<PAGE> 1
As filed with the Securities and Exchange Commission on May 15, 1996
Registration No. 33-97114
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO.1 TO
Form S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PREMENOS TECHNOLOGY CORP.
(Exact name of Registrant as specified in its charter)
Delaware 51-0367912
(State of incorporation) (I.R.S. Employer Identification No.)
1000 Burnett Avenue, Concord, California 94520 (510) 688-2700
(Address, including zip code, and telephone number,
including area code, of registrants's principal executive offices)
Premenos Technology Corp. Incentive Program
(Full title of the Plan)
LEW JENKINS
Chairman of the Board
PREMENOS TECHNOLOGY CORP.
1000 Burnett Avenue
Concord, California 94520
(510) 688-2700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the filing of this
Post-Effective Amendment No. 1 to Registration Statement, File No. 33-97114.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans check the following box. [X]
CALCULATION OF REGISTRATION FEE
This Post-Effective Amendment No. 1 to the Registration Statement on
Form S-8 (File No. 33-97114) is being filed with respect to the reoffer and
resale of shares of Common Stock acquired or to be acquired pursuant to
incentive stock options, non-qualified stock options, stock appreciation rights
in tandem with stock options or freestanding, restricted stock grants and
director options granted by the Company pursuant to its Incentive Program.
Pursuant to Rule 457(h)(3) of the Securities Act of 1993, as amended (the
"Securities Act"), a registration fee was previously paid with respect to the
offering and issuance by the Company of up to 2,630,000 shares of Common Stock
under the Incentive Program pursuant to a Registration Statement filed on Form
S-8 (File No. 33-97114), and an additional registration fee is not required in
respect of this filing.
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<PAGE> 2
REOFFER PROSPECTUS
- ------------------
PREMENOS TECHNOLOGY CORP.
Common Stock
$.01 Par Value
698,322 Shares
THE OFFERING
This Reoffer Prospectus relates to the reoffer and resale of up to
698,322 shares of Common Stock, $.01 par value (the "Common Stock"), of
Premenos Technology Corp. (the "Company") acquired or to be acquired by the
persons described herein (the "Selling Shareholders") pursuant to incentive
stock options, non-qualified stock options, restricted stock grants and
directors' options granted pursuant to the Incentive Program of the Company
(the "Program"). Specific information as to the Selling Shareholders who may
offer shares of Common Stock pursuant to this Reoffer Prospectus (the "Control
Securities") may be found on page 14 of this Reoffer Prospectus. The
Company has been informed that said shares of Common Stock may be offered from
time to time by the Selling Shareholders publicly through one or more
transactions on a national securities exchange, in the over-the-counter market
or through one or more brokers or by private transactions. The shares of
Control Securities will be offered at prices prevailing at the time of sale.
All brokers' commissions, concessions and discounts will be paid or borne by
the Company. The Company will not receive any of the proceeds from sales of
Common Stock by the Selling Shareholders. All expenses incurred in connection
with the preparation and filing of this Reoffer Prospectus are being borne by
the Company. Specific information with respect to the "Plan of Distribution"
of the Control Securities is set forth on page 14.
The Common Stock is traded on the Nasdaq National Market under the symbol
PRMO. The closing price for the Common Stock on the Nasdaq National Market on
May 13, 1996 was $19-3/8 per share.
See "Risk Factors" set forth on pages 4-13 for a discussion of certain
matters that should be considered by prospective investors.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS REOFFER PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Reoffer Prospectus, and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company or the Selling Shareholders. This Reoffer Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the Control Securities, or as an offer to sell or a solicitation of
any offer to buy the shares of Control Securities in any jurisdiction to any
persons to whom it is unlawful to make such offer or solicitation in such
<PAGE> 3
jurisdiction. Neither the delivery of this Reoffer Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that
there has been no change 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.
The date of this Reoffer Prospectus is May 15, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements, and
other information can be inspected and copied at the public reference facility
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at certain of the Commission's regional
offices, the current addresses of which are: New York Regional Office, Seven
World Trade Center, New York, New York 10048, and Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at prescribed rates.
The Common Stock is listed for trading on the Nasdaq National Market and
copies of the aforementioned materials may be inspected at the office of the
National Association of Securities Dealers, Inc., at 1735 K Street, N.W.,
Washington, D.C. 20006.
This Reoffer Prospectus, which constitutes part of a Registration Statement
filed by the Company with the Commission under the Securities Act, omits
certain of the information contained in the Registration Statement. Reference
is hereby made to the Registration Statement and to the exhibits relating
thereto for further information with respect to the Company and the securities
offered hereby. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents and each such statement
is qualified in its entirety by reference to the copy of the applicable
document filed with the Commission.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO
WHOM A REOFFER PROSPECTUS IS DELIVERED, UPON SUCH PERSON'S WRITTEN OR ORAL
REQUEST, A COPY OF ANY AND ALL OF THE INFORMATION INCORPORATED BY REFERENCE IN
THE REOFFER PROSPECTUS, INCLUDING ANY EXHIBITS SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE INFORMATION WHICH THE REOFFER PROSPECTUS INCORPORATES. SUCH
REQUESTS SHOULD BE ADDRESSED TO CINDY WILLIAMS, PREMENOS TECHNOLOGY CORP., 1000
BURNETT AVENUE, CONCORD, CALIFORNIA 94520, TELEPHONE NUMBER (510) 688-2700.
