AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 3, 2002
REGISTRATION NO. 333-90066
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ASPEN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 04-2739697
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
TEN CANAL PARK
CAMBRIDGE, MASSACHUSETTS 02141
(617) 949-1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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LAWRENCE B. EVANS
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
ASPEN TECHNOLOGY, INC.
TEN CANAL PARK
CAMBRIDGE, MASSACHUSETTS 02141
(617) 949-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
STEPHEN J. DOYLE, ESQ. MARK L. JOHNSON, ESQ.
ASPEN TECHNOLOGY, INC. HALE AND DORR LLP
TEN CANAL PARK 60 STATE STREET
CAMBRIDGE, MASSACHUSETTS 02141 BOSTON, MASSACHUSETTS 02109
TELEPHONE: (617) 949-1000 TELEPHONE: (617) 526-6000
FAX: (617) 949-1727 FAX: (617) 526-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] --------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] --------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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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),
SHALL DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS 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 THE SELLING
STOCKHOLDERS ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES, IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 3, 2002
PROSPECTUS
13,776,392 SHARES
ASPEN TECHNOLOGY, INC.
COMMON STOCK
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This prospectus relates to shares of common stock that may be offered and
sold at various times by the selling stockholders identified on page 11 of this
prospectus. The offering is not being underwritten. These shares include shares
that are issuable from time to time upon conversion of shares of our Series B-I
and B-II convertible preferred stock and upon the exercise of warrants by the
selling stockholders. We will not receive any proceeds from the sale of the
shares.
The selling stockholders, or their pledgees, donees, transferees or other
successors-in-interest, may offer the shares from time to time through public or
private transactions at prevailing market prices, at prices related to
prevailing market prices or at privately negotiated prices.
Concurrently with this offering, we are registering for resale 1,641,672
shares of our common stock held by Accenture LLP. These shares will be offered
pursuant to a separate prospectus and may be offered from time to time through
public or private transactions at prevailing market prices, at prices related to
prevailing market prices or at privately negotiated prices. We will not receive
any of the proceeds of the sale of these shares.
Our common stock is traded on the Nasdaq National Market under the symbol
"AZPN."
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The date of this prospectus is , 2002.
TABLE OF CONTENTS
PAGE
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Prospectus Summary.......................................... 1
Risk Factors................................................ 3
Special Note Regarding Forward-Looking Information.......... 10
Use of Proceeds............................................. 10
Selling Stockholders........................................ 11
Plan of Distribution........................................ 15
Legal Matters............................................... 17
Experts..................................................... 17
Where You Can Find More Information......................... 17
Incorporation of Documents by Reference..................... 18
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We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. The selling
stockholders are offering to sell, and seeking offers to buy, shares of our
common stock only in jurisdictions where offers and sales are permitted.
PROSPECTUS SUMMARY
This summary highlights important features of this offering and the
information included or incorporated by reference in this prospectus. This
summary does not contain all of the information that you should consider before
investing in our common stock. You should read the entire prospectus carefully,
especially the risks of investing in our common stock discussed under "Risk
Factors."
ASPEN TECHNOLOGY
OUR BUSINESS: We are a global provider of intelligent
decision-support and e-business solutions to
the process industries. Our decision-support
software and service solutions enable customers
to automate, integrate and optimize complex
engineering, manufacturing and supply chain
functions. Customers use our e-business
solutions to automate and synchronize
collaborations with suppliers, customers and
other trading partners over the Internet.
Customers use our solutions to optimize
manufacturing performance at the individual
plant level, across multiple plants and
throughout the extended supply chain. These
solutions enable customers to increase
competitiveness and profitability by improving
manufacturing efficiency, responsiveness and
product quality.
OUR ADDRESS: Our principal executive offices are located at
Ten Canal Park, Cambridge, Massachusetts 02141.
Our telephone number is (617) 949-1000. Our
website is located at www.aspentech.com.
Information contained in our website is not a
part of this prospectus.
1
THE OFFERING
COMMON STOCK OFFERED: All of the shares offered by this prospectus
are being sold by the selling stockholders. The
selling stockholders consist of:
- entities that purchased an aggregate of
40,000 shares of our Series B-I convertible
preferred stock and 20,000 shares of our
Series B-II convertible preferred stock,
which shares are initially convertible into
an aggregate of 3,135,480 shares of common
stock, and related warrants, which are
initially exercisable to acquire an aggregate
of 791,044 shares of common stock, and
- entities and individuals that purchased an
aggregate of 4,166,665 shares of common stock
and related warrants, which are initially
exercisable to acquire 3,208,333 shares of
common stock.
We refer to our Series B-I convertible
preferred stock and Series B-II convertible
preferred stock collectively as Series B
preferred stock.
A total of 6,401,394 of the shares offered
hereby have been registered on behalf of
holders of Series B preferred stock and related
warrants. We may issue up to 1,493,244 of these
shares to pay dividends on the Series B
preferred stock.
USE OF PROCEEDS: We will not receive any proceeds from the sale
of shares in this offering.
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"ASPENTECH" and "PETROVANTAGE" are our trademarks. This prospectus also
contains trademarks, service marks and trade names of other companies.
