AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 2005
REGISTRATION NO. 333-122937
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ATTUNITY LTD
(Exact name of Registrant as specified in its charter)
ISRAEL NOT APPLICABLE
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ATTUNITY LTD
EINSTEIN BUILDING, TIRAT CARMEL, HAIFA 39101, ISRAEL
TEL. (972)(4) 855-9660
(Address and telephone number of Registrant's principal executive offices)
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ATTUNITY INC.
ATTN.: OFER SEGEV, CHIEF FINANCIAL OFFICER
40 AUDUBON ROAD
WAKEFIELD, MASSACHUSETTS 01880
TEL. (781) 213-5200
(Name, address and telephone number of agent for service)
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COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO
AGENT FOR SERVICE, SHOULD BE SENT TO:
ODED ERAN, ADV. STEVEN J. GLUSBAND, ESQ.
GOLDFARB, LEVY, ERAN & CO. CARTER LEDYARD & MILBURN LLP
EUROPE-ISRAEL TOWER 2 WALL STREET
2 WEIZMANN STREET NEW YORK, NY 10005
TEL AVIV 64239, ISRAEL TEL: 212-238-8605
TEL: (+972 3) 608-9999 FAX: 212-732-3232
FAX: (+972 3) 608-9908
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being 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 436,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
Proposed
Title of each class of maximum Proposed Amount of
securities Amount to be aggregate price maximum aggregate registration
to be registered registered(1) per share offering price fee (2)
---------------- ------------- --------- -------------- -------
Ordinary shares, par value NIS
0.1 per share 1,018,182 $2.85 (3) $2,901,818.70 (3) $341.54 (3)
Ordinary shares, par value NIS
0.1 per share 120,000 $2.225 (4) $ 267,000 (4) $ 31.43 (4)
Total 1,138,182 N/A $3,168,818.70 $372.97
(1) The Registration Statement also includes an indeterminate number of the
Registrant's ordinary shares that may become offered, issuable or sold to
prevent dilution resulting from stock splits, stock dividends and similar
transactions, which are included pursuant to Rule 416 under the Securities Act
of 1933, as amended.
(2) Calculated pursuant to Section 6(b) of the Securities Act of 1933 as
follows: proposed maximum aggregate offering price multiplied by 0.0001177.
(3) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the Securities Act of
1933, on the basis of the average of the high and the low prices ($2.90 and
$2.80, respectively) of the Registrant's ordinary shares as quoted on the NASDAQ
National Market on February 18, 2005. This fee was paid with the original filing
of the Registration Statement on February 22, 2005.
(4) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the Securities Act of
1933, on the basis of the average of the high and the low prices $2.32 and
$2.13, respectively) of the Registrant's ordinary shares as quoted on the NASDAQ
National Market on September 14, 2005. This additional fee is being paid with
this Amendment No. 2 to the Registration Statement.
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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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
ii
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER __, 2005
PROSPECTUS
ATTUNITY LTD
1,138,182 ORDINARY SHARES
This prospectus relates to up to 1,138,182 ordinary shares that the selling
shareholders named in this prospectus or their transferees may offer from time
to time. Of the ordinary shares offered hereby, 727,273 ordinary shares were
issued and 290,909 ordinary shares are issuable upon exercise of warrants that
were issued to the selling shareholders, pursuant to a securities purchase
agreement dated January 24, 2005, and up to 120,000 ordinary shares may be
issued to the selling shareholders in payment of liquidated damages resulting
from our failure to timely register the foregoing ordinary shares for
disposition by the selling shareholders, as required under a registration rights
agreement that we entered into with the selling shareholders. We are registering
the ordinary shares for disposition by the selling shareholders pursuant to our
commitment to them. The registration of the ordinary shares does not necessarily
mean that the selling shareholders or their transferees will offer or sell their
ordinary shares.
Attunity Ltd will not receive any additional proceeds from the sale by the
selling shareholders of the ordinary shares offered by this prospectus, and will
bear all expenses in connection with the preparation of this prospectus.
The ordinary shares of Attunity Ltd are traded on the NASDAQ National
Market under the symbol "ATTU." On September 16, 2005, the closing price of an
ordinary share of Attunity Ltd on the NASDAQ National Market was $2.32.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE BUYING THE ORDINARY SHARES OF ATTUNITY LTD.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated , 2005
TABLE OF CONTENTS
PAGE
----
Notice Regarding Forward-Looking Statements 2
Prospectus Summary 4
Risk Factors 5
Capitalization and Indebtedness 16
Reasons for the Offer and Use of Proceeds 16
Market Price Data 16
Selling Shareholders 17
Offer Statistics, Expected Time Table and Plan of Distribution 19
Expenses Associated with the Registration 20
Foreign Exchange Controls and Other Limitations 21
Experts 21
Legal Matters 21
Matterial Changes 21
Where You Can Best Find More Information; Incorporation of
Certain Information by Reference 22
Enforceability of Civil Liabilities 23
In this prospectus, "we", "us", "our", the "Company" and "Attunity" refer
to Attunity Ltd, an Israeli company Attunity Ltd and its subsidiaries, unless
otherwise indicated.
We are a "foreign private issuer" as defined in Rule 3b-4 under the
Securities Exchange Act of 1934, or the Exchange Act. As a result, our proxy
solicitations are not subject to the disclosure and procedural requirements of
Regulation 14A under the Exchange Act and transactions in our equity securities
by our officers and directors are exempt from Section 16 of the Exchange Act. In
addition, we are not required under the Exchange Act to file periodic reports
and financial statements as frequently or as promptly as U.S. companies whose
securities are registered under the Exchange Act.
We publish annually an annual report on our website containing financial
statements that have been examined and reported on, with an opinion expressed
by, a qualified independent auditor or certified public accountant. We prepare
our financial statements in United States dollars and in accordance with
accounting principles generally accepted in the United States. All references to
"dollars" or "$" in this prospectus are to U.S. dollars, and all references to
"shekels" or "NIS" are to New Israeli Shekels.
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in it by reference contain
forward-looking statements which involve known and unknown risks and
uncertainties. We include this notice for the express purpose of permitting us
to obtain 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: projections of
capital expenditures, competitive pressures, revenues, growth prospects, product
development, financial resources and other financial matters. You can identify
these and other forward-looking statements by the use of words such as "may,"
"will," "should," "plans," "anticipates," "believes," "estimates," "predicts,"
"intends," "potential" or the negative of such terms, or other comparable
terminology.
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Our ability to predict the results of our operations or the effects of
various events on our operating results is inherently uncertain. Therefore, we
caution you to consider carefully the matters described under the caption "Risk
Factors" and certain other matters discussed in this prospectus, the documents
incorporated by reference in this prospectus, and other publicly available
sources. Such factors and many other factors beyond the control of our
management could cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by the forward-looking statements.
3
PROSPECTUS SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION ABOUT US, THE ORDINARY SHARES THAT MAY BE SOLD FROM TIME TO TIME,
AND OUR FINANCIAL STATEMENTS AND THE NOTES TO THEM, ALL OF WHICH APPEAR
ELSEWHERE IN THIS PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE IN
THIS PROSPECTUS.
ATTUNITY LTD
We were incorporated under the laws of the State of Israel in 1988. We
develop, market and support standards-based integration middleware for accessing
mainframe, enterprise data sources and legacy applications.