THE COMPANY
Premenos develops, markets and supports electronic commerce software
products and services that enable businesses to engage in business-to-business
electronic transactions and communications, utilizing electronic data
interchange ("EDI"), e-mail and other communications software. By using the
Company's software and services, businesses are able to transfer electronic
information over proprietary networks or the Internet and other Transmission
<PAGE> 4
Control Protocol/Internet Protocol ("TCP/IP") networks. The Company's products
and services are designed to provide for the timely, accurate, cost-effective
and secure electronic exchange of information between a business and its
trading partners, including suppliers, customers and financial institutions.
Currently, the Company's software applications enable businesses to
electronically execute over 150 types of business transactions, including
essential commercial functions such as purchasing, invoicing, shipping and
notification.
Within electronic commerce, the Company has focused on developing software
products and services for businesses conducting EDI transactions and
communications. EDI is the automated, computer-to-computer exchange of
structured business data, such as purchase orders and invoices, between a
company and its trading partners. The Company's EDI/400 product has been for
the past five years and is currently the leading EDI product in the mid-range
computer market. EDI/400 services though IBM AS/400, which is the predominant
computer in the mid-range computer market. In 1995, the Company released
EDI/ev2, for the developing EDI UNIX market. In addition to these products,
the Company provides extensive service and support to promote customer
satisfaction.
Also in 1995, the Company introduced Templar software and services which
enable businesses to engage in secure and verifiable electronic commerce
transactions over the Internet and other TCP/IP networks at significantly
reduced costs as compared with traditional proprietary networks. Templar is an
integrated solution designed to overcome the current concerns associated with
the use of open networks by providing businesses with the ability to transmit
secure, digitally-signed documents, including EDI documents. To enable these
functions, the Company has licensed public key cryptography software from RSA
Data Security, Inc. ("RSA"). In addition to security, Templar automatically
enables an electronic document recipient to authenticate the sender of the
document and a sender to verify receipt of a document by the intended recipient
and offers both parties the ability to verify document integrity. Furthermore,
Templar enables automated tracking and auditing of business transactions.
The executive office of the Company is located at 1000 Burnett Avenue,
Concord, California 94520. The Company's telephone number is (510) 688-2700,
and its Internet address is http://www.premenos.com.
RISK FACTORS
The following risk factors should be considered carefully in addition to
the other information contained and incorporated by reference in this Reoffer
Prospectus before purchasing the shares of Common Stock offered hereby.
Reliance on Single Product. Substantially all of the Company's revenues,
including substantially all software license fee revenue and service fee
revenue, are derived from its EDI/400 product. If license sales, maintenance
renewals or pricing levels of the EDI/400 product were to decline materially,
whether as a result of technological change, competition or any other factors,
the Company's business, results of operations and financial condition would be
adversely affected. The Company has introduced additional products and
services and its business plan calls for the introduction of other products and
services, although there can be no assurance that any of these generally
available or planned products or services will achieve market acceptance or
will contribute substantially to the Company's revenues in light of the various
issues discussed throughout this "RISK FACTORS" section and elsewhere in this
<PAGE> 5
Prospectus and in the documents incorporated herein by reference. See "-
Ability to Respond to Rapid Change," "- Uncertainty of Market Acceptance of
Templar." See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" and "BUSINESS - Products" in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995 (the
"Annual Report"), which is incorporated herein by reference. See "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" in the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996, which is incorporated herein by reference.
Mid-Range Computer Dependence. The Company's principal product, EDI/400,
and maintenance and other services related thereto, are designed for users of
IBM AS/400 mid-range computers. To date, substantially all of the Company's
revenues have been derived from the AS/400 customer base. The Company's
EDI/eV2 product and related services are also designed for use on UNIX based
mid-range or comparable computing platforms such as the IBM RS/6000, the HP
9000 and SUN platforms. Future revenues from sales of products and services
and recurring maintenance revenues are therefore dependent on continued
widespread use of mid-range computers, particularly the AS/400 and related
operating systems, and the continued support of such computers and operating
systems by the manufacturers thereof. While the Company believes that
customers will continue to use and IBM will continue to support the AS/400,
there can be no assurance of such continued use and/or support. In addition,
because the EDI/400 product requires use of IBM's OS/400 operating system and
the EDI/eV2 product requires use of the UNIX operating system, the Company will
be required to adapt its products to any changes made in such operating systems
in the future. The Company's inability to adapt to future changes in the
OS/400 and UNIX operating systems, or delays in doing so, could have a material
adverse effect on the Company's business, results of operations and financial
condition. See "- Ability to Respond to Rapid Change". See "BUSINESS -
Products" in the Annual Report.
Dependence on the Internet and Internet Infrastructure Development. The
commercial market for products and services for use with the Internet and other
TCP/IP systems has only recently begun to develop, and the Company's future
success with its Templar business will depend in large part on increased
commercial use of the Internet. Because global commerce and on-line exchange of
information on the Internet and other open wide area networks are new and
evolving, it is difficult to predict with any assurance whether the Internet
will be used as a communications network for EDI transactions. There can be no
assurance that the infrastructure or complementary products necessary to make
the Internet such a communications network will be developed or, if developed,
that the Internet will become such a communications network. In particular,
there can be no assurance that the Internet will retain its current flat-rate,
volume-independent and time-of-day-independent pricing structure. There can be
no assurance that the infrastructure necessary to support Templar use on a
widespread basis, such as a recognized certification authority or other public
key infrastructure, will develop. Continued evolution of the Internet and
related infrastructure may be expected, including evolution in unforeseen
directions which could have a material adverse impact on the Company.
