $1.80, were issued a total
of 3,739,953 Ordinary Shares. As of January 16, 1998, Profinsa Investments,
Inc. had converted all of its Series B Preferred Shares and, based upon a
conversion price that ranged from $0.35 to $1.33, were issued 2,235,023
Ordinary Shares.
CC Investments has converted 1,300 of its 2,225 Series B Preferred
Shares as of February 12, 1998, and based upon a conversion price that ranged
from $0.335 to $0.365, was issued 3,775,537 Ordinary Shares.
Conversion of the remaining 1,425 Series B Preferred Shares into
Ordinary Shares will result in dilution of the Company's current shareholders.
Based upon a conversion price of $0.5852 per share (80% of the average of the
closing bid price on the five trading days prior to February 20, 1998), these
remaining Series B Preferred Shares will be convertible into 2,435,065
Ordinary Shares. If the share price changes, the conversion price will either
increase or decrease accordingly and there will be a corresponding change in
the number of shares into which the remaining Series B Preferred Shares will
be converted. It can not be predicted whether the share price will increase
or decrease in this manner.
For facilitating the completion of the November Investment, The Shemano
Group, Inc., San Francisco, California, (the "November Placement Agent") was
granted warrants to purchase a total of 787,500 Ordinary Shares at an
exercise price of $2.45. The warrants expire on November 6, 2002, if not
exercised earlier.
On January 30, 1998, the Company and IRSI executed an amendment to their
August 4, 1997 agreement. Pursuant to this amendment, the Company agreed to
issue an additional 550,000 Ordinary Shares to IRSI for further compensation
for the services to be provided under the August 4, 1997 agreement. In
addition, the Company agreed to immediately file a registration statement
covering these 550,000 Ordinary Shares and the 300,000 Ordinary Shares issued
to IRSI pursuant to the August 4, 1997 agreement, but not yet registered.
This registration statement was filed on February 17, 1998.
8
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On February 12, 1998, the Company executed an agreement with MGZ
International Corporation ("MGZ") pursuant to which it agreed to pay MGZ
$225,000 in the form of freely tradable Ordinary Shares of the Company. This
payment will be made in recognition of the assistance being given by MGZ in
the negotiation of a three year distribution agreement between Accent
Worldwide and the GI Group, a Russian distributor of software products which
intends to purchase the Company's software products for distribution in
Russia (the "Distribution Agreement"), and is contingent upon the execution
and a certain minimum performance of the Distribution Agreement.
The 4,568,150 Ordinary Shares being registered pursuant to this
Registration Statement are being registered pursuant to the Registration
Rights Agreement with the November Investors, which requires the Company to
have registered the number of Ordinary Shares equal 200% of the number of
Ordinary Shares which would be issuable to those investors upon the
conversion, as of February 20, 1998, of the 1,425 Preferred Shares held by
them.
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;
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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 $7.7 million for the nine months ended September 30, 1997. As
of September 30, 1997, the Company had an accumulated deficit of $40.9
million and a total shareholders' deficit of $2.3 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 the first quarter
of 1998, and possibly beyond.
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.
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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. 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 September 30, 1997, the outstanding balances of the
Company's short-term and long-term indebtedness were approximately $1.6
million and $1.4 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.
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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. 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 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 Language Information Technology ("LIT") products for the
software localization/globalization and translation service market is
intensely competitive, rapidly evolving and subject to rapid technological
change. In addition, there are relatively few barriers to entry in 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 LIT products for the localization/globalization of software
products to increase substantially in the future. Currently, competition is
experienced primarily from companies which have large numbers of human
translators who can perform localizations manually. These companies number
over 1,500 around the world, but are generally small in size. Some of the
Company's larger competitors are Lernout & Hauspie, ALPNET and ILE. However,
while these companies are competition, they are also customers or potential
customers for the Company's software products. The Company's competition for
software tools that address localization and document management comes mostly
from Corel Corporation, IBM and Multiling.
Moreover, 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.
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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 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.
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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, 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 expired in October 1997, at which
time he returned to his full-time position at the University. Dr.
Rosenschein has continued 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
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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
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 (ANIS@). 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 13.4% 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
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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.
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 September 30, 1997, the Company owed approximately $2.4 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
$0.38 to $7.50. 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.