2
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should
consider the risks and uncertainties described below carefully before purchasing
our common stock. The risks and uncertainties described below are not the only
ones facing our company. Additional risks and uncertainties may also impair our
business operations. If any of the following risks actually occur, our business,
financial condition or results of operations would likely suffer. In that case,
the trading price of our common stock could fall, and you may lose all or part
of the money you paid to buy our common stock.
OUR LENGTHY SALES CYCLE MAKES IT DIFFICULT TO PREDICT QUARTERLY REVENUE LEVELS
AND OPERATING RESULTS.
Because license fees for our software products are substantial and the
decision to purchase our products typically involves members of our customers'
senior management, the sales process for our solutions is lengthy and can exceed
one year. Accordingly, the timing of our software revenues is difficult to
predict, and the delay of an order could cause our quarterly revenues to fall
substantially below expectations. Moreover, to the extent that we succeed in
shifting customer purchases away from individual software solutions and toward
more costly integrated suites of software and services, our sales cycle may
lengthen, which could increase the likelihood of delays and cause the effect of
a delay to become more pronounced. We have limited experience in forecasting the
timing of sales of our integrated suites of software and services. Delays in
sales could cause significant shortfalls in our revenues and operating results
for any particular period.
FLUCTUATIONS IN OUR QUARTERLY REVENUES, OPERATING RESULTS AND CASH FLOW MAY
CAUSE THE MARKET PRICE OF OUR COMMON STOCK TO FALL.
Our revenues, operating results and cash flow have fluctuated in the past
and may fluctuate significantly in the future as a result of a variety of
factors, many of which are outside of our control, including:
- our customers' purchasing patterns;
- the length of our sales cycle;
- changes in the mix of our license revenues and service revenues;
- the timing of introductions of new solutions and enhancements by us and
our competitors;
- seasonal weakness in the first quarter of each fiscal year, primarily
caused by a slowdown in business in some of our international markets;
- the timing of our investments in new product development;
- changes in our operating expenses; and
- fluctuating economic conditions, particularly as they affect companies in
the chemicals, petrochemicals and petroleum industries.
We ship software products within a short period after receipt of an order
and typically do not have a material backlog of unfilled orders for software
products. Consequently, revenues from software licenses in any quarter are
substantially dependent on orders booked and shipped in that quarter.
Historically, a majority of each quarter's revenues from software licenses has
come from license agreements that have been entered into in the final weeks of
the quarter. Therefore, even a short delay in the consummation of an agreement
may cause our revenues to fall below public expectations for that quarter.
Since our expense levels are based in part on anticipated revenues, we may
be unable to adjust spending quickly enough to compensate for any revenue
shortfall and any revenue shortfall would likely have a disproportionately
adverse effect on our operating results. We expect that these factors will
continue to affect our operating results for the foreseeable future. Because of
the foregoing factors, we believe that
3
period-to-period comparisons of our operating results are not necessarily
meaningful and should not be relied upon as indications of future performance.
If, due to one or more of the foregoing factors or an unanticipated cause,
our operating results fail to meet the expectations of public market analysts
and investors in a future quarter, the market price of our common stock would
likely decline.
BECAUSE WE DERIVE A MAJORITY OF OUR TOTAL REVENUES FROM CUSTOMERS IN THE
CYCLICAL CHEMICALS, PETROCHEMICALS AND PETROLEUM INDUSTRIES, OUR OPERATING
RESULTS MAY SUFFER IF THESE INDUSTRIES EXPERIENCE AN ECONOMIC DOWNTURN.
We derive a majority of our total revenues from companies in the chemicals,
petrochemicals and petroleum industries. Accordingly, our future success depends
upon the continued demand for manufacturing optimization software and services
by companies in these process manufacturing industries. The chemicals,
petrochemicals and petroleum industries are highly cyclical. In the past,
worldwide economic downturns and pricing pressures experienced by chemical,
petrochemical and petroleum companies have led to consolidations and
reorganizations. These downturns, pricing pressures and restructurings have
caused delays and reductions in capital and operating expenditures by many of
these companies. These delays and reductions have reduced demand for products
and services like ours. A recurrence of these industry patterns, as well as
general domestic and foreign economic conditions and other factors that reduce
spending by companies in these industries, could harm our operating results in
the future.
IF WE DO NOT COMPETE SUCCESSFULLY, WE MAY LOSE MARKET SHARE.
Our markets are highly competitive. Our asset optimization software
competes with products of businesses such as Simulation Sciences, a division of
Invensys. Our value chain planning software competes with products of companies
such as i2 Technologies, Manugistics and SAP. Our value chain execution competes
with products of companies such as Honeywell's Hi-Spec division, Invensys and
SAP. We also face competition in all three areas from large companies in the
process industries that have developed their own proprietary software solutions.
Some of our current competitors have significantly greater financial,
marketing and other resources than we have. In addition, many of our current
competitors have established, and may in the future continue to establish,
cooperative relationships with third parties to improve their product offerings
and to increase the availability of their products to the marketplace. The entry
of new competitors or alliances into our market could reduce our market share,
require us to lower our prices, or both. Many of these factors are outside our
control, and we may not be able to maintain or enhance our competitive position
against current and future competitors.
IF WE FAIL TO INTEGRATE THE OPERATIONS OF THE COMPANIES WE ACQUIRE, WE MAY NOT
REALIZE THE ANTICIPATED BENEFITS AND OUR OPERATING COSTS COULD INCREASE.