Our principal executive offices are located at Einstein Building, Tirat
Carmel, Haifa 39101, Israel, and our telephone number is (+972) 4-855-9666. Our
address on the Internet is http://www.attunity.com. INFORMATION CONTAINED ON OUR
WEBSITE DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS.
THE OFFERING
Ordinary shares offered........... 1,138,182 shares (including 290,909 shares
issuable upon exercise of warrants).
NASDAQ National Market symbol..... "ATTU"
Use of proceeds................... We will not receive any proceeds from the
sale of the ordinary shares offered hereby.
We will, however, receive the proceeds from
the exercise of the warrants if and when
they are exercised, which we will use for
working capital and general corporate
purposes.
Ordinary shares outstanding....... 17,129,759 shares.
Risk Factors...................... Prospective investors should carefully
consider the "Risk Factors" beginning on
page 5 before buying the ordinary shares
offered hereby.
4
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW
BEFORE INVESTING IN OUR ORDINARY SHARES. OUR BUSINESS, PROSPECTS, FINANCIAL
CONDITION AND RESULTS OF OPERATIONS COULD BE ADVERSELY AFFECTED DUE TO ANY OF
THE FOLLOWING RISKS. IN THAT CASE, THE VALUE OF OUR ORDINARY SHARES COULD
DECLINE, AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.
RISK FACTORS RELATING TO OUR COMPANY
WE HAVE A HISTORY OF OPERATING LOSSES AND MAY NOT ACHIEVE OR SUSTAIN
PROFITABILITY IN THE FUTURE.
We reported operating losses of $877,000 for the six months period ended
June 30, 2005 and $4.04 million for the year ended December 31, 2004, and
incurred operating losses in four of the five preceding years. We can not assure
you that we will be able to achieve or sustain profitable operations in the
future.
OUR OPERATING RESULTS FLUCTUATE SIGNIFICANTLY.
Our quarterly results have fluctuated significantly in the past and are
likely to fluctuate significantly in the future. Our future operating results
will depend on many factors, including, but not limited to, the following:
o the size and timing of significant orders and their fulfillment;
o demand for our products;
o changes in our pricing policies or those of our competitors;
o the number, timing and significance of product enhancements;
o new product announcements by us and our competitors;
o our ability to successfully market newly acquired products and
technologies;
o our ability to develop, introduce and market new and enhanced products
on a timely basis;
o changes in the level of our operating expenses;
o budgeting cycles of our customers;
o customer order deferrals in anticipation of enhancements or new
products that we or our competitors offer;
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o product life cycles;
o software bugs and other product quality problems;
o personnel changes;
o changes in our strategy;
o seasonal trends and general domestic and international economic and
political conditions, among others;
o currency exchange rate fluctuations and economic conditions in the
geographic areas where we operate; and
o the assurance of success in marketing new products or technologies.
Due to the foregoing factors, quarterly revenues and operating results are
difficult to forecast, and it is likely that our future operating results will
be adversely affected by these or other factors.
Revenues are also difficult to forecast because our sales cycle, from
initial evaluation to purchase, is lengthy and varies substantially from
customer to customer. We typically ship product orders shortly after receipt
and, consequently, order backlog at the beginning of any quarter has in the past
represented only a small portion of that quarter's revenues. As a result,
license revenues in any quarter depend substantially on orders booked and
shipped in that quarter.
Due to all of the foregoing, we cannot predict revenues for any future
quarter with any significant degree of accuracy. Accordingly, we believe that
period-to-period comparisons of our operating results are not necessarily
meaningful and you should not rely upon them as indications of future
performance. Although we have experienced revenue growth in the past, we may not
be able to sustain this growth rate, and you should not consider such past
growth indicative of future revenue growth, or of future operating results.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL IN THE FUTURE, WHICH MAY NOT BE
AVAILABLE TO US.
Our working capital requirements and the cash flow provided by our
operating activities are likely to vary greatly from quarter to quarter,
depending on the timing of orders and deliveries, and the payment terms offered
to our customers. We may need to raise additional funds in the future for a
number of uses, including:
o implementing marketing and sales activities for our products and
services;
o expanding research and development programs;
o expanding investment in fixed assets; and
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o hiring additional qualified personnel.
We may not be able to obtain additional funds on acceptable terms or at
all. If we cannot raise needed funds on acceptable terms, we may be required to
delay, scale back or eliminate some aspects of our operations and we may not be
able to:
o develop new products;
o enhance our existing products;
o remain current with evolving industry standards;
o take advantage of future opportunities; or
o respond to competitive pressures or unanticipated requirements.
Any equity or debt financings, if available at all, may cause dilution to
our then-existing shareholders. If additional funds are raised through the
issuance of equity securities, the net tangible book value per share of our
ordinary shares would decrease and the percentage ownership of then current
shareholders would be diluted.
OUR OPERATING RESULTS VARY QUARTERLY AND SEASONALLY.
We have often recognized a substantial portion of our revenues in the last
quarter of the year and in the last month, or even weeks or days, of a quarter.
Our expense levels are substantially based on our expectations for future
revenues and are therefore relatively fixed in the short term. If revenue levels
fall below expectations, our quarterly results are likely to be
disproportionately adversely affected because a proportionately smaller amount
of our expenses varies with our revenues.
Our operating results reflect seasonal trends and we expect to continue to
be affected by such trends in the future. We expect to continue to experience
relatively higher sales in the first and second quarters of the year and
relatively lower sales in the third quarter ending September 30, as a result of
reduced sales activity in Europe during the summer months. Due to the foregoing
factors, in some future quarter our operating results may be below the
expectations of public market analysts and investors. In such event, it is
likely that the price of our ordinary shares would be materially adversely
affected.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS.
We are based in Israel and generate a large percentage of our sales outside
the United States. Our sales in the United States accounted for 40.2%, 39.3%,
35.9% and 53.6% of our total revenues for the years ended December 31, 2002,
2003, 2004 and the six months ended June 30, 2005, respectively. Although we
continue to expand our international operations and commit significant
management time and financial resources to developing direct and indirect
international sales and support channels, we cannot be certain that we will be
able to maintain or increase international market demand for our products. To
the extent that we cannot do so in a timely manner, our business, operating
results and financial condition will be adversely affected.
7
International operations are subject to inherent risks, including the
following:
o the impact of possible recessionary environments in multiple foreign
markets;
o longer receivables collection periods and greater difficulty in
accounts receivable collection;
o unexpected changes in regulatory requirements;
o difficulties and costs of staffing and managing foreign operations;
o reduced protection for intellectual property rights in some countries;
o potentially adverse tax consequences; and
o political and economic instability.
We cannot be certain that we, our distributors or our resellers will be
able to sustain or increase revenues from international operations or that the
foregoing factors will not have a material adverse effect on our future revenues
and, as a result, our business, operating results and financial condition.
We may be adversely affected by fluctuations in currency exchange rates.
While our revenues are generally denominated in United States dollars, the Euro
and British Pound, a significant portion of our expenses are incurred in NIS. If
we were to determine that it was in our best interests to enter into any hedging
transactions in the future, there can be no assurance that we will be able to so
do or that such transactions, if entered into, will materially reduce the effect
of fluctuations in foreign currency exchange rates on our results of operations.