SUBSTANTIAL DILUTION
The book value of the Company's Ordinary Shares was approximately
$(0.17) per share at September 30, 1997. Therefore, purchasers of Shares in
this Offering will experience immediate and substantial dilution.
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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 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. However, the delisting action was stayed
when the Company requested and was granted a hearing regarding Nasdaq's
decision to delist the Company's Ordinary Shares. The hearing was held on
October 9, 1997. On October 21, 1997, the Company received the decision of
the hearing panel to grant it a temporary exception from Nasdaq listing
requirements. The hearing panel ruled that the Company had until November 10,
1997 to file with Nasdaq and the Securities and Exchange Commission the
Company's quarterly report on Form 10-Q and a report on Form 8-K showing that
it had at least $2,650,000 in capital and surplus. Pending such filing and a
further review by Nasdaq, the Company's stock symbols would be changed to
ACNFC and ACUFC for the Ordinary Shares and the Units, respectively. On
November 6, 1997, the Company filed a Current Report on Form 8-K disclosing
the pro forma effects of the $4,000,000 financing arrangement completed on
that same day. On November 7, 1997, the Company was notified by Nasdaq that
it had met the requirement for continued listing on the Nasdaq SmallCap
Market. On November 11, 1997, the Company's stock symbols reverted to ACNTF
and ACNUF for the Ordinary Shares and the Units, respectively.
Nasdaq also requires listed companies to maintain a minimum bid price of
$1.00 per share. During December 1997, the Company's share price dropped
below $1.00 per share and has remained below $1.00 per share since then.
Therefore, the Company's shares could be delisted from the Nasdaq SmallCap
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. There can be no
assurance that 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
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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, 24,018,264 Ordinary Shares are issued
and outstanding, or are to be issued under a binding agreement, of which
19,846,357 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. 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 1,661,000 shares, of which
1,311,000 will be freely tradable upon exercise. In addition, the shares into
which any remaining balance of the Series B Preferred Shares may be converted
either have been registered and will be freely tradable at such time as they
are converted, or are being registered and will be freely tradable when this
Registration Statement is declared effective by the Commission.
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
19
<PAGE>
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. 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 February 20, 1998, and offered hereby.
20
<PAGE>
Neither 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. 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>
<CAPTION>
Shares Beneficially
Owned After Offering(2)
Number of Shares Number of Shares -----------------------
Beneficially Owned Prior to Beneficially Owned Percent
Name of Selling Shareholder the Offering Offered Hereby Number Outstanding
<S> <C> <C>
CC Investments LDC 601,626 Ordinary Shares Number of shares 0 0%
c/o Citco Fund Services (Cayman plus the number of shares issued upon conversion
Islands) Ltd. issued upon conversion of of 925 Preferred
Corporate Center 925 Preferred Shares and Shares
West Bay Road 750,000 Ordinary Shares
PO Box 31106 SMB from warrants issued in
Grand Cayman, Cayman Islands August, November and
December 1997
Marshall Companies Number of shares issued Number of shares 0 0%
901 North Third Street upon conversion of 500 issued upon conversion
Minneapolis, MN 55401 Preferred Shares and of 500 Preferred
100,000 from warrants Shares
issued in November 1997
</TABLE>
______________________
(2) Assuming that all Ordinary Shares owned by the Selling Shareholders and
registered pursuant to the Registration Statement dated September 29, 1997
(Reg. No. 333-34455) and the Registration Statement dated November 17, 1997
(Reg. No. 333-39697) will have been sold pursuant to such registration
statements prior to or simultaneously with the termination of the Offering
hereunder.
21
<PAGE>
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 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
22
<PAGE>
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. The agreement between the
Company and MGZ does not contain any indemnification language.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for the Company by Yigal Arnon & Co., Tel Aviv, Israel.
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.
23
<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
<TABLE>
<CAPTION>
Page
-----
<S> <C>
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
</TABLE>
4,568,150 ORDINARY SHARES
Accent Software
International Ltd.
___________
PROSPECTUS
___________
FEBRUARY 23, 1998
<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:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.................$906
Israeli Taxes....................................................... $ 0
Printing and Engraving Expenses....................................1,000
Legal Fees and Expenses...........................................$1,000
Accounting Fees and Expenses........................................$500
Transfer Agent Fees..................................................500
Total........................................................$3,906
------
------
</TABLE>
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.