Significant commercial use of the Internet has not developed to date, in part,
because of the lack of security and verification processes. Although the
Company's Templar product was designed to alleviate security and verification
constraints, there can be no assurance that widespread commercial use of the
Internet or other TCP/IP systems for electronic commerce will develop, or that
even if such use does develop, that Templar will achieve market acceptance.
See "BUSINESS - Electronic Commerce and EDI" and "Electronic Commerce and the
Internet" in the Annual Report.
<PAGE> 6
New Technology. As a result of Templar's recent introduction into the
market and its limited use to date, there can be no assurance that Templar will
achieve market acceptance or will contribute substantially to the Company's
revenues. Although the Company is unaware of any material quality, reliability
or interoperability problems with the Templar suite of products and services,
there can be no assurance that additional end-user testing and use will not
reveal such problems. The limited scope of end-user implementation of these
products and services may increase the risk that Templar products and services
will be affected by problems beyond that which is generally associated with new
products and services. Moreover, since Templar is intended in part to address
security and reliability issues relating to the Internet, any quality,
reliability or interoperability problems, regardless of materiality, or any
other actual or perceived problems in Templar products or services, could have
a material adverse impact on market acceptance. The impact of any such
problems or perceived problems could be magnified because of possible
heightened customer sensitivity to quality concerns in the context of a new
business mode. There can be no assurance that such problems or perceived
problems will not arise or that in the absence of such problems, that Templar
products and services will receive market acceptance. In addition, there are a
number of features in Templar that the Company believes are innovative and
beneficial, but which have not received wide market acceptance, such as
inclusion of security features at the application level. A failure of Templar
software and services to receive market acceptance for any reason would have a
material adverse effect on the Company's business strategy. See "BUSINESS -
Products - Templar" in the Annual Report.
Software products as complex as those offered by the Company may contain
undetected errors or failures when first introduced or as new versions are
released. There can be no assurance that, despite testing by the Company and
by current and potential customers, errors will not be found in new products
after commencement of commercial shipments, resulting in loss of or delay in
market acceptance. Such loss or delay could have a material adverse effect on
the Company's results of operations. See "BUSINESS - Products" in the Annual
Report.
Intense Competition. The EDI market is intensely competitive and subject
to rapid technological change, evolving industry standards and regulatory
developments. The Company's existing and potential competitors include many
large domestic and international companies that have significantly greater
financial, manufacturing, technological, marketing, distribution and other
resources and larger installed customer bases and longer-standing relationships
with customers than the Company. The Company's principal competitor is
Sterling Commerce, which is substantially larger and has access to greater
financial resources than the Company, and which operates the COMMERCE:Network
Value Added Network ("VAN"). The Company expects competition to increase in
the future from both existing competitors and other companies that may enter
the Company's existing or future markets with solutions which may be less
costly or provide higher performance or additional features than those offered
by the Company. The Company believes that its ability to compete successfully
in the EDI market depends on several factors, both within and outside its
control, including product performance, functionality and reliability, price
and customer service and support. Although the Company currently has the
leading market share in the EDI mid-range computer market, there can be no
assurance that new or established competitors will not offer products superior
to or lower in price than those of the Company.
Although the Company is not aware of any generally available product
offering similar to Templar, intense competition may develop, particularly
<PAGE> 7
since third parties may license from RSA the encryption technology used in
Templar and develop products functionally equivalent to Templar. The Company
expects that competing products will be offered by EDI companies, operators of
VANs and telecommunications companies, some of which have announced that
products similar to Templar are under development. Harbinger Corporation,
Sterling Commerce and GEIS have announced plans to design and develop software
products and to provide services that facilitate electronic commerce over the
Internet. Moreover, the Company anticipates that there will be intense
competition, likely to be in the form of significant price reductions and
product bundling, from providers of alternate modes of electronic commerce,
such as the VAN operators. Since Templar utilizes a new and untested mode for
conducting electronic commerce, the Company could be at a competitive
disadvantage as compared with companies, such as the VAN providers, offering
more traditional and proven modes of conducting electronic commerce.
Similarly, the Company could face competition from alternate electronic
commerce paradigms, such as Privacy Enhanced Mail or others, that could gain
market acceptance at a faster rate than Templar. See "BUSINESS - Competition"
in the Annual Report.
To the extent that Templar is successful, VAN operators and
telecommunications companies may respond by altering their business strategies
in a manner that could be detrimental to the Templar business strategy. A
competitive reaction to Templar by VAN operators and telecommunications
companies could also adversely impact the Company's EDI/400 business, since
such communication providers are currently, and are likely to continue to be
for the foreseeable future, in a position to influence the purchasing decisions
of EDI customers. In addition, certain VANs are also distributors of the
Company's EDI/400 products. As a result, a competitive response by such VANs
could have an adverse impact on the Company's business, operating results and
financial condition. See "BUSINESS - Marketing, Sales and Distribution" in the
Annual Report. Generally, it is impossible to predict the competitive, and
related business, financial and marketing risks and opportunities that may
emerge and affect the competitive viability of Templar. See "BUSINESS -
Competition" in the Annual Report.