We intend to continue to pursue strategic acquisitions that will provide us
with complementary products, services and technologies and with additional
personnel. The identification and pursuit of these acquisition opportunities and
the integration of acquired personnel, products, technologies and businesses
require a significant amount of management time and skill. There can be no
assurance that we will identify additional suitable acquisition candidates,
consummate any acquisition on acceptable terms or successfully integrate any
acquired business into our operations. Additionally, in light of the
consolidation trend in our industry, we expect to face competition for
acquisition opportunities, which may substantially increase the cost of any
potential acquisition.
We have experienced in the past, and may experience again in the future,
problems integrating the operations of a newly acquired company with our own
operations. Acquisitions also expose us to potential risks, including diversion
of management's attention, failure to retain key acquired personnel, assumption
of legal or other liabilities and contingencies, and the amortization of
goodwill and other acquired intangible
4
assets. Moreover, customer dissatisfaction with, or problems caused by, the
performance of any acquired products or technologies could hurt our reputation.
In particular, on May 31, 2002, we acquired Hyprotech Ltd. and related
subsidiaries from AEA Technology plc for approximately L67.5 million in cash.
The Hyprotech business operates globally and is the second largest acquisition
we have made. The integration of the personnel, products and technologies of
Hyprotech will require significant management time and skill, and our inability
to complete the integration effectively and efficiently could cause our
operating results to suffer.
We have funded the Hyprotech acquisition substantially from the proceeds of
convertible preferred stock and common stock financings completed in 2002. We
may issue additional equity securities or incur long-term indebtedness to
finance future acquisitions. The issuance of equity securities could result in
dilution to existing stockholders, while the use of cash reserves or significant
debt financing could reduce our liquidity and weaken our financial condition.
IF WE DO NOT CONTINUE TO MAKE THE TECHNOLOGICAL ADVANCES REQUIRED BY THE
MARKETPLACE, OUR BUSINESS COULD BE SERIOUSLY HARMED.
Enterprises are requiring their application software vendors to provide
greater levels of functionality and broader product offerings. Moreover,
competitors continue to make rapid technological advances in computer hardware
and software technology and frequently introduce new products, services and
enhancements. We must continue to enhance our current product line and develop
and introduce new products and services that keep pace with the technological
developments of our competitors. Our business and operating results could suffer
if we cannot successfully respond to the technological advances of others or if
our new products or product enhancements and services do not achieve market
acceptance.
We must also satisfy increasingly sophisticated customer requirements.
Under our business plan, we are investing significantly in the development of
new business process products that are intended to anticipate and meet the
emerging needs of our target market. We are focusing significantly on
development of these products, which means we will not invest as substantially
in the continued enhancement of our current products. We cannot assure you that
our new product development will result in products that will meet market needs
and achieve market acceptance.
Moreover, our product development for the foreseeable future is expected to
be conducted substantially through co-development arrangements with Accenture
that we entered into in February 2002. Our previous development activities have
been conducted primarily by our employees and consultants, and we have no
previous experience in co-developing products with Accenture. Our business and
operating results will be seriously harmed if this co-development arrangement
does not result in our being able to deliver timely products sought by companies
in the process industries.
IF WE ARE UNABLE TO MARKET OUR PRODUCTS SUCCESSFULLY TO SENIOR EXECUTIVES OF
POTENTIAL CUSTOMERS, OUR REVENUE GROWTH MAY BE LIMITED.
In recent periods, we have focused increasingly on selling the strategic
value of our technology to the highest executive levels of customer
organizations, typically the chief executive officer, chief financial officer or
chief information officer. We have limited experience in selling and marketing
at these levels. If we are not successful at selling and marketing to senior
executives, our revenue growth and operating results could suffer.
IF WE ARE UNABLE TO DEVELOP RELATIONSHIPS WITH SYSTEMS INTEGRATORS AND OTHER
STRATEGIC PARTNERS, OUR REVENUE GROWTH MAY BE HARMED.
One element of our growth strategy is to increase the number of third-party
implementation partners who market and integrate our products. If we do not
adequately train a sufficient number of systems integrator partners, or if
potential partners focus their efforts on integrating or co-selling competing
products to the process industries, our future revenue growth could be limited
and our operating results
5
could be harmed. If our partners fail to implement our solutions for our
customers properly, the reputations of our solutions and our company could be
harmed and we might be subject to claims by our customers. We intend to continue
to establish partnerships with technology companies to accelerate the
development and marketing of our solutions. To the extent that we are
unsuccessful in maintaining our existing relationships and developing new
relationships, our revenue growth may be harmed.
WE MAY REQUIRE ADDITIONAL CAPITAL.