In addition, if for any reason exchange or price controls or other restrictions
on the conversion of foreign currencies into NIS were imposed, our business
could be adversely affected. Although exposure to currency fluctuations to date
has not had a material adverse effect on our business there can be no assurance
such fluctuations in the future will not have a material adverse effect on
revenues from international sales and, consequently our business, operating
results and financial condition.
WE ARE SUBJECT TO RISKS RELATING TO PROPRIETARY RIGHTS AND RISKS OF
INFRINGEMENT.
We are dependent upon our proprietary software technology and we rely
primarily on a combination of copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect our proprietary
rights. Except for our trademark registrations for Attunity(R), Attunity B2B(R)
and Attunity Connect(R) in the United States, we do not have any trademark,
patent or copyright registrations. To protect our software, documentation and
other written materials, we rely on trade secret and copyright laws, which
afford only limited protection. It is possible that others will develop
technologies that are similar or superior to our technology. Despite our efforts
to protect our proprietary rights, unauthorized parties may attempt to copy
aspects of our products or to obtain and use information that we regard as
proprietary. It is difficult to police the unauthorized use of products in our
field, and we expect software piracy to be a persistent problem, although we are
unable to determine the extent to which piracy of our software products exists.
In addition, the laws of some foreign countries do not protect our proprietary
rights as fully as do the laws of the United States. We cannot be certain that
our means of protecting our proprietary rights in the United States or abroad
will be adequate or that our competition will not independently develop similar
technology.
8
We are not aware that we have infringed any proprietary rights of third
parties. It is possible, however, that third parties will claim that we have
infringed upon their intellectual property rights. We believe that software
product developers will increasingly be subject to infringement claims as the
number of products and competitors in our industry segment grows and the
functionality of products in different industry segments overlaps. It would be
time consuming for us to defend any such claims, with or without merit, and any
such claims could:
o result in costly litigation;
o divert management's attention and resources;
o cause product shipment delays; or
o require us to enter into royalty or licensing agreements. Such royalty
or licensing agreements, if required, may not be available on terms
acceptable to us, if at all.
If there is a successful claim of infringement against us and we are not
able to license the infringed or similar technology or other intellectual
property, our business, operating results and financial condition would be
materially adversely affected.
A SIGNIFICANT PORTION OF OUR REVENUES ARE DEPENDENT ON MAINTENANCE PAYMENTS FROM
CUSTOMERS USING LEGACY CORVISION AND MANCAL 2000 SOFTWARE.
Approximately 16% of our revenues are derived from annual maintenance
payments made by customers who use CorVision, Mancal 2000 and APTuser, which are
legacy software products. In 2002, 2003, 2004 and the six months ended June 30,
2005, these revenues on a consolidated basis totaled $3.0 million, $2.8 million,
$2.7 million and $1.3 million, respectively. Some of these customers may replace
these legacy products with more state-of-the-art products from other vendors
and, as a result, discontinue use of these products. This would result in a
reduction in our maintenance revenues and adversely affect our operating
results.
9
OUR PRODUCTS HAVE A LENGTHY SALES CYCLE.
Our customers typically use our products to deploy applications that are
critical to their business. As a result, the licensing and implementation of our
products generally involves a significant commitment of attention and resources
by prospective customers. Because of the long approval process that typically
accompanies strategic initiatives or capital expenditures by companies, our
sales process is often delayed, with little or no control over any delays
encountered by us. Our sales cycle can be further extended for sales made
through third party distributors. Delay in the sales cycle of our products could
result in significant fluctuations in our quarterly operating results.
RAPID TECHNOLOGICAL CHANGE MAY ADVERSELY AFFECT THE MARKET ACCEPTANCE OF OUR
PRODUCTS AND SERVICES.
We compete in a market that is characterized by rapid technological change.
The introduction of new technologies could render existing products and services
obsolete and unmarketable and could exert price pressures on our products and
services. Any future success will depend upon our ability to address the
increasingly sophisticated needs of our customers by:
o supporting existing and emerging hardware, software, databases and
networking platforms; and
o developing and introducing new and enhanced applications that keep
pace with such technological developments, emerging new markets and
changing customer requirements.
OUR PRODUCTS MAY CONTAIN DEFECTS THAT MAY BE COSTLY TO CORRECT, DELAY MARKET
ACCEPTANCE OF OUR PRODUCTS AND EXPOSE US TO LITIGATION.
Despite testing by us, errors may be found in our software products. If
defects are discovered, we may not be able to successfully correct them in a
timely manner or at all. Defects and failures in our products could result in a
loss of, or delay in, market acceptance of our products and could damage our
reputation. Although our standard license agreement with our customers contains
provisions designed to limit our exposure to potential product liability claims,
it is possible that these provisions may not be effective or enforceable under
the laws of some jurisdictions, and we could fail to realize revenues and suffer
damage to our reputation as a result of, or in defense of, a substantial claim.
We currently do not carry product liability insurance for our products.
THE LOSS OF THE SERVICES OF OUR KEY PERSONNEL WOULD NEGATIVELY AFFECT OUR
BUSINESS.
Our future success depends to a large extent on the continued services of
our senior management and key personnel. In particular, we are dependent on the
services of a small number of key executives. Any loss of the services of
members of our senior management or other key personnel, particularly to a
competitor, would negatively affect our business.
10
OUR RESULTS MAY BE ADVERSELY AFFECTED BY COMPETITION.
The market for our software products is fragmented and is intensely
competitive. Competition in the industry is generally based on product
performance, depth of product line, technical support and price. We compete both
with international and local software providers, many of whom have significantly
greater financial, technical and marketing resources than us. We anticipate
continued growth and competition in the software products market and,
consequently, the entrance of new competitors into the market. Our existing and
potential competitors may be able to develop software products and services that
are as effective as, or more effective or easier to use than those offered by
us. Such existing and potential competitors may also enjoy substantial
advantages over us in terms of research and development expertise, manufacturing
efficiency, name recognition, sales and marketing expertise and distribution
channels. There can be no assurance that we will be able to compete successfully
against current or future competitors or that competition will not have a
material adverse effect on our future revenues and, consequently, on our
business, operating results and financial condition.
WE DO NOT INTEND TO PAY CASH DIVIDENDS.
Our policy is to retain earnings for use in our business and, for this
reason, we do not intend to pay cash dividends on the ordinary shares in the
foreseeable future.
RISK FACTORS RELATING TO OUR ORDINARY SHARES
OUR SHARE PRICE HAS BEEN VOLATILE IN THE PAST AND MAY DECLINE IN THE FUTURE.
Our ordinary shares have experienced significant market price and volume
fluctuations in the past and may experience significant market price and volume
fluctuations in the future in response to factors such as the following, some of
which are beyond our control:
o quarterly variations in our operating results;
o operating results that vary from the expectations of securities
analysts and investors;
o changes in expectations as to our future financial performance,
including financial estimates by securities analysts and investors;
o announcements of technological innovations or new products by us or
our competitors;
o announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;
o changes in the status of our intellectual property rights;
11
o announcements by third parties of significant claims or proceedings
against us;
o additions or departures of key personnel;
o future sales of our ordinary shares; and
o stock market price and volume fluctuations.