The Company also anticipates that the Internet electronic commerce market
will be a focus of rapidly emerging and shifting business and technological
alliances which may dramatically affect the utility of Templar and the ability
of the Company to compete. For example, the emergence of a strong central
certification authority affiliated with a competitive product could have a
substantial adverse impact on market acceptance of Templar. Similarly, the
bundling of a competitive product with a fundamental business service, such as
financial services, telephone or communications services or personal computer
operating systems could seriously adversely affect market acceptance of
Templar. Further, the Company understands that RSA, the supplier of the
encryption technology incorporated into Templar, may enter into one or more
such alliances. As a result, the Company and RSA could become competitors,
resulting in strains on the Company's relationship with RSA. Loss of the right
to use the RSA encryption technology or significant strains on the relationship
between the Company and RSA would severely adversely affect the Company's
Templar business. See "- Reliance on Third Party Vendors" and "BUSINESS -
Competition" in the Annual Report.
Reliance on Third Party Vendors. The Company incorporates into its
products certain software licensed to it by other software developers,
including the public key cryptography software licensed by RSA in connection
with the Company's Templar product. The license agreement between the Company
and RSA does not grant exclusive rights to the Company. Thus, RSA may license
<PAGE> 8
its encryption technology to competitors or potential competitors of the
Company. In addition, the Company's license agreement with RSA may be
terminated in accordance with its terms if the Company is determined to have
breached such agreement or upon the expiration of its term. The Company's
license agreement with RSA is a highly complex document which may be
susceptible of more than one interpretation. Even unfounded assertions by RSA
regarding the Company's rights to use the RSA encryption technology could be
disruptive to the Company's Templar business. See "BUSINESS - Intellectual
Property" in the Annual Report. If the Company were deprived of the right to
use the RSA public key cryptography software in its Templar product for any
reason, there would be a severe adverse impact on the Company's business
strategy and its Templar products and services. See "- Intense Competition,"
and "- Dependence on Proprietary Technology." See "BUSINESS - Intellectual
Property - Third Party Technology" in the Annual Report. The Company is
currently dependent on a single supplier for the database software used in
connection with its EDI/eV2 product, as well as the graphical user interface
software used in connection with both of its EDI products. Although the
Company believes there are other sources for these products, any significant
interruption in the supply of either the database or graphical user interface
products could have a material adverse impact on the Company's sales unless and
until the Company can replace the functionality provided by these products.
See "- Dependence on Proprietary Technology." See "BUSINESS - Products" and "-
Intellectual Property" in the Annual Report.
Because certain of the Company's products incorporate software developed
and maintained by third parties, the Company is to a certain extent dependent
upon such third parties' ability to enhance their current products, to develop
new products on a timely and cost-effective basis and to respond to emerging
industry standards and other technological changes. There can be no assurance
that the Company would be able to replace the functionality provided by the
third party software currently offered in conjunction with the Company's
products in the event that such software becomes obsolete or incompatible with
future versions of the Company's products or is otherwise not adequately
maintained or updated. The absence of or any significant delay in the
replacement of that functionality could have a material adverse effect on the
Company's sales. See "BUSINESS - Products - Templar" in the Annual Report.
Ability to Respond to Rapid Change. The Company's future success will
depend significantly on its ability to enhance its current products and develop
or acquire and market new products which keep pace with technological
developments and evolving industry standards as well as respond to changes in
customer needs. The market for EDI products and Internet software products is
characterized by rapidly changing technology, evolving industry standards and
customer demands, and frequent new product introductions and enhancements. The
Company's strategy to introduce secure EDI over the Internet through its
Templar suite of products and services and to position Templar as a replacement
for proprietary networks, together with ongoing required product development
and potential acquisition activity in response to changes in the industry and
customer needs, will require the Company to manage effectively its strategic
position in a rapidly changing environment. There can be no assurance that the
Company will be successful in developing or acquiring product enhancements or
new products to address changing technologies and customer requirements
adequately, that it will introduce such products on a timely basis, or that any
such products or enhancements will be successful in the marketplace. The
Company's delay or failure to develop or acquire technological improvements or
to adapt its products to technological change would have a material adverse
effect on the Company's business, results of operations and financial
condition. In addition, the Company's primary current source of revenue, its
<PAGE> 9
EDI/400 product and related services, comes from customers using mid-range
computing platforms. The computing needs of organizations worldwide
increasingly include alternative computing platforms and operating systems. A
significant shift in the way the Company's customers use computing platforms
may have a material adverse effect on the Company's business. The failure of
the Company's management team to respond effectively to and manage rapidly
changing technological and business conditions as well as the growth of its own
business, should it occur, could have material adverse impact on the Company's
business, results of operations and prospects. See "- Reliance on Single
Product" and "- Mid-range Computer Dependence."