We may need to raise additional capital in order to fund the continued
development and marketing of our solutions. We expect our current cash balances,
cash-equivalents, short-term investments, availability of sales of our
installment contracts, availability under our bank line of credit and cash flows
from operations will be sufficient to meet our working capital and capital
expenditure requirements for at least the next twelve months. However, we may
need to obtain additional financing thereafter or earlier, if our current plans
and projections prove to be inaccurate or our expected cash flows prove to be
insufficient to fund our operations because of lower-than-expected revenues,
unanticipated expenses or other unforeseen difficulties or to fund one or more
acquisitions. Our ability to obtain additional financing will depend on a number
of factors, including market conditions, our operating performance and investor
interest. These factors may make the timing, amount, terms and conditions of any
financing unattractive. They may also result in our incurring additional
indebtedness or accepting stockholder dilution. In addition, in 2002, we have
issued the shares of Series B preferred stock, as well as the warrants
exercisable for a portion of the shares of common stock being offered by this
prospectus, that contain anti-dilution provisions, rights of first refusal and
other terms that may limit or impair our ability to raise additional funds
through future financings. If adequate funds are not available or are not
available on acceptable terms, we may have to forego strategic acquisitions or
investments, reduce or defer our development activities, or delay our
introduction of new products and services. Any of these actions may seriously
harm our business and operating results.
WE MAY SUFFER LOSSES ON FIXED-PRICE ENGAGEMENTS.
We derive a substantial portion of our total revenues from service
engagements and a significant percentage of these engagements have been
undertaken on a fixed-price basis. We bear the risk of cost overruns and
inflation in connection with fixed-price engagements, and as a result, any of
these engagements may be unprofitable. In the past, we have had cost overruns on
fixed-price service engagements. In addition, to the extent that we are
successful in shifting customer purchases to our integrated suites of software
and services and we price those engagements on a fixed-price basis, the size of
our fixed-price engagements may increase, which could cause the impact of an
unprofitable fixed-price engagement to have a more pronounced impact on our
operating results.
OUR BUSINESS MAY SUFFER IF WE FAIL TO ADDRESS THE CHALLENGES ASSOCIATED WITH
INTERNATIONAL OPERATIONS.
We derived approximately 50% of our total revenues from customers outside
the United States in each of the past three fiscal years. We anticipate that
revenues from customers outside the United States will continue to account for a
significant portion of our total revenues for the foreseeable future. Our
operations outside the United States are subject to additional risks, including:
- unexpected changes in regulatory requirements, exchange rates, tariffs
and other barriers;
- political and economic instability;
- difficulties in managing distributors and representatives;
- difficulties in staffing and managing foreign subsidiary operations;
- difficulties and delays in translating products and product documentation
into foreign languages; and
- potentially adverse tax consequences.
6
The impact of future exchange rate fluctuations on our operating results
cannot be accurately predicted. In recent years, we have increased the extent to
which we denominate arrangements with international customers in the currencies
of the countries in which the software or services are provided. From time to
time we have engaged in, and may continue to engage in, hedges of a significant
portion of installment contracts denominated in foreign currencies. Any hedging
policies implemented by us may not be successful, and the cost of these hedging
techniques may have a significant negative impact on our operating results.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, WHICH COULD MAKE
US LESS COMPETITIVE AND CAUSE US TO LOSE MARKET SHARE.
We regard our software as proprietary and rely on a combination of
copyright, patent, trademark and trade secret laws, license and confidentiality
agreements, and software security measures to protect our proprietary rights. We
have registered or have applied to register several of our significant
trademarks in the United States and in selected other countries. We generally
enter into non-disclosure agreements with our employees and customers, and
historically have restricted access to our software products' source codes,
which we regard as proprietary information. In a few cases, we have provided
copies of the source code for some of our products to customers solely for the
purpose of special product customization and have deposited copies of the source
code for some of our products in third-party escrow accounts as security for
ongoing service and license obligations. In these cases, we rely on
non-disclosure and other contractual provisions to protect our proprietary
rights.
The steps we have taken to protect our proprietary rights may not be
adequate to deter misappropriation of our technology or independent development
by others of technologies that are substantially equivalent or superior to our
technology. Any misappropriation of our technology or development of competitive
technologies could harm our business, and could force us to incur substantial
costs in protecting and enforcing our intellectual property rights. The laws of
some countries in which our products are licensed do not protect our products
and intellectual property rights to the same extent as the laws of the United
States.
WE MAY HAVE TO DEFEND AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS, WHICH
COULD BE EXPENSIVE AND, IF WE ARE NOT SUCCESSFUL, COULD DISRUPT OUR BUSINESS.
Third parties may assert patent, trademark, copyright and other
intellectual property rights to technologies that are important to us. In such
an event, we may be required to incur significant costs in litigating a
resolution to the asserted claims. The outcome of any litigation could require
us to pay damages or obtain a license to a third party's proprietary rights in
order to continue licensing our products as currently offered. If such a license
is required, it might not be available on terms acceptable to us, if at all.
OUR SOFTWARE IS COMPLEX AND MAY CONTAIN UNDETECTED ERRORS.
Like many other complex software products, our software has on occasion
contained undetected errors or "bugs." Because new releases of our software
products are initially installed only by a selected group of customers, any
errors or "bugs" in those new releases may not be detected for a number of
months after the delivery of the software. These errors could result in loss of
customers, harm to our reputation, adverse publicity, loss of revenues, delay in
market acceptance, diversion of development resources, increased insurance costs
or claims against us by customers.
WE MAY BE SUBJECT TO SIGNIFICANT EXPENSES AND DAMAGES BECAUSE OF LIABILITY
CLAIMS.