Domestic and international stock markets often experience extreme price and
volume fluctuations. Market fluctuations, as well as general political and
economic conditions, such as a recession or interest rate or currency rate
fluctuations or political events or hostilities in or surrounding Israel, could
adversely affect the market price of our ordinary shares.
In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and divert management's attention
and resources.
ISSUANCE OF A SIGNIFICANT AMOUNT OF ADDITIONAL ORDINARY SHARES ON ACCOUNT OF
OUTSTANDING WARRANTS AND CONVERTIBLE NOTES WILL DILUTE OUR CURRENT SHAREHOLDERS
AND SUBSTANTIAL FUTURE SALES OF OUR ORDINARY SHARES MAY DEPRESS OUR SHARE PRICE.
As of September 15, 2005, we had 17,129,759 ordinary shares issued and
outstanding and approximately 8.55 million additional ordinary shares are
issuable upon exercise of outstanding options and warrants and the conversion of
convertible notes. This includes 1,018,182 ordinary shares (290,909 of which are
issuable upon the exercise of outstanding warrants) that were issued to
investors in a private placement that we completed in January 2005, and up to an
additional 120,000 ordinary shares may be issued to such investors in payment of
liquidated damages resulting from our failure to timely register the foregoing
ordinary shares for disposition by the investors, as required under a
registration rights agreement that we and the investors entered into in
connection with the private placement. The issuance of a significant amount of
additional ordinary shares on account of the outstanding warrants, convertible
notes and in payment of the foregoing liquidated damages will dilute our current
shareholders and may depress our share price. In addition, if our shareholders,
and in particular the investors in the January 2005 private placement, sell
substantial amounts of our ordinary shares, including shares issuable upon the
exercise of outstanding warrants, convertible notes or employee options, or if
the perception exists that our shareholders may sell a substantial number of our
ordinary shares, the market price of our ordinary shares may fall. Any
substantial sales of our shares in the public market might also make it more
difficult for us to sell equity or equity related securities in the future at a
time and on terms we deem appropriate.
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RISK FACTORS RELATING TO OUR OPERATIONS IN ISRAEL
CONDUCTING BUSINESS IN ISRAEL ENTAILS SPECIAL RISKS.
We are incorporated under the laws of, and our executive offices and
research and development facilities are located in, the State of Israel.
Although most of our sales are made to customers outside Israel, we are directly
influenced by the political, economic and military conditions affecting Israel.
Specifically, we could be adversely affected by any major hostilities involving
Israel, a full or partial mobilization of the reserve forces of the Israeli
army, the interruption or curtailment of trade between Israel and its present
trading partners, or a significant downturn in the economic or financial
condition of Israel.
Since the establishment of the State of Israel in 1948, a number of armed
conflicts have taken place between Israel and its Arab neighbors, and a state of
hostility, varying from time to time in intensity and degree, has led to
security and economic problems for Israel. Since September 2000, there has been
a marked increase in violence, civil unrest and hostility, including armed
clashes, between the State of Israel and the Palestinians, and acts of terror
have been committed inside Israel and against Israeli targets in the West Bank
and Gaza. These developments have adversely affected the regional peace process,
placed the Israeli economy under significant stress, and have negatively
influenced Israel's relationship with several Arab countries. In August 2005,
Israel evacuated all Israeli settlements in the Gaza Strip and four settlements
in the West Bank. The implications of this action cannot at this time be
foreseen. Any future armed conflict, political instability or violence in the
region may have a negative effect on our business condition, harm our results of
operations and adversely affect our share price.
Furthermore, there are a number of countries that restrict business with
Israel or Israeli companies. Restrictive laws or policies of those countries
directed towards Israel or Israeli businesses had, and may in the future
continue to have, an adverse impact on our operations, our financial results or
the expansion of our business. No predictions can be made as to whether or when
a final resolution of the area's problems will be achieved or the nature thereof
and to what extent the situation will impact Israel's economic development or
our operations.
OUR RESULTS OF OPERATIONS MAY BE NEGATIVELY AFFECTED BY THE OBLIGATION OF OUR
PERSONNEL TO PERFORM MILITARY SERVICE.
Many of our executive officers and employees in Israel are obligated to
perform up to 36 days, depending on rank and position, of military reserve duty
annually and are subject to being called for active duty under emergency
circumstances. If a military conflict or war arises, these individuals could be
required to serve in the military for extended periods of time. Our operations
could be disrupted by the absence for a significant period of one or more of our
executive officers or key employees or a significant number of other employees
due to military service. Any disruption in our operations could adversely affect
our business.
13
OUR FINANCIAL RESULTS MAY BE ADVERSELY AFFECTED BY INFLATION AND CURRENCY
FLUCTUATIONS.
Since we report our financial results in dollars, fluctuations in rates of
exchange between the dollar and non-dollar currencies may have a material
adverse affect on our results of operations. A portion of our expenses are paid
in NIS (primarily salaries) and are influenced by the timing of, and the extent
to which, any increase in the rate of inflation in Israel over the rate of
inflation in the United States is not offset by the devaluation of the NIS in
relation to the dollar. We believe that the rate of inflation in Israel has not
had a material adverse effect on our business to date However, our dollar costs
in Israel will increase if inflation in Israel exceeds the devaluation of the
NIS against the dollar or if the timing of such devaluation lags behind
inflation in Israel. Over time, the NIS has been devalued against the dollar,
generally reflecting inflation rate differentials. Likewise, our operations
could be adversely affected if we are unable to guard against currency
fluctuations in the future. We do not currently engage in any currency hedging
transactions intended to reduce the effect of fluctuations in foreign currency
exchange rates on our results of operations. We cannot guarantee that we will
enter into such transactions in the future or that such measures will adequately
protect us from serious harm due to the impact of inflation in Israel.
WE CANNOT GUARANTEE CONTINUATION OF GOVERNMENT PROGRAMS AND TAX BENEFITS.
We have in the past received certain Israeli government grants and
currently enjoy certain tax benefits in Israel. To remain eligible for these
grants and tax benefits, we must continue to meet certain conditions, including
making some specified investments in fixed assets. If we fail to comply with
these conditions in the future, the benefits we receive could be canceled and we
may have to refund payments previously received under these programs (with
interest and linkage differentials) or pay certain taxes. We cannot guarantee
that these programs and tax benefits will be continued in the future, at their
current levels or at all. If these programs and tax benefits are ended, our
business, financial condition and results of operations could be negatively
affected.
SERVICE AND ENFORCEMENT OF LEGAL PROCESS ON US AND OUR DIRECTORS AND OFFICERS
MAY BE DIFFICULT TO OBTAIN.
Service of process upon our directors and officers and the Israeli experts
named herein, many of whom reside outside the United States, may be difficult to
obtain within the United States. Furthermore, since a substantial portion of our
assets, almost all of our directors, some of the officers and the Israeli
experts named in this annual report are located outside the United States, any
judgment obtained in the United States against us or these individuals or
entities may not be collectible within the United States.
There is doubt as to the enforceability of civil liabilities under the
Securities Act and the Securities Exchange Act in original actions instituted in
Israel. However, subject to certain time limitations and other conditions,
Israeli courts may enforce final judgments of U.S. courts for liquidated amounts
in civil matters, including judgments based upon the civil liability provisions
of those Acts.