Dependence on Distribution and Marketing Relationships. A key element of
the Company's current business and its future business strategy is to maintain
and develop relationships with leading companies that market software products
and related services. In connection with its EDI/400 business, the Company has
entered into value added-reseller ("VAR"), distribution, co-marketing and other
agreements with a number of such companies. Many of these agreements are
nonexclusive, and many of the companies with which the Company has agreements
also have similar agreements with the Company's competitors or potential
competitors. The Company believes that its success in penetrating markets for
its EDI and Templar products and services depends in large part on its ability
to maintain these relationships, to add Templar to such arrangements, to
cultivate additional relationships and to cultivate alternative relationships
if distribution channels change. There can be no assurance that the Company's
VAR partners, distributors and co-marketers, most of whom have significantly
greater financial and marketing resources than the Company, will not develop
and market products in competition with the Company in the future, discontinue
their relationships with the Company or form additional competing arrangements
with the Company's competitors. See "BUSINESS - Marketing, Sales and
Distribution" and "- Competition" in the Annual Report.
Dependence on Proprietary Technology. The Company relies on a combination
of trade secret, copyright, patent, and trademark laws and contractual
restrictions to establish and protect proprietary rights to its technology.
The Company has entered into confidentiality and invention assignment
agreements with its employees and, when feasible, enters into non-disclosure
agreements with its suppliers, distributors and others so as to limit access to
and disclosure of its proprietary information. There can be no assurance that
these statutory and contractual arrangements will prove sufficient to deter
misappropriation of the Company's technologies or that the Company's
competitors will not independently develop non-infringing technologies that are
substantially similar to or superior to the Company's technology. The laws of
certain foreign countries in which the Company's products are or may be
developed, manufactured or sold may not protect the Company's products or
intellectual property rights to the same extent as do the laws of the United
States and thus make the possibility of piracy of the Company's technologies
and products more likely. Significant and protracted litigation may be
necessary to protect the Company's intellectual property rights.
The software and electronic commerce industries are characterized by the
existence of a large number of patents, and litigation based on allegations of
patent infringement is not uncommon. From time to time, third parties may
assert exclusive patent, copyright, trademark and other intellectual property
rights to technologies that are important to the Company. There can be no
assurance that third parties will not assert infringement claims against the
Company, that any such assertion of infringement will not result in litigation
or that the Company would prevail in such litigation or be able to license any
valid and infringed patents of third parties on commercially reasonable terms.
<PAGE> 10
Furthermore, in its distribution agreements and certain of its customer and
other agreements, the Company agrees to indemnify certain parties for any
expenses and liabilities resulting from claimed infringements of patents,
trademarks or copyrights or certain other intellectual property rights of third
parties. Litigation, regardless of its outcome, could result in significant
expense to the Company and divert the efforts of the Company's technical and
management personnel from productive tasks.
In October 1995, the Company received a written communication from Cylink
Corporation ("Cylink") in which Cylink asserted that the Company is exposed to
liability for patent infringement in connection with intellectual property
licensed to the Company by RSA. RSA has advised the Company that the
intellectual property does not infringe upon any rights of Cylink and that RSA
has all rights necessary to grant the licenses. No litigation has been
commenced against the Company with respect to the Cylink claim. RSA is
obligated to defend the Company from, and pay any final judgments arising in
connection with, certain patent infringement claims pursuant to RSA's OEM
agreement with the Company. The Company currently intends to commence
negotiations with Cylink relating to the disputed license of intellectual
property rights which the Company believes should not have any material adverse
impact on the Company's Templar business. Although the Company is not aware of
any infringement claims or litigation against the Company other than the Cylink
claim, any such infringement claims or litigation against the Company could
materially and adversely affect the Company's business, operating results and
financial condition.
The Company's right to use any third-party software, including that of RSA,
could be impaired by third-party infringement claims with respect thereto, over
which the Company may have no control. The Company also uses the trademark
EDI/400 pursuant to a license agreement with IBM which is terminable by IBM in
certain circumstances, including upon breach of the agreement by the Company.
Since the Company believes that it is not in technical compliance with the
license agreement, the Company believes that IBM may have the right to
terminate the agreement on sixty (60) days notice. The Company has not
received any indication from IBM that it intends to terminate the agreement.
See "- Reliance on Third Party Vendors." See "BUSINESS - Intellectual
Property" in the Annual Report.
Fluctuating Quarterly Results; Cyclical Business. The Company has
experienced significant quarterly and other fluctuations in revenues and
operating results and expects these fluctuations to continue in the future.
Fluctuations in revenues and operating results may cause volatility in the
Company's stock price. The Company believes that fluctuations have been
attributable to the budgeting and purchasing practices of its customers, the
length of the customer product evaluation process for the Company's products,
the timing of customer system conversions and to the Company's sales commission
practices, which are based partly on quarterly incentives and annual quotas.
Future revenues and operating results may fluctuate as a result of these and
other factors, including the demand for the Company's products and services,
the timing and cost of new product introductions and enhancements, changes in
the mix of products and services sold and in the mix of sales by distribution
channels, the size and timing of customer orders, changes in pricing policies
by the Company or its competitors, changes in the Company's sales practices,
timing of any acquisitions and associated costs, competitive conditions in the
industry and general economic conditions. The Company's revenues and results
of operations may also be affected by seasonal factors which may include higher
revenues in the Company's fourth fiscal quarter and lower revenues in the other
fiscal quarters, especially in the Company's first fiscal quarter.