The sale and implementation of some of our software products and services,
particularly in the areas of advanced process control and optimization, may
entail the risk of product liability claims. Our software products and services
are used in the design, operation and management of manufacturing processes at
large facilities, and any failure of our software could result in significant
claims against us for damages or
7
for violations of environmental, safety and other laws and regulations. Our
agreements with our customers generally contain provisions designed to limit our
exposure to potential product liability claims. It is possible, however, that
the limitation of liability provisions in our agreements may not be effective as
a result of federal, state or local laws or ordinances or unfavorable judicial
decisions. A substantial product liability claim against us could harm our
operating results and financial condition.
IMPLEMENTATION OF OUR PRODUCTS CAN BE DIFFICULT, TIME-CONSUMING AND CUSTOMERS
MAY BE UNABLE TO IMPLEMENT OUR PRODUCTS SUCCESSFULLY OR OTHERWISE ACHIEVE THE
BENEFITS ATTRIBUTABLE TO OUR PRODUCTS.
Our products are intended to work with complex business processes. Some of
our software, such as customized scheduling applications and integrated supply
chain solutions, must integrate with the existing computer systems and software
programs of our customers. This can be complex, time-consuming and expensive. As
a result, some customers may have difficulty in implementing or be unable to
implement these products successfully or otherwise achieve the benefits
attributable to these products. Customers may also make claims against us
relating to the functionality, performance or implementation of this software.
Delayed or ineffective implementation of the software products or related
services may limit our ability to expand our revenues and may result in customer
dissatisfaction, harm to our reputation and may result in customer unwillingness
to pay the fees associated with these products.
IF WE ARE NOT SUCCESSFUL IN OUR MANAGEMENT TRANSITION OR IN ATTRACTING AND
RETAINING MANAGEMENT TEAM MEMBERS AND OTHER HIGHLY QUALIFIED INDIVIDUALS IN OUR
INDUSTRY, WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGY.
Our ability to establish and maintain a position of technology leadership
in the highly competitive e-business software market depends in large part upon
our ability to attract and retain highly qualified managerial, sales and
technical personnel. We have historically relied on the services of Lawrence B.
Evans, our principal founder and our Chairman, President and Chief Executive
Officer. We recently announced a change in senior management effective October
1, 2002. David L. McQuillin, who will become our Chief Executive Officer in
October 2002, has been serving as one of our co-chief operating officer and has
not previously served as the chief executive officer of publicly traded
corporation. In the future, we may experience the departure of other senior
executives due to competition for talent from start-ups and other companies. Our
future success depends on a successful management transition and will also
depend on our continuing to attract, retain and motivate highly skilled
employees. Competition for employees in our industry is intense. We may be
unable to retain our key employees or attract, assimilate or retain other highly
qualified employees in the future. We have from time to time in the past
experienced, and we expect to continue to experience in the future, difficulty
in hiring and retaining highly skilled employees with appropriate
qualifications.
OUR COMMON STOCK MAY EXPERIENCE SUBSTANTIAL PRICE AND VOLUME FLUCTUATIONS.
The equity markets have from time to time experienced extreme price and
volume fluctuations, particularly in the high technology sector, and those
fluctuations have often been unrelated to the operating performance of
particular companies. In addition, factors such as our financial performance,
announcements of technological innovations or new products by us or our
competitors, as well as market conditions in the computer software or hardware
industries, may have a significant impact on the market price of our common
stock. In the past, following periods of volatility in the market price of a
public company's securities, securities class action litigation has often been
initiated against companies. This type of litigation could result in substantial
costs and a diversion of our management's attention and resources.
OUR COMMON STOCKHOLDERS MAY EXPERIENCE FURTHER DILUTION AND THE PRICE OF OUR
COMMON STOCK MAY DECLINE AS A RESULT OF OUR RECENT CONVERTIBLE PREFERRED STOCK
AND COMMON STOCK FINANCINGS.
In 2002, we have issued the Series B preferred stock together with warrants
to purchase 791,044 shares of common stock. We currently have outstanding 40,000
shares of Series B-I convertible preferred stock and 20,000 shares of Series
B-II convertible preferred stock.
8
Each share of Series B preferred stock is convertible into a number of
shares of common stock equal to the stated value, which initially is $1,000,
divided by a conversion price of $19.9703 in the case of the Series B-I
convertible preferred stock and $17.66 in the case of the Series B-II
convertible preferred stock, subject to antidilution and other adjustments. If
we issue additional shares of common stock, or instruments convertible or
exchangeable for common stock, at an effective net price less than the lesser of
(a) $17.75, in the case of the Series B-I convertible preferred stock, or $15.69
in the case of the Series B-II convertible preferred stock and (b) the
then-applicable conversion price for such series, the conversion price for that
series will be reduced to equal that effective net price. These adjustments do
not apply to the issuance of common stock or such instruments in specified firm
commitment underwritten public offerings, strategic arrangements, mergers or
acquisitions, and grants and purchases of securities pursuant to equity
incentive plans.