14
PROVISIONS OF ISRAELI LAW MAY DELAY, PREVENT OR MAKE DIFFICULT AN ACQUISITION OF
US, WHICH COULD DEPRESS THE PRICE OF OUR SHARES.
Provisions of Israeli corporate and tax law may have the effect of
delaying, preventing or making more difficult a merger with, or other
acquisition of, us. This could cause our ordinary shares to trade at prices
below the price for which third parties might be willing to pay to gain control
of us. Third parties who are otherwise willing to pay a premium over prevailing
market prices to gain control of us may be unable or unwilling to do so because
of these provisions of Israeli law.
CAPITALIZATION AND INDEBTEDNESS
The table below sets forth the capitalization of our company as of June 30,
2005.
June 30, 2005
--------
Actual
--------
(in thousands)
Long-term debt .................................... $ 487
Total shareholders' equity ........................ $11,493
-------
REASONS FOR THE OFFER AND USE OF PROCEEDS
This prospectus relates to the disposition of up to 1,138,182 of our
ordinary shares, of which 727,273 ordinary shares are outstanding, 290,909
ordinary shares are issuable upon exercise of warrants and up to 120,000
ordinary shares may be issued to the selling shareholders in payment of
liquidated damages resulting from our failure to timely register the foregoing
ordinary shares for disposition by the selling shareholders, as required under a
registration rights agreement that we entered into with the selling
shareholders. We will not receive any of the proceeds from the sale by the
selling shareholders of our ordinary shares. We will, however, receive the
proceeds from the exercise of the warrants if and when they are exercised.
MARKET PRICE DATA
Our ordinary shares have traded on the NASDAQ National Market since our
initial public offering on December 17, 1992.
QUARTERLY STOCK INFORMATION
The following table sets forth, for each of the full financial quarters in
the years indicated, the high ask and low bid prices of our ordinary shares, as
quoted on the NASDAQ National Market.
15
HIGH LOW
-------- --------
2003
First Quarter ...................... $ 1.05 $ 0.80
Second Quarter ..................... $ 1.59 $ 0.90
Third Quarter ...................... $ 1.48 $ 1.00
Fourth Quarter ..................... $ 2.22 $ 1.05
2004
First Quarter ...................... $ 3.62 $ 2.08
Second Quarter ..................... $ 3.36 $ 2.30
Third Quarter ...................... $ 2.90 $ 1.96
Fourth Quarter ..................... $ 2.80 $ 2.15
2005
First Quarter ...................... $ 3.49 $ 2.41
Second Quarter ..................... $ 3.08 $ 2.28
Third Quarter (through September 16) $ 2.85 $ 2.05
MONTHLY STOCK INFORMATION
The following table sets forth, for each of the most recent six months, the
high ask and low bid prices of our ordinary shares, as quoted on the NASDAQ
National Market.
MONTH HIGH LOW
----- -------- --------
March 2005 ......................... $ 3.49 $ 2.77
April 2005 ......................... $ 3.08 $ 2.72
May 2005 ........................... $ 2.89 $ 2.50
June 2005 .......................... $ 2.70 $ 2.28
July 2005 .......................... $ 2.85 $ 2.15
August 2005 ........................ $ 2.49 $ 2.05
SELLING SHAREHOLDERS
The registration statement of which this prospectus forms a part covers up
to 1,138,182 ordinary shares. On January 24, 2005 we entered into a securities
purchase agreement with certain funds affiliated with Weiss, Peck & Greer,
pursuant to which such funds purchased an aggregate of 727,273 of our ordinary
shares for $2.0 million. In addition, these funds acquired warrants to purchase
an aggregate of 290,909 ordinary shares having an exercise price of $2.75 per
share, and exercisable until January 23, 2008, with a call provision that allows
us to call the exercise of the warrants if the closing price of the ordinary
shares exceeds $4.70 for twenty (20) consecutive trading days. We undertook to
file a registration statement with the Securities and Exchange Commission, or
the SEC, to register the resale of the ordinary shares issued to such funds and
the ordinary shares issuable upon exercise of the warrants and to maintain a
registration statement in effect in order to allow the funds to freely sell
these shares. Up to an additional 120,000 ordinary shares may be issued to such
funds in payment of liquidated damages resulting from our failure to timely
register the ordinary shares issued and ordinary shares issuable upon exercise
of the warrants for disposition by the selling shareholders from time to time,
as required under a registration rights agreement that we entered into with such
funds. The ordinary shares and the warrants were issued to the funds in reliance
upon the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended, or the Securities Act, including the
provisions of Regulation D promulgated thereunder.
16
We are registering the ordinary shares in order to permit the selling
shareholders to dispose of the shares from time to time.
The following table lists the selling shareholders and other information
regarding the beneficial ownership of the ordinary shares by each of the selling
shareholders. The second and third columns list the number and percentage of
ordinary shares beneficially owned by each selling shareholder, based on each
selling shareholder's ownership of ordinary shares, the promissory notes and
warrants as of September 15, 2005, assuming full conversion of the promissory
notes and full exercise of the warrants held by each selling shareholder on that
date, without regard to any limitations on exercise.
The fourth column lists the number of ordinary shares being offered by this
prospectus by each of the selling shareholders.
The fifth and sixth columns of the following table assume the sale of all
of the ordinary shares offered by the selling shareholders pursuant to this
prospectus. The selling shareholders may sell all, some or none of their
ordinary shares in this offering.
PERCENTAGE OF
NUMBER OF PERCENTAGE OF MAXIMUM NUMBER OF NUMBER OF ORDINARY
ORDINARY SHARES ORDINARY SHARES ORDINARY SHARES ORDINARY SHARES SHARES
BENEFICIALLY OWNED BENEFICIALLY OFFERED PURSUANT BENEFICIALLY BENEFICIALLY
NAME OF SELLING PRIOR TO OWNED PRIOR TO TO THIS OWNED AFTER OWNED AFTER
SHAREHOLDER OFFERING OFFERING PROSPECTUS OFFERING OFFERING
----------- -------- -------- ---------- -------- --------
WPG Select Technology QP
Fund, L.P. ........... 401,481 (1) 2.4% 401,481 0 0%
WPG Select Technology
Overseas, L.P. ....... 237,340 (2) 1.4% 237,340 0 0%
WPG Software Fund, L.P.. 419,244 (3) 2.5% 419,244 0 0%
WPG Select Technology
Fund, L.P. ........... 80,117 (4) 0.5% 80,117 0 0%
----------
(1) Includes 102,615 ordinary shares issuable upon exercise of currently
exercisable Warrants and up to 42,329 ordinary shares issuable in payment
of liquidated damages resulting from our failure to timely register the
ordinary shares for disposition by the selling shareholder. Weiss, Peck &
Greer Investments a division of Robeco USA, LLC, is the sole Managing
Member of WPG-Software Fund Manager, LLC, the General Partner of WPG Select
Technology QP Fund, L.P. Mr. Ben Taylor and Mr. Daniel Vandivort exercise
sole voting and dispositive powers with respect to both the shares held and
the shares issuable under the warrants held by WPG Select Technology QP
Fund, L.P.