<PAGE> 11
Historically, the Company has had little or no backlog. Quarterly revenues
and operating results therefore depend primarily on the volume and timing of
orders received during the quarter, which are difficult to forecast. The
Company has often recognized a substantial portion of its license revenues in
the last month of each quarter. A significant portion of the Company's
operating expenses is relatively fixed, since personnel levels and other
expenses are based upon anticipated revenues. Because a substantial portion of
the Company's revenues may not be generated until the end of each quarter, the
Company may not be able to reduce spending in response to sales shortfalls or
delays in any given quarter. These factors can cause significant variations in
operating results from quarter to quarter. The Company believes that quarter
to quarter comparisons of its financial results are not necessarily meaningful
and should not be relied upon as an indication of future performance. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" in the Annual Report.
Dependence Upon Key Personnel. The Company's success will depend in part
upon the retention of key senior management and technical personnel,
particularly Lew Jenkins, co-founder of the Company and Chairman of the Board.
The loss of the services of any of the Company's key personnel could have a
material adverse effect on the Company. Although the Company's employees are
required to sign confidentiality and invention assignment agreements and
certain senior management employees have entered into compensation and change-
in-control agreements with the Company, the employees of the Company are not
otherwise subject to employment agreements or non-competition agreements.
Further, the Company does not maintain key man life insurance on any of its
employees. The Company believes that its future success also depends upon its
ability to attract and retain additional highly skilled technical, professional
services, management and sales and marketing personnel. The market for these
individuals has historically been, and the Company expects that it will
continue to be, intensely competitive. The Company's inability to attract and
retain qualified employees could have a material adverse effect on the
Company's business.
Government Regulation. Other than the export control regulations
applicable to Templar, the Company's business and products are not currently
subject to direct regulation by any governmental entity. Federal legislation
has been proposed which would, if enacted into law, relax certain export
limitations currently in effect and could provide a legislative framework for
development of certain aspects of a public key infrastructure. There can be no
assurance that such legislation will be enacted in its current form, or at all,
and this area remains the subject of legislative and federal agency study. The
Company cannot predict the impact, if any, that future regulation or regulatory
changes may have on its business.
Because Templar incorporates RSA public key encryption technology, U.S.
export control regulations prohibit the export of the U.S. version of Templar.
The Company has, however, developed a version of Templar for export outside the
United States with more limited encryption functionality than the domestic
version. The export version of Templar falls within the parameters set by the
Commerce Department for exportable encryption technology because it uses
shorter cryptographic key algorithms which can be decrypted in a shorter period
of time than those used in the domestic version. Further, in order to be
validly exported, the export version of Templar must qualify for a general
license under Commerce Department regulations or a validated license must be
obtained for each specific export of the product. The Company has recently
determined that the export version of Templar qualifies for the general license
for "mass market software" made generally available to the public because the
<PAGE> 12
Company expects Templar to be sold from stock at retail points, without
restriction, by means of over-the-counter, mail order or telephone call
transactions and because Templar was designed for installation by the customer
without further substantial support by the supplier. There can be no assurance
that this general license will continue to be available for the export version
of Templar. Further, there can be no assurance that the limited version of
Templar designed for export will achieve international market acceptance. The
inability of the Company to export the limited version of Templar or such
version's failure to achieve market acceptance outside the United States could
have an adverse impact on the Company's ability to affect international sales
of Templar and domestic sales of Templar in connection with international
transactions. See "BUSINESS - International Sales" in the Annual Report.
International Sales. The Company's international sales relate primarily to
international royalties which accounted for approximately $1.2 million, $1.7
million and $2.6 million, respectively, or approximately 9%, 9% and 10% of the
Company's total revenues in 1993, 1994 and 1995, respectively. The Company
expects that international sales will continue to account for a comparable
portion of its total revenues in future periods and that approximately 80% of
such international revenues will continue to be attributable to one third party
reseller. International sales are subject to certain inherent risks, including
unexpected changes in regulatory requirements and tariffs, longer payment
cycles, increased difficulties in collecting accounts receivable and
potentially adverse tax consequences. Since a large portion of the Company's
international sales are denominated in foreign currencies, gains and losses on
the conversion to U.S. dollars of accounts receivable and accounts payable
arising from international operations may contribute to fluctuations in the
Company's results of operations. In addition, fluctuations in currency
exchange rates could cause the Company's products to become relatively more
expensive to end users in a particular country, leading to reduction in sales
in that country. In addition, sales in Europe and certain other parts of the
world typically are adversely affected in the third quarter of each year as
many customers and end-users reduce their business activities during the summer
months. These seasonal factors may eventually have an effect on the Company's
quarterly results of operations. Further, export control restrictions
applicable to the Company's Templar product may adversely affect the Company's
ability to market the Templar product outside the United States. See
"- Government Regulation."
Management of Growth. The Company has experienced a period of rapid growth
that has placed, and could continue to place, a significant strain on the
Company's financial, management and other resources. The Company may attempt
to hire additional key personnel in executive management positions in the
future. The Company's future performance will depend in part on its ability to
manage change in both its domestic and international operations and will
require the Company to hire additional management and technical personnel,
particularly in the marketing and customer support areas. In addition, the
Company's ability to manage its growth effectively will require it to continue
to improve its operational and financial control systems and infrastructure and
management information systems, and to attract, train, motivate, manage and
retain key employees. If the Company's management were to become unable to
manage growth effectively, the Company could be adversely affected.