The Series B preferred stock accrues dividends at an annual rate of 4% that
is payable quarterly, commencing June 30, 2002, in either cash or common stock,
at our option (subject to our satisfaction of specified conditions set forth in
our charter). From August 7, 2003 until February 7, 2004, for the Series B-I
convertible preferred stock, and from August 28, 2003 until February 28, 2004,
for the Series B-II convertible preferred stock, holders may require that we
redeem up to a total of 20,000 shares of Series B-I convertible preferred stock
and 10,000 shares of Series B-II convertible preferred stock if the average
closing price of the common stock for the 20 consecutive trading days
immediately preceding August 7, 2003 and August 28, 2003, respectively, or any
date thereafter is below the then-applicable conversion price. Beginning on
February 8, 2004 and February 29, 2004, holders of Series B-I convertible
preferred stock and Series B-II convertible preferred stock, respectively, may
require that we redeem any or all of their shares. Any such redemption must be
made in cash or stock, at our option (subject to our satisfaction of specified
conditions set forth in our charter), at a price equal to the stated value plus
accrued but unpaid dividends. We will be required to redeem all of the
then-outstanding Series B preferred stock on February 7, 2009 at a price equal
to the stated value plus all accrued but unpaid dividends. The redemption price
may be paid in cash, common stock or both, at our option (subject to our
satisfaction of specified conditions set forth in our charter).
As a result of these and other provisions, the Series B preferred stock may
be converted, and the warrants may be exercised, at a price per share that may
be less than the then-current market price of the common stock, which may cause
substantial dilution to our existing common stockholders. If the conversion
price of the Series B preferred stock or the exercise price of the warrants
decreases as a result of antidilution provisions, the number of shares of common
stock issuable in connection with any dividends conversion or redemption could
increase significantly.
In May 2002, we sold 4,166,665 shares of common stock, together with
five-year warrants to purchase up to 750,000 shares of common stock, in a
private placement. In addition, we issued unit warrants, exercisable until July
23, 2002, that could result in the issuance of (a) up to an additional 2,083,333
shares of common stock and (b) five-year warrants to purchase up to an
additional 375,000 shares of common stock. If we issue additional shares of
common stock, or instruments convertible or exchangeable for common stock, in
specified transactions at an effective net price less than the exercise price of
any of the five-year warrants, then the exercise price of the warrants will be
adjusted pursuant to a weighted average anti-dilution formula. As the result of
these and other provisions, these warrants may be exercised at a price per share
that may be less than the then-current market price of the stock, which may
cause dilution to our existing common stockholders.
9
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus includes and incorporates forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. All statements, other than statements of historical
facts, included or incorporated in this prospectus regarding our strategy,
future operations, financial position, future revenues, projected costs,
prospects, plans and objectives of management are forward-looking statements.
The words "anticipates," "believes," "estimates," "expects," "intends," "may,"
"plans," "projects," "will," "would" and similar expressions are intended to
identify forward-looking statements, although not all forward-looking statements
contain these identifying words. We cannot guarantee that we actually will
achieve the plans, intentions or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking statements we make.
We have included important factors in the cautionary statements included or
incorporated in this prospectus, particularly under the heading "Risk Factors,"
that we believe could cause actual results or events to differ materially from
the forward-looking statements that we make. Our forward-looking statements do
not reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures or investments we may make. We do not assume any
obligation to update any of our forward-looking statements.
USE OF PROCEEDS
All of the shares of common stock offered by this prospectus are being
offered by the selling stockholders. For information about the selling
stockholders, see "Selling Stockholders." We will not receive any proceeds from
the sale of shares by the selling stockholders.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the selling stockholders for brokerage,
accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the offered shares. We will bear all other costs,
fees and expenses incurred in effecting the registration of the shares covered
by this prospectus, including all registration and filing fees, Nasdaq listing
fees, and fees and expenses of our counsel and our accountants.
10
SELLING STOCKHOLDERS
The following table and related notes set forth information regarding the
beneficial ownership of our common stock as of May 22, 2002 by the selling
stockholders. The selling stockholders consist of:
- entities that in February and March 2002 acquired 40,000 shares of our
Series B-I convertible preferred stock, 20,000 shares of our Series B-II
convertible preferred stock and 5-year warrants to acquire shares of our
common stock; and
- entities and individuals that in May 2002 purchased 4,166,665 shares of
common stock, 5-year warrants exercisable to acquire shares of our common
stock, and 90-day warrants exercisable to acquire (a) additional shares
of our common stock and (b) additional 5-year warrants to acquire shares
of common stock.
See "Series B Preferred Stock and Warrants" below for a brief summary of terms
of the securities issued to the selling stockholders.
The shares of common stock being offered by this prospectus consist of the
shares of the common stock acquired by the selling stockholders in May 2002,
together with the shares of common stock issued from time to time after the date
hereof pursuant to conversions of the Series B preferred stock acquired by the
selling stockholders in February and March 2002 and to exercises of the warrants
acquired by the selling stockholders in February, March and May 2002. The term
"selling stockholder" includes donees, pledgees, transferees or other
successors-in-interest selling shares received after the date of this prospectus
from the selling stockholders as a gift, pledge, partnership, distribution or
other non-sale related transfer.
We do not know when or in what amounts a selling stockholder may offer
shares for sale. The selling stockholders may choose not to sell any of the
shares offered by this prospectus. Because the selling stockholders may offer
all or some of the shares pursuant to this offering, and because there are
currently no agreements, arrangements or understandings with respect to the sale
of any of the shares, we cannot estimate the number of the shares that the
selling stockholders will hold after completion of the offering. For purposes of
the following table, we have assumed that the selling stockholders will sell all
of the shares covered by this prospectus.