17
(2) Includes 60,662 ordinary shares issuable upon exercise of currently
exercisable Warrants up to 25,023 ordinary shares issuable in payment of
liquidated damages resulting from our failure to timely register the
ordinary shares for disposition by the selling shareholder. Weiss, Peck &
Greer Investments, a division of Robeco USA, LLC, is the sole Managing
Member of WPG-Software Fund Manager, LLC, the Supervisory General Partner
of WPG Select Technology Overseas, L.P. Mr. Ben Taylor and Mr. Daniel
Vandivort exercise sole voting and dispositive powers with respect to both
the shares held and the shares issuable under the warrants held by WPG
Select Technology Overseas.
(3) Includes 107,155 ordinary shares issuable upon exercise of currently
exercisable Warrants up to 44,201 ordinary shares issuable in payment of
liquidated damages resulting from our failure to timely register the
ordinary shares for disposition by the selling shareholder. Weiss, Peck &
Greer Investments, a division of Robeco USA, LLC, is the sole Managing
Member of WPG-Software Fund Manager, LLC, the General Partner of WPG
Software Fund, L.P. Mr. Ben Taylor and Mr. Daniel Vandivort exercise sole
voting and dispositive powers with respect to both the shares held and the
shares issuable under the warrants held by WPG Software Fund, L.P.
(4) Includes 20,477 ordinary shares issuable upon exercise of currently
exercisable Warrants up to 8,447 ordinary shares issuable in payment of
liquidated damages resulting from our failure to timely register the
ordinary shares for disposition by the selling shareholder. Weiss, Peck &
Greer Investments, a division of Robeco USA, LLC, is the sole Managing
Member of WPG-Software Fund Manager, LLC, the General Partner of WPG Select
Technology Fund, L.P. Mr. Ben Taylor and Mr. Daniel Vandivort exercise sole
voting and dispositive powers with respect to both the shares held and the
shares issuable under the warrants held by Select Technology Fund LP.
OFFER STATISTICS, EXPECTED TIME TABLE AND PLAN OF DISTRIBUTION
We are registering the ordinary shares offered hereby on behalf of the
selling shareholders. As used herein, "selling shareholders" includes donees,
pledgees, transferees or other successors-in-interest selling shares received
after the date of this prospectus from a named selling shareholder as a gift,
pledge, partnership distribution or other transfer. All costs, expenses and fees
in connection with the registration of the shares offered by this prospectus
will be borne by our company, other than brokerage commissions and similar
selling expenses, if any, attributable to the sale of shares offered hereby
which will be borne by the selling shareholders. Sales of the shares offered
hereby may be effected by selling shareholders from time to time in one or more
types of transactions (which may include block transactions) on the NASDAQ
National Market at prevailing market prices, in the over-the-counter market, in
negotiated transactions, through publicly or privately negotiated put or call
options transactions relating to the shares offered hereby, through short sales
of the shares offered hereby (including the closing of any open short position),
or a combination of such methods of sale, at market prices prevailing at the
time of sale, or at negotiated prices. Such transactions may or may not involve
brokers or dealers. The selling shareholders have advised us that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinating broker acting in connection with the
proposed sale of the shares offered hereby by the selling shareholders.
The selling shareholders may enter into hedging transactions with regard to
the shares offered hereby. In connection with such transactions the
counterparties to such transactions may engage in short sales of the shares
offered hereby or of securities convertible into or exchangeable for such shares
in the course of hedging positions they assume with selling shareholders. The
selling shareholders may also enter into other transactions which require the
delivery of the shares offered by this prospectus, which shares such
counterparties may resell pursuant to this prospectus (as amended or
supplemented, if necessary, to reflect such transaction).
18
The selling shareholders may effect these transactions by selling the
shares offered hereby directly to purchasers or to or through broker-dealers,
which may act as agents or principals. Such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
selling shareholders and/or the purchasers of the shares offered hereby for whom
such broker-dealers may act as agents or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary brokerage commissions).
The selling shareholders and any broker-dealers that act in connection with
the sale of the shares offered hereby might be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, and any commissions
received by such broker-dealers and any profit on the disposition of the shares
offered hereby sold by them while acting as principals might be deemed to be
underwriting discounts or commissions under the Securities Act. We have agreed
to indemnify each selling shareholder against certain liabilities, including
liabilities arising under the Securities Act. The selling shareholders may agree
to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the shares offered hereby against certain
liabilities, including liabilities arising under the Securities Act.
Because selling shareholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the selling shareholders will be
subject to the prospectus delivery requirements of the Securities Act. We have
informed the selling shareholders that the anti-manipulative provisions of
Regulation M promulgated under the Exchange Act may apply to their sales in the
market.
Selling shareholders also may resell all or a portion of the shares offered
hereby in open market transactions in reliance upon Rule 144 under the
Securities Act, provided they meet the criteria and conform to the requirements
of Rule 144 or another exemption under the Securities Act.
Upon our being notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
offered hereby through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
o the name of each such selling shareholder and of the participating
broker-dealer(s);
o the number of shares involved;
o the initial price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
19
o that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
o other facts material to the transaction.
In addition, upon our being notified by a selling shareholder that a donee,
pledgee, transferee or other successor-in-interest intends to sell more than 500
shares, a supplement to this prospectus will be filed.
EXPENSES ASSOCIATED WITH THE REGISTRATION
We have agreed to bear all expenses relating to the registration of the
ordinary shares registered pursuant to the registration statement of which this
prospectus is a part. We estimate these expenses to be approximately $57,000,
which include the following categories of expenses:
SEC registration fee ......................... $ 372.97
Printing and photocopying fees ............... 500.00
Legal fees and expenses ...................... 28,000.00
Accounting fees and expenses ................. 27,000.00
Transfer agent and registrar fees and expenses 500.00
Miscellaneous expenses ....................... 627.03
----------
Total Expenses ...................... $57,000.00
==========
FOREIGN EXCHANGE CONTROLS AND OTHER LIMITATIONS
Israeli law and regulations do not impose any material foreign exchange
restrictions on non-Israeli holders of our ordinary shares. In May 1998, a new
"general permit" was issued under the Israeli Currency Control Law, 1978, which
removed most of the restrictions that previously existed under such law, and
enabled Israeli citizens to freely invest outside of Israel and freely convert
Israeli currency into non-Israeli currencies.
Non-residents of Israel who purchase our ordinary shares will be able to
convert dividends, if any, thereon, and any amounts payable upon our
dissolution, liquidation or winding up, as well as the proceeds of any sale in
Israel of our ordinary shares to an Israeli resident, into freely repatriable
dollars, at the exchange rate prevailing at the time of conversion, provided
that the Israeli income tax has been withheld (or paid) with respect to such
amounts or an exemption has been obtained.
EXPERTS
Our consolidated financial statements as of December 31, 2004 and 2003 and
as of December 31, 2003 and 2002, and for each of the three years in the periods
ended December 31, 2004 and December 31, 2003, respectively, appearing in our
Annual Report on Form 20-F for the year ended December 31, 2004, and
incorporated in this prospectus by reference, have been audited by Kost Forer
Gabbay & Kasierer, a Member of Ernst & Young Global, independent registered
public accounting firm, as set forth in their report thereon included herein and
incorporated in this prospectus by reference. These consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
20
LEGAL MATTERS
The validity of the 1,138,182 ordinary shares offered hereby will be passed
on for us by Goldfarb, Levy, Eran & Co. of Tel Aviv, Israel.