Blank Check Preferred Stock; Anti-Takeover Provisions. The Company's Board
of Directors has the authority to issue up to 1,000,000 shares of preferred
stock and to determine the price, rights, preferences and privileges of those
shares without any further vote or action by the stockholders. The rights of
the holders of Common Stock will be subject to, and may be adversely affected
<PAGE> 13
by, the rights of the holders of any preferred stock that may be issued in the
future. The issuance of shares of preferred stock, while potentially providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock of the
Company. The Company has no present intention to issue shares of preferred
stock. In addition, the Company is subject to the anti-takeover provisions of
Section 203 of the Delaware General Corporation Law, which will prohibit it
from engaging in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved
in a prescribed manner. The application of Section 203 also could have the
effect of delaying or preventing a change-in-control of the Company.
Furthermore, certain provisions of the Company's Certificate of Incorporation
and Bylaws, including a provision that provides for the Board of Directors to
be divided into three classes to serve for staggered three-year terms, and
certain contractual provisions could limit the price that certain investors
might be willing to pay in the future for shares of the Common Stock and may
have the effect of delaying or preventing a change-in-control of the Company.
These provisions may also reduce the likelihood of an acquisition of the
Company at a premium price by another person or entity. In addition, certain
officers have the right to receive certain payments upon a change-in-control of
the Company. Such agreements could have the effect of delaying, deferring or
preventing a change-in-control of the Company by increasing the aggregate cost
to potential investors of an acquisition of the Company. See the description
of the Company's Common Stock contained in the Company's Registration Statement
on Form 8-A dated July 31, 1995, as amended, which is incorporated herein by
reference.
<PAGE> 14
SELLING SHAREHOLDERS
As the names of the persons who intend to resell Common Stock pursuant to
this Reoffer Prospectus are not known by the Company as of the date of this
Reoffer Prospectus, set forth below are the names of all persons currently
eligible to resell Common Stock pursuant to this Reoffer Prospectus and the
amounts of Common Stock available or which may become available to be resold by
such persons. The amounts of Common Stock covered by this Reoffer Prospectus
may be increased or decreased by filing one or more prospectus supplements
pursuant to Rule 424 of the Securities Act.
Name and Position With The Company Number of Shares of Common Stock
Which Are Available To Be Resold
- ------------------------------------- ----------------------------------------
Lew Jenkins 13,150
Chairman of the Board and Director
Daniel M. Federman 568,738
President, Chief Executive Officer
and Director
David Hildes 30,874
Vice Chairman, Secretary and Director
Theodore Wanderer 20,646
Director
William O. Studeman 5,260
Director
Francis R. Wagner 31,120
Director
Stephan J. Mallenbaum 28,534
Director
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Shareholders that they intend
to sell all or a portion of the Control Securities acquired by them pursuant to
the Program from time to time to purchasers directly or through underwriters,
dealers or agents, who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Shareholders and/or
purchasers of the shares of Common Stock for whom they act as agent (which
compensation may be in excess of customary commissions). The Selling
Shareholders will be responsible for payment of any and all commissions to
brokers, which will be negotiated on an individual basis. The Company will not
be responsible for the payment of any commissions to brokers. The Selling
Shareholders and anyone effecting sales on behalf of the Selling Shareholders
may be deemed to be "underwriters" within the meaning of the Securities Act of
<PAGE> 15
1933, as amended (the "Securities Act"), and commissions or discounts given may
be regarded as underwriting commissions or discounts under said Securities Act.
The Control Securities may be sold publicly through one or more
transactions on a national securities exchange, in the over-the-counter market
or through one or more private transactions. In addition, any Control
Securities which qualify for sale pursuant to Rule 144 of the Securities Act
may be sold under said Rule 144 rather than pursuant to this Reoffer
Prospectus. The Selling Shareholders will be subject to the applicable
provisions of the Exchange Act, and the rules and regulations thereunder,
including without limitation, Rules 10b-6 and 10b-7 of the Exchange Act, which
provisions may affect the timing of purchases and sales of shares of Control
Securities pursuant to this Reoffer Prospectus. There is no assurance that the
Selling Shareholders will sell any or all of the Control Securities described
herein and may transfer, devise or gift such shares by other means not
described herein.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Control
Securities by the Selling Shareholders.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. Section 145 of the Delaware General
Corporation Law ("DGCL") provides that a corporation may indemnify a director,
officer, employee or agent of the corporation and certain other persons serving
at the request of the corporation in related capacities against amounts paid
and expenses incurred in connection with an action or proceeding to which he or
she is threatened to be made a party by reason of such position, if such person
shall have acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe the conduct was
unlawful; provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
Article TENTH of the Company's Certificate of Incorporation provides that
each person who was or is made a party or is threatened to be made a party to
or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal representative,
is or was a director or officer, of the Company or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is an alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Company to the fullest extent authorized by the DGCL, as the same exists or
may thereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability and loss (including attorneys'
<PAGE> 16
fees) reasonably incurred or suffered by such person in connection therewith
and such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or
her heirs, executors, and administrators; provided, however, that, except in
certain circumstances, the Company shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Company. Article TENTH of the Company's Certificate
of Incorporation further provides that this right of indemnification is a
contract right and includes the right to be paid by the Company the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the DGCL requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Company of an undertaking,
by or on behalf of such director or officer, to repay all amounts so advanced
if it shall ultimately be determined that such director or officer is not
entitled to be indemnified under Article TENTH or otherwise.