II-1
<PAGE>
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 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
<TABLE>
<S> <C> <C>
4.1 _ Form of Securities Purchase Agreement dated November 6, 1997, between
Accent Software International Ltd., and CC Investments LDC, Nelson
Partners, Olympus Securities, Ltd., Marshall Companies, Profinsa
Investments, which includes the Convertible Debenture, the Warrant
Agreement, Registration Rights Agreement and Certificate of
Designation as exhibits thereto. (Incorporated by reference from
exhibit 4.1 of the Company's registration statement filed on Form S-3
filed on November 17, 1996 (Reg. No. 333-39697).)
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.
24.1 _ Power of Attorney (included on page II-4 to II-5).
</TABLE>
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-2
<PAGE>
(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 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 8 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)
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Todd
A. Oseth, Robert J. Behr and Robert Trachtenberg and each of them, as
attorneys-in-fact, each with the power of substitution, for him in any and
all capacities, to sign any amendment to this Registration Statement and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting to said
attorney-in-fact, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or any one of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
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>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Todd A. Oseth President, Chief Executive Officer and Director February 23, 1998
- ---------------------- (principal executive officer)
Todd A. Oseth
/s/ Robert J. Behr Chief Financial Officer (principal financial and February 23, 1998
- ---------------------- accounting officer)
Robert J. Behr
/s/ Robert Rosenschein Chief Technology Officer, Languages, and February 23, 1998
- ---------------------- Co-Chairman of the Board of Directors
Robert Rosenschein
/s/ Roger Cloutier Co-Chairman of the Board of Directors February 23, 1998
- ----------------------
Roger Cloutier
II-4
<PAGE>
/s/ Jeffrey Rosenschein Chief Technology Officer, Intelligent Agents, and February 23, 1998
- ----------------------- Director
Jeffrey Rosenschein
/s/ Mark A. Tebbe Director February 23, 1998
- ----------------------
Mark A. Tebbe
/s/ Esther Dyson Director February 23, 1998
- ----------------------
Esther Dyson
Authorized Representative in the United States:
ACCENT WORLDWIDE, INC.
/s/ Todd A. Oseth February 23, 1998
- ----------------------
Todd A. Oseth
By: /s/ Robert J. Behr February 23, 1998
- ----------------------
Robert J. Behr
Attorney-in-fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
4.1 _ Form of Securities Purchase Agreement dated November 6, 1997, between
Accent Software International Ltd., and CC Investments LDC, Nelson
Partners, Olympus Securities, Ltd., Marshall Companies, Profinsa
Investments, which includes the Convertible Debenture, the Warrant
Agreement, Registration Rights Agreement and Certificate of
Designation as exhibits thereto. (Incorporated by reference from
exhibit 4.1 of the Company's registration statement filed on Form S-3
filed on November 17, 1996 (Reg. No. 333-39697).)
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.
24.1 _ Power of Attorney (included on page II-4 to II-5).
</TABLE>
<PAGE>
EXHIBIT 5.1
[LETTERHEAD]
February 23, 1998
6241(29)
Accent Software International Ltd.
28 Pierre Koenig Street
Jerusalem 91530
RE: REGISTRATION STATEMENT ON FORM S-3
--------------------------------------
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about February 16, 1998
(the "Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 4,568,150 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
<PAGE>
[LETTERHEAD]
-2-
Selling Shareholders upon conversion of Preferred Shares previously issued in
November and December 1997 to CC Investments LDS and the Marshall Companies.
We understand that the Shares are to be sold from time to time in the
over-the-counter market at prevailing prices or as otherwise described in the
Registration Statement. As your Israeli legal counsel, we have also examined
the proceedings taken by you in connection with the issuance of the Shares.
It is our opinion that the Shares already issued, and the Shares not
yet issued, will be upon issuance, validly issued, fully paid and
non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in
the Registration Statement, including the Prospectus constituting a part
thereof, and any statements thereto.
Very truly yours,
/s/ Yigal Aron & Co.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this form S-3 of our report dated March 20, 1997 included in
Accent Software International Ltd. Form 10-K for the year ended December 31,
1996. It should be noted that we have not audited any financial statements of
the company, subsequent to December 31, 1996 or performed any audit
procedures subsequent to the date of our report.
/s/ LUBOSHITZ, KASIERER & CO.
------------------------------------
LUBOSHITZ, KASIERER & CO.
Member Firm of Andersen Worldwide SC
Tel aviv, Israel
February 20, 1998