Beneficial ownership in the following table is determined in accordance
with the rules of the SEC, and includes voting or investment power with respect
to shares. Shares reflected under "Right to Acquire -- Preferred" consist of
shares of common stock issuable within 60 days after May 22, 2002 pursuant to
conversions of the Series B preferred stock, and shares reflected under "Right
to Acquire -- Warrants" consist of shares of common stock issuable within 60
days after May 22, 2002 pursuant to exercises of warrants, disregarding, in each
case, the limitations described in the table and in the last paragraph under
"Series B Preferred Stock and Warrants" below. Shares set forth under "Right to
Acquire" with respect to a selling stockholder are deemed outstanding for
purposes of computing the percentage ownership of that selling stockholder but
are not deemed outstanding for purposes of computing the percentage ownership of
any other selling stockholder. Unless otherwise indicated below, to our
knowledge, all selling stockholders named in the table have sole voting and
investment power with respect to their shares of stock, except to the extent
authority is shared by spouses under applicable law.
11
BENEFICIAL OWNERSHIP
BENEFICIAL OWNERSHIP BEFORE OFFERING AFTER OFFERING
------------------------------------------------------------ --------------------
RIGHT TO ACQUIRE SHARES
OUTSTANDING --------------------- TOTAL BEING TOTAL
SELLING STOCKHOLDER SHARES PREFERRED WARRANTS NUMBER PERCENTAGE OFFERED NUMBER PERCENTAGE
------------------- ----------- --------- --------- --------- ---------- --------- ------- ----------
Pine Ridge Financial Inc........ 2,104,600 1,517,665 1,677,259 5,299,524 13.7%+ 4,877,924 421,600 1.1%
c/o Cavallo Capital Corp.
660 Madison Avenue
New York, NY 10022
Perseverance LLC................ -- 526,948 129,863 656,811 1.8+ 656,811 -- --
c/o Cavallo Capital Corp.
660 Madison Avenue
New York, NY 10022
Smithfield Fiduciary LLC........ 1,200,000 1,090,867 1,203,832 3,494,699 9.2+ 3,494,699 -- --
c/o Highbridge Capital
Management, LLC
9 West 57th Street
27th Floor
New York, NY 10019
SMALLCAP World Fund, Inc........ 482,900 -- 359,590 842,490 2.3 826,590 15,900 *
c/o Capital Research
and Management Company
333 South Hope Street,
55th Floor
Los Angeles, CA 90071
Citadel Equity Fund Ltd......... 373,894 -- 192,500 566,394 1.6 442,500 123,894 *
c/o Citadel Investment
Group, L.L.C.
225 West Washington St.
Chicago, IL 60606
Salvadore ClaveMarcet........... 16,665 -- 12,833 29,498 * 29,498 -- --
121 Hawkside Mews
Calgary, Alberta T3G 3K9
Wayne Sim....................... 550,000 -- 423,500 973,500 2.7 973,500 -- --
35 Spring Gate Estates
Calgary, Alberta 3TZ 3L2
---------------
* Less than one percent.
+ This percentage and the number of shares shown as beneficially owned by this
selling stockholder under the "Right to Acquire" and "Total Number" columns
disregard the limitations on acquiring shares of common stock upon the
conversion of Series B Preferred Stock or the exercise of warrants if the
conversion or exercise would result in this selling stockholder beneficially
owning more than 4.99% of our outstanding common stock without first providing
us with 61 days' notice.
Cavallo Capital Corp. may be deemed to have voting control and investment
discretion over the securities held by Pine Ridge and Perserverance as the
result of agreements it has entered into with those two entities. In such event,
Cavallo would be deemed to beneficially own, before the offering, a total of
5,956,335 shares, or 15.1% of the total outstanding shares of common stock
(disregarding the limitations described in the table above), and, after the
offering, a total of 421,600 shares, or 1.1% of the total outstanding shares of
common stock.
Highbridge Capital Management, LLC is the trading manager of Smithfield
Fiduciary LLC and consequently has voting control and investment discretion over
the shares of common stock held by Smithfield. Glenn Dubin and Henry Swieca
control Highbridge Capital Management, LLC. Each of Highbridge Capital
Management, LLC and Messrs. Dubin and Sweica disclaims beneficial ownership of
the shares held by Smithfield Fiduciary LLC. The number of shares beneficially
owned and the percentage reflected in the table disregard the limitations on the
right to acquire shares of common stock described in the table above.
The outstanding shares of common stock reflected as beneficially owned by
Citadel Equity Fund Ltd. include 70,338 shares of common stock held by Aragon
Investments, Ltd. Citadel Limited Partnership is the trading manager of Citadel
Equity Fund Ltd. and Aragon Investments, Ltd. and consequently has voting
control and investment discretion over the shares of common stock held by each.
Kenneth C. Griffin indirectly controls Citadel Limited Partnership. Each of
Citadel Limited Partnership and
12
Mr. Griffin disclaims beneficial ownership of the shares beneficially owned by
Citadel Equity Fund Ltd. and Aragon Investments, Ltd.
The shares of common stock reflected as beneficially owned by Wayne Sim are
held of record by 3850544 Canada Inc., a Canadian holding company that is wholly
owned by Mr. Sim, with its offices at 400 2nd Avenue S.W., Suite 100, Calgary,
Alberta T2P 5E9.