Article TENTH of the Company's Certificate of Incorporation further
provides that any indemnification thereunder (unless ordered by a court) shall
be made by the Company only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (a) and (b) of Section 145 of the DGCL. Such
determination must be made (i) by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the stockholders.
Article TENTH of the Company's Certificate of Incorporation further provides
that the indemnification provided therein is not exclusive.
The Company has entered into a separate indemnification agreement with each
of its officers and directors which provides for mandatory indemnification
arrangements broader than that specifically provided by current Delaware law,
including the advancement of expenses incurred to defend actions brought
against him or her in his or her capacity as an officer, director or agent of
the Company.
Article NINTH of the Company's Certificate of Incorporation provides that
no director shall be liable personally to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided however,
that nothing in Article NINTH shall eliminate or limit the liability of a
director (i) for any breach of such director's duty of loyalty to the Company
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, or (iv) for any transaction from which such director
derived an improper personal benefit. Article NINTH further provides that the
modification or repeal thereof shall not affect the restriction thereunder of a
director's personal liability for any act or omission occurring prior to such
modification or repeal.
The Company maintains general liability insurance coverage for directors
and officers of the Company arising out of claims based on acts or omissions in
their capacity as directors or officers.
<PAGE> 17
Insofar as indemnification for liabilities arising under the Securities
Act, as amended, may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable. In the event that a claim for indemnification against
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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 Company 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.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1994 and the
consolidated statements of operations, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1995, incorporated
in this Prospectus by reference from the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The validity of the issuance of the shares of Common Stock registered on
Form S-8 (File No. 33-97114) has been passed upon by Bryan Cave LLP, and such
opinion is incorporated herein by reference. Stephen J. Mallenbaum, a director
of the Company, is a member of Bryan Cave LLP and owns options to purchase
28,534 shares of Common Stock.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents:
1. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996.
2. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
3. The Company's Registration Statement on Form 8-A dated July 31, 1995,
as amended, which contains a description of the Common Stock and certain rights
relating to the Common Stock, including any amendment or reports filed for the
purpose of updating such description.
4. All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Reoffer
Prospectus and prior to the filing of a post-effective amendment which
indicates that all of the securities offered hereby have been sold or which
deregisters all securities remaining unsold shall be deemed to be incorporated
by reference into this Reoffer Prospectus.
<PAGE> 18
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 8. Exhibits
4.3 - Premenos Technology Corp. Incentive Program **
5.1 - Opinion of Bryan Cave *
23.1 - Consent of Coopers & Lybrand L.L.P.
- Consent of Bryan Cave (included in Exhibit 5.1) *
- Power of Attorney (included in Signature Page) *
- ---------------
* Filed as an exhibit to the Registration Statement on Form S-8, File
No. 33-97114
** Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1996
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Post-Effective
Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Concord, State of California on May 15, 1996.
PREMENOS TECHNOLOGIES CORP.
By /s/ LEW JENKINS
-------------------------------------
Lew Jenkins, Chairman of the Board
Date: May 15, 1996
Pursuant to the requirements of the Securities Act, this Post-Effective
Amendment No. 1 has been signed by the following persons in the capacities and
on the dates indicated.
Signature Title Date
- ----------------------------- ---------------------------------- ------------
/s/ LEW JENKINS Chairman of the Board and Director May 15, 1996
- -----------------------------
Lew Jenkins
/s/ DANIEL M. FEDERMAN * President, Chief Executive Officer May 15, 1996
- ----------------------------- and Director
Daniel M. Federman
/s/ DAVID HILDES * Vice Chairman, Secretary and May 15, 1996
- ----------------------------- Director
David Hildes
/s/ H. WARD WOLFF * Vice President - Finance and May 15, 1996
- ----------------------------- Administration (Principal Financial
H. Ward Wolff and Accounting Officer)
/s/ FRANCIS R. WAGNER * Director May 15, 1996
- -----------------------------
Francis R. Wagner
/s/ STEPHAN J. MALLENBAUM * Director May 15, 1996
- -----------------------------
Stephan J. Mallenbaum
* BY: /s/ LEW JENKINS May 15, 1996
- --------------------------------
Lew Jenkins, as Attorney-in-Fact
<PAGE> 20
EXHIBITS
Exhibit Number Exhibit
- -------------- --------------------------------------------------------------
23.1 Consent of Coopers & Lybrand L.L.P.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to the Registration Statement of Premenos Technology Corp. on Form S-8
(File No. 33-97114) of our report dated January 30, 1996, except for Note 15,
as to which the date is February 6, 1996, on our audits of the consolidated
financial statements and the financial statement schedule of Premenos
Technology Corp. and subsidiaries as of December 31, 1995 and 1994, and for
the years ended December 31, 1995, 1994 and 1993, which report is included
in the Premenos Technology Corp. 1995 Annual Report on Form 10-K. We also
consent to the reference to our firm under the caption "Experts".
/S/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Oakland, California
May 15, 1996