MATERIAL CHANGES
Except as otherwise described in our Annual Report on Form 20-F for the
fiscal year ended December 31, 2004 and in our Reports on Form 6-K filed under
the Exchange Act and incorporated by reference herein, no reportable material
changes have occurred since December 31, 2004.
WHERE YOU CAN BEST FIND MORE INFORMATION; INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE
This prospectus is a part of a registration statement on Form F-3,
Registration No. 333-122937, which we filed with the SEC under the Securities
Act of 1933. As permitted by the rules and regulations of the SEC, this
prospectus does not contain all of the information contained in the registration
statement and the exhibits and schedules thereto. As such we make reference in
this prospectus to the registration statement and to the exhibits and schedules
thereto. For further information about us and about the securities we hereby
offer, you should consult the registration statement and the exhibits and
schedules thereto. You should be aware that statements contained in this
prospectus concerning the provisions of any documents filed as an exhibit to the
registration statement or otherwise filed with the SEC are not necessarily
complete, and in each instance reference is made to the copy of such document so
filed. Each such statement is qualified in its entirety by such reference.
We file annual and special reports and other information with the SEC
(Commission File Number 000-20892). These filings contain important information
which does not appear in this prospectus. For further information about us, you
may read and copy these filings at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the public reference room by calling the SEC at 1-800-SEC-0330, and
may obtain copies of our filings from the public reference room by calling (202)
942-8090.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to other documents which we have filed or will file with the SEC.
We are incorporating by reference in this prospectus the documents listed below
and all amendments or supplements we may file to such documents, as well as any
future filings we may make with the SEC on Form 20-F under the Exchange Act
before the time that all of the securities offered by this prospectus have been
sold or de-registered.
21
o Our Annual Report on Form 20-F for the fiscal year ended December 31,
2004;
o Our Reports on Form 6-K submitted to the SEC on January 31, 2005,
April 1, 2005, April 20, 2005, June 30, 2005, July 28, 2005 and August
31, 2005; and
o The description of our ordinary shares contained in Item 1 of our
registration statement on Form 8-A filed with the SEC on December 17,
1991 under the Exchange Act and any amendment or report filed for the
purpose of updating that description.
In addition, we may incorporate by reference into this prospectus our
reports on Form 6-K filed after the date of this prospectus (and before the time
that all of the securities offered by this prospectus have been sold or
de-registered) if we identify in the report that it is being incorporated by
reference in this prospectus.
Certain statements in and portions of this prospectus update and replace
information in the above listed documents incorporated by reference. Likewise,
statements in or portions of a future document incorporated by reference in this
prospectus may update and replace statements in and portions of this prospectus
or the above listed documents.
We shall provide you without charge, upon your written or oral request, a
copy of any of the documents incorporated by reference in this prospectus, other
than exhibits to such documents which are not specifically incorporated by
reference into such documents. Please direct your written or telephone requests
to Attunity Ltd., Einstein Building, Tirat Carmel 39101, Haifa, Israel, Attn.:
Company Secretary, telephone number +972-4-855-9666. You may also obtain
information about us by visiting our website at http://www.attunity.com.
Information contained in our website is not part of this prospectus.
We are an Israeli company and are a "foreign private issuer" as defined in
Rule 3b-4 under the Securities Exchange Act of 1934. As a result, (1) our proxy
solicitations are not subject to the disclosure and procedural requirements of
Regulation 14A under the Exchange Act, (2) transactions in our equity securities
by our officers and directors are exempt from Section 16 of the Exchange Act,
and (3) until November 4, 2002, we were not required to make, and did not make,
our SEC filings electronically, so that those filings are not available on the
SEC's website. However, since that date, we have been making all required
filings with the SEC electronically, and these filings are available over the
Internet at the SEC's website at http://www.sec.gov.
ENFORCEABILITY OF CIVIL LIABILITIES
Service of process upon us and our directors and officers and the Israeli
experts named in this prospectus, many of whom reside outside the United States,
may be difficult to obtain within the United States. Furthermore, since a
substantial portion of our assets, almost all of our directors, some of the
officers and the Israeli experts are located outside the United States, any
judgment obtained in the United States against us or these individuals or
entities may not be collectible within the United States.
22
There is doubt as to the enforceability of civil liabilities under the
Securities Act and the Securities Exchange Act in original actions instituted in
Israel. However, subject to certain time limitations and other conditions,
Israeli courts may enforce final judgments of U.S. courts for liquidated amounts
in civil matters, including judgments based upon the civil liability provisions
of those Acts.
We have irrevocably appointed our subsidiary, Attunity Inc. as our agent to
receive service of process in any action against us in the state and federal
courts sitting in the City of New York, Borough of Manhattan arising out of this
offering or any purchase or sale of securities in connection therewith. We have
not given consent for this agent to accept service of process in connection with
any other claim.
23
ATTUNITY LTD
1,138,182 ORDINARY SHARES
---------------------------
PROSPECTUS
---------------------------
You should rely only on the information incorporated by
reference or provided in this prospectus. We have not
authorized anyone to provide you with different information.
We are not making any offer to sell or buy any of the
securities in any state where the offer is not permitted.
You should not assume that the information in this
prospectus is accurate as of any date other than the date
that appears below.
2005
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 8. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Israeli Companies Law provides that an Israeli company cannot exculpate
an office holder from liability with respect to a breach of his duty of loyalty,
but may, if permitted by its articles of association, exculpate in advance an
office holder from his liability to the company, in whole or in part, with
respect to a breach of his duty of care. However, a company may not exculpate a
director in advance from his liability to the company with respect to a breach
of his duty of care in the event of distributions. Our articles of association
permit us to exculpate an officer to the maximum extent permitted by the Israeli
Companies Law.
The Israeli Companies Law provides that a company may, if permitted by its
articles of association, enter into a contract for the insurance of the
liability of any of its office holders with respect to an act performed by him
in his capacity as an office holder, for:
o a breach of his duty of care to us or to another person;
o a breach of his duty of loyalty to us, provided that the office holder
acted in good faith and had reasonable cause to assume that his act
would not prejudice our interests; or
o a financial liability imposed upon him in favor of another person.
Our articles of association provide that we may enter into a contract for
the insurance of the liability, in whole in part, of any of our office holders,
to the maximum extent permitted by the Israeli Companies Law.
In addition, in accordance with the Israeli Companies Law, our articles of
association provide that we may, with respect to an act performed by an office
holder in such capacity, (i) undertake in advance to indemnify an office holder,
provided that the undertaking shall be limited to events that our board of
directors believes are foreseeable in light of our actual operations at the time
of providing the undertaking and to a sum or standard that our board of
directors determines to be reasonable under the circumstances; and (ii)
indemnify an office holder retroactively; against:
o a financial liability imposed on him or her in favor of another person
by any judgment, including a settlement or an arbitration award
approved by a court;
o reasonable litigation expenses, including attorney's fees, incurred by
the office holder as a result of an investigation or proceeding
instituted against him by a competent authority, provided that such
investigation or proceeding concluded without the filing of an
indictment against him and either (A) concluded without the imposition
of any financial liability in lieu of criminal proceedings or (B)
concluded with the imposition of a financial liability in lieu of
criminal proceedings with respect to a criminal offense that does not
require proof of criminal intent; and
II-1
o reasonable litigation expenses, including attorneys' fees, incurred by
such office holder or charged to him or her by a court, in a
proceeding we instituted against him or her or instituted on our
behalf or by another person, or in a criminal charge from which he or
she was acquitted or in which he or she was convicted of a criminal
offense that does not require proof of intent.
