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PROSPECTUS SUPPLEMENT
DATED DECEMBER 15, 1999 FILED PURSUANT TO RULE 424(B)(3) AND (C)
TO PROSPECTUS DATED AUGUST 18, 1999 REGISTRATION NUMBER 333-84681
LEVEL 8 SYSTEMS, INC.
4,200,000 SHARES OF COMMON STOCK
------------------------------
This document supplements the prospectus dated August 18, 1999 of Level 8
Systems, Inc. relating to up to 4,200,000 shares of common stock, $.001 par
value, offered by the selling stockholders described below. This document should
be read in conjunction with the prospectus, and this document is qualified by
reference to the prospectus except to the extent that the information provided
by this document supersedes the information contained in the prospectus.
PROSPECTUS COVER
The third paragraph on the prospectus cover page is superseded by the
following:
- Up to 2,100,000 shares of our common stock which are issuable upon the
exercise of warrants. These warrants include warrants issued as part
of the private placement of our Series A 4% Convertible Redeemable
Preferred Stock and warrants granted to the underwriter in our initial
public offering and 1996 public offering.
In addition, the fifth paragraph on the prospectus cover page is superseded
by the following:
We will not receive any of the proceeds from any future sale of the
shares of common stock issued to the selling stockholders upon conversion
of the Series A 4% Convertible Redeemable Preferred Stock or the exercise
of the warrants. Our company will, however, receive the proceeds from the
exercise of the warrants issued to the selling stockholders. The per share
exercise prices of the warrants range from $7.425 to $14.85, subject to
adjustment.
WHERE CAN YOU FIND MORE INFORMATION
Numbers 16 and 17 in the third paragraph under the heading "Where Can You
Find More Information" in the prospectus are superseded by the following and, in
addition, number 18 is hereby added to the third paragraph:
16. Our Quarterly Report on Form 10-Q for the quarter ended June 30,
1999;
17. The description of our common stock set forth in our registration
statement on Form 8-A filed with the SEC on July 11, 1995 (as
modified by the "Description of Capital Stock" contained in this
prospectus); and
18. The audited financial statements of Seer Technologies, Inc. for
its fiscal years ended September 30, 1998, 1997 and 1996 included
in Seer's Annual Report on Form 10-K for its fiscal year ended
September 30, 1998.
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SELLING STOCKHOLDERS
The table on page 16 of the prospectus setting forth information concerning
the selling stockholders is superseded by the following table:
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK
NUMBER OF SHARES TO BE OWNED
NUMBER OF SHARES OF OF COMMON STOCK AFTER OFFERING
COMMON STOCK WHICH -----------------
NAME AND ADDRESS OWNED MAY BE OFFERED NUMBER PERCENT
---------------- ------------------- ------------------- ------- -------
<S> <C> <C> <C> <C>
Brown and Simpson Strategic Growth
Fund, Ltd.......................... 910,000(1)(2) 910,000(1)(2) * *
Brown Simpson Strategic Growth
Fund, L.P........................ 490,000(1)(2) 490,000(1)(2) * *
Advanced Systems Europe B.V. (a
subsidiary of Liraz Systems,
Ltd.)............................ 2,000,000(1)(3) 1,753,527(2) 246,473 *
Seneca Capital L.P................. 389,040(1)(2) 389,040(1)(2) * *
Seneca Capital International,
Ltd.............................. 410,960(1)(2) 410,960(1)(2) * *
William E. Aaron................... 1,517(4) 1,517(4) * *
Leo T. Abbe........................ 48,248(4) 48,248(4) * *
Richard K. Abbe.................... 48,249(4) 48,249(4) * *
Jonathan Abbey..................... 3,000(4) 3,000(4) * *
Leslie Abbey....................... 3,000(4) 3,000(4) * *
Mitchell Jay Bayer................. 300(4) 300(4) * *
Jeffrey M. Berman.................. 48,248(4) 48,248(4) * *
Michael J. Chill................... 18,489(4) 18,489(4) * *
Scot Cohen......................... 800(4) 800(4) * *
William H. Coons III............... 300(4) 300(4) * *
Edelson Technology Partners III,
L.P.............................. 13,541(4) 13,541(4) * *
Monroe H. Firestone................ 404(4) 404(4) * *
F. Garafalo Electric, Inc.......... 7,250(4) 7,250(4) * *
Raymond H. Godfrey, Jr............. 10,000(4) 10,000(4) * *
Jay B. Gutterman and Cindy R.