Our articles of association include the following provisions:
o we are authorized to grant in advance an undertaking to indemnify our
office holders, provided that the undertaking is: limited to specified
events which the board of directors determines to be anticipated; and
limited to an amount determined by the board of directors to be
feasible under the circumstances.
o we are authorized to indemnify retroactively our office holders.
These provisions are specifically limited in their scope by the Israeli
Companies Law, which provides that a company may not indemnify an office holder,
nor exculpate an office holder, nor enter into an insurance contract which would
provide coverage for any monetary liability incurred as a result of certain
improper actions.
Pursuant to the Israeli Companies Law, exculpation of, procurement of
insurance coverage for, and an undertaking to indemnify or indemnification of,
our office holders must be approved by our audit committee and our board of
directors and, if such office holder is a director, also by our shareholders.
We have undertaken to indemnify our office holders to the fullest extent
permitted by law by providing them with a letter of indemnification to be
substantially in the form previously approved by our shareholders. We currently
maintain directors and officers liability insurance with a per claim and
aggregate coverage limit of $10 million including legal costs incurred in
Israel.
ITEM 9. EXHIBITS
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
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4.1 Memorandum of Association of the Registrant (1)
4.2 Articles of Association of the Registrant, as amended (2)
4.3 Specimen of Ordinary Share Certificate (3)
4.4 Note and Warrant Purchase Agreement dated March 22, 2004, among the
Registrant and the purchasers signatory thereto (4)
4.5 Registration Rights Agreement dated May 4, 2004, among the Registrant
and the purchasers signatory thereto (5)
4.6 Form of Convertible Promissory Note (6)
4.7 Form of Warrant issued in connection with the Note and Warrant
Purchase Agreement dated March 22, 2004 (7)
4.8 Form of Series A Warrant (8)
4.9 Form of Series B Warrant (9)
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4.10 Form of October 2001 Placement Agent's Warrant (10)
4.11 Form of Warrant issued to Gaus Investments Ltd. and R.4.B Ltd. (11)
4.12 Loan Agreement dated June 3, 2004 among the Registrant and Plenus
Technologies, Ltd. (12)
4.13 Form of Warrant issued to Plenus Technologies Ltd. (12)
4.14 Amendment to Share Purchase Agreement among the Registrant, Bridges
For Islands Ltd., Dov Biran, Dr. Dov Biran Holdings Ltd. and Poalim
Capital Markets and Investments Ltd. (13)
4.15 Securities Purchase Agreement dated January 24, 2005, among the
Registrant and certain funds affiliated with Weiss, Peck & Greer*
4.16 Registration Rights Agreement dated January 24, 2005, among the
Registrant and certain funds affiliated with Weiss, Peck & Greer*
4.17 Form of Warrant issued to certain funds affiliated with Weiss, Peck &
Greer*
4.18 Agreement with One Software Technologies Ltd.*
5.1 Opinion of Goldfarb, Levy, Eran & Co. regarding legality of the
securities being registered
23.1 Consent of Kost Forer Gabbay & Kasierer, a member of Ernst and Young
Global
23.2 Consent of Goldfarb, Levy, Eran & Co. (contained in Exhibit 5.1)
24.1 Power of Attorney (included in the signature page of the Registration
Statement)*
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(1) Filed as a Exhibit 3.1 to the Registrant's Registration Statement on Form
F-1, registration number 33-54020, filed on October 30, 1992, and
incorporated herein by reference.
(2) Filed as Exhibit 3.2 to the Registrant's annual report on Form 20-F for the
year ended December 31, 2000, filed on July 13, 2001, and incorporated
herein by reference.
(3) Filed as a Exhibit 4 to the Amendment No. 2 to the Registrant's
Registration Statement on Form F-1, registration number 33-54020, filed on
December 9, 1992, and incorporated herein by reference.
(4) Incorporated by reference to Item 3 of the Registrant's Report on Form 6-K
for the month of March, 2004, filed on March 25, 2004 (SEC File No.
000-20892).
(5) Incorporated by reference to Item 6 of the Registrant's Report on Form 6-K
for the month of March, 2004, filed on March 25, 2004 (SEC File No.
000-20892).
(6) Incorporated by reference to Item 5 of the Registrant's Report on Form 6-K
for the month of March, 2004, filed on March 25, 2004 (SEC File No.
000-20892).
(7) Incorporated by reference to Item 4 of the Registrant's Report on Form 6-K
for the month of March, 2004, filed on March 25, 2004 (SEC File No.
000-20892).
(8) Filed as Exhibit 10.2 to the Registrant's Registration Statement on Form
F-3, registration number 333-14140, filed on November 28, 2001, and
incorporated herein by reference.
(9) Filed as Exhibit 10.3 to the Registrant's Registration Statement on Form
F-3, registration number 333-14140, filed on November 28, 2001, and
incorporated herein by reference.
(10) Filed as Exhibit 10.4 to the Registrant's Registration Statement on Form
F-3, registration number 333-14140, filed on November 28, 2001, and
incorporated herein by reference.
(11) Filed as Exhibit 4.14 to the Registrant's annual report on Form 20-F for
the year ended December 31, 2003, filed on June 30, 2004, and incorporated
herein by reference.
(12) Filed as Exhibit 4.13 to the Registrant's annual report on Form 20-F for
the year ended December 31, 2003, filed on June 30, 2004, and incorporated
herein by reference.
(13) Filed as Exhibit 10.6 to the Registrant's annual report on Form 20-F for
the year ended December 31, 2000, filed on July 16, 2001, and incorporated
herein by reference.
*Previously filed.
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ITEM 10. UNDERTAKINGS
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;
(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 Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 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.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining liability under the Securities
Act of 1933, 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 bone 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.
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(4) To file a post-effective amendment to the registration statement to
include any financial statements required by Item 8.A. of Form 20-F at
the start of any delayed offering or throughout a continuous offering.
Financial statements and information otherwise required by Section
10(a)(3) of the Act need not be furnished, PROVIDED that the
Registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph
and other information necessary to ensure that all other information
in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need
not be filed to include financial statements and information required
by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-K if such
financial statements and information are contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
(5) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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.
(6) 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 foregoing
provisions, 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it complies with all of
the requirements for filing on Form F-3 and has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Haifa, Israel, on September 19, 2005.
ATTUNITY LTD
By: /S/ Ofer Segev
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Ofer Segev
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on April 19, 2005.
SIGNATURE TITLE
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* Chairman of the Board of Directors
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Shimon Alon
* Chief Executive Officer and Director
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Itzhak (Aki) Ratner
/S/ Ofer Segev Chief Accounting and Financial Officer
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Ofer Segev
* Director
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Dov Biran
* Director
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Dan Falk
------------------- Director
Anat Segal
------------------- Director
Ron Zuckerman
------------------- Director
Zamir Bar-Zion
Attunity Inc. Authorized Representative in the United States
By: /S/ Ofer Segev
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Name: Ofer Segev
Title: Chief Financial Officer
* By: /S/ Ofer Segev
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Ofer Segev
(Attorney-in-fact)
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