Gutterman........................ 2,200(4) 2,200(4) * *
Morton D. Kurzok................... 404(4) 404(4) * *
Adam Lawrence Larkey............... 800(4) 800(4) * *
Jacqueline Miller.................. 100(4) 100(4) * *
Daniel H. Morris................... 300(4) 300(4) * *
Enid Morris........................ 400(4) 400(4) * *
Richard Nager...................... 186,800(5) 900(4) * *
Charles K. and Liza Osburn......... 750(4) 750(4) * *
Christine K. Pollio................ 400(4) 400(4) * *
Vivek N. J. Rao.................... 3,500(4) 3,500(4) * *
Realprop Capital Corp.............. 5,250(4) 5,250(4) * *
Peter Rosenthal.................... 5,000(4) 5,000(4) * *
Andrew L. Rudolph.................. 400(4) 400(4) * *
Irene M. Rudolph................... 100(4) 100(4) * *
John H. Starr...................... 17,956(6) 9,356(4) * *
</TABLE>
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<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK
NUMBER OF SHARES TO BE OWNED
NUMBER OF SHARES OF OF COMMON STOCK AFTER OFFERING
COMMON STOCK WHICH -----------------
NAME AND ADDRESS OWNED MAY BE OFFERED NUMBER PERCENT
---------------- ------------------- ------------------- ------- -------
<S> <C> <C> <C> <C>
John H. Starr and Elizabeth A.
Starr.............................. 17,956(7) 8,600(4) * *
Michael R. Stein................... 1,517(4) 1,517(4) * *
David Emmett Topkins............... 400(4) 400(4) * *
Tradewind Fund I, LP............... 2,750(4) 2,750(4) * *
</TABLE>
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* Less than one percent (1%)
(1) The number of shares of common stock owned by the selling stockholder
includes the aggregate number of shares of common stock which may be
obtained by such stockholder upon the conversion of all of the shares of
Series A Preferred Stock and the exercise of the warrants owned by the
stockholder. However, such selling stockholders are not currently beneficial
owners of all of such shares of common stock.
(2) Consists of common stock issuable upon the conversion of Series A Preferred
Stock and shares issuable upon the exercise of warrants. The exercise price
of these warrants is $10.00 per share of common stock subject to adjustment.
(3) Represents 2,000,000 shares of common stock, one-half of which are shares of
common stock issuable upon the conversion of Series A Preferred Stock and
the other one-half of which are shares issuable upon the exercise of
warrants. The parent of Advanced Systems Europe, Liraz Systems, Ltd., and
its subsidiaries, own additional shares as described in "Advanced Systems
Europe and Liraz" on page 16 of the prospectus.
(4) Represents shares of common stock issuable upon the exercise of warrants
granted in connection with prior underwritten public offerings by Level 8.
(5) Includes 900 shares of common stock issuable upon the exercise of warrants
granted in connection with prior underwritten public offerings by Level 8.
(6) Includes 9,356 shares of common stock issuable upon the exercise of warrants
held by Mr. Starr and 8,600 shares of common stock issuable upon the
exercise of warrants held by Mr. Starr and Elizabeth A. Starr, which
warrants were granted in connection with prior underwritten public offerings
by Level 8.
(7) Includes 8,600 shares of common stock issuable upon the exercise of warrants
held by Mr. Starr and Ms. Starr and 9,356 shares of common stock issuable
upon the exercise of warrants held by Mr. Starr, which warrants were granted
in connection with prior underwritten public offerings by Level 8.
EXPERTS
The following paragraph is added on page 21 as the final paragraph under
the heading "Experts" appearing on page 20:
The financial statements for Seer Technologies, Inc. for the fiscal
years ended September 30, 1998, 1997 and 1996 which are incorporated by
reference in this prospectus have been audited by PricewaterhouseCoopers
LLP, independent accountants, as stated in their report with respect
thereto. The financial statements have been incorporated by reference in
this prospectus in reliance upon their report given on their authority as
experts in auditing and accounting.
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