RELATIONSHIPS WITH SELLING STOCKHOLDERS
Two of the selling stockholders have been employed by Hyprotech, Ltd.
during the past three years. Salvadore ClaveMarcet has served most recently as
Chief Operating Officer of Hyprotech since July 2001, and Wayne Sim has served
most recently as the Chief Executive Officer of Hyprotech since June 2000. We
acquired the capital stock of Hyprotech and related subsidiaries on May 31,
2002.
Except as described above, none of the selling stockholders has held any
position or office with, or has otherwise had a material relationship with, us
or any of our subsidiaries within the past three years.
SERIES B PREFERRED STOCK AND WARRANTS
Each share of Series B preferred stock is convertible into a number of
shares of common stock equal to the stated value, which initially is $1,000,
divided by a conversion price of $19.9703 in the case of the Series B-I
convertible preferred stock and $17.66 in the case of the Series B-II
convertible preferred stock, subject to antidilution and other adjustments. If
we issue additional shares of common stock, or instruments convertible or
exchangeable for common stock, at an effective net price less than the lesser of
(a) $17.75, in the case of the Series B-I convertible preferred stock, or $15.69
in the case of the Series B-II convertible preferred stock and (b) the
then-applicable conversion price for such series, the conversion price for that
series will be reduced to equal that effective net price. These adjustments do
not apply to the issuance of common stock or such instruments in specified firm
commitment underwritten public offerings, strategic arrangements, mergers or
acquisitions, and grants and purchases of securities pursuant to equity
incentive plans.
The Series B preferred stock accrues dividends at an annual rate of 4% that
is payable quarterly, commencing June 30, 2002, in either cash or common stock,
at our option (subject to our satisfaction of specified conditions set forth in
our charter). From August 7, 2003 until February 7, 2004, for the Series B-I
convertible preferred stock, and from August 28, 2003 until February 28, 2004,
for the Series B-II convertible preferred stock, holders may require that we
redeem up to a total of 20,000 shares of Series B-I convertible preferred stock
and 10,000 shares of Series B-II convertible preferred stock if the average
closing price of the common stock for the 20 consecutive trading days
immediately preceding August 7, 2003 and August 28, 2003, respectively, or any
date thereafter is below the then-applicable conversion price. Beginning on
February 8, 2004 and February 29, 2004, holders of Series B-I convertible
preferred stock and Series B-II convertible preferred stock, respectively, may
require that we redeem any or all of their shares. Any such redemption must be
made in cash or stock, at our option (subject to our satisfaction of specified
conditions set forth in our charter), at a price equal to the stated value plus
accrued but unpaid dividends. We will be required to redeem all of the
then-outstanding Series B preferred stock on February 7, 2009 at a price equal
to the stated value plus all accrued but unpaid dividends. The redemption price
may be paid in cash, common stock or both, at our option (subject to our
satisfaction of specified conditions set forth in our charter).
In general, we may require the selling stockholders to convert their shares
of Series B preferred stock into common stock if the closing price of our common
stock has exceeded 135% of the applicable Series B conversion price for 25
consecutive trading days at any time after the effective date of this
registration statement. We may be precluded from exercising this right in
circumstances where some of the 25 trading days occurred after we have publicly
announced a change of control event.
The five-year warrants issued to the selling stockholders in connection
with the sale of the Series B-I convertible preferred stock are initially
exercisable for up to 507,584 shares of common stock at an
13
exercise price of $23.99 per share. The five-year warrants issued to the selling
stockholders in connection with the sale of the Series B-II convertible
preferred stock are initially exercisable for up to 283,460 shares of common
stock at an exercise price of $20.64 per share. If we issue additional shares of
common stock, or instruments convertible or exchangeable for common stock, at an
effective net price less than the exercise price of a warrant, the exercise
price of that warrant will be reduced to equal that effective net price. These
adjustments do not apply, however, to the issuance of common stock or such
instruments in specified firm commitment underwritten public offerings,
strategic arrangements, mergers or acquisitions, and grants and purchases of
securities pursuant to equity incentive plans.
The five-year warrants issued to the selling stockholders in connection
with the sale of our common stock are initially exercisable for a total of
750,000 shares of common stock at an exercise price of $15.00 per share. The
unit warrants are exercisable until July 23, 2002 at an exercise price of $13.20
per share to purchase (a) up to 2,083,333 shares of common stock and (b)
additional warrants, exercisable until May 9, 2007, to purchase up to 375,000
shares of common stock at an exercise price of $15.60 per share. If we issue
additional shares of common stock, or instruments convertible or exchangeable
for common stock, at an effective net price less than the exercise price of the
five-year warrants or additional warrant, the exercise price of such warrants,
as the case may be, will be reduced pursuant to a weighted-average anti-dilution
adjustment formula. These adjustments do not apply, however, to the issuance of
common stock or such instruments in specified firm commitment underwritten
public offerings, strategic arrangements, mergers or acquisitions, and grants
and purchases of securities pursuant to equity incentive plans.
Under the terms of the Series B preferred stock and related warrants, a
selling stockholder may not convert shares of Series B preferred stock or
exercise related warrants if the conversion or exercise would result in the
selling stockholder beneficially owning more than 4.99% of our outstanding
common stock without first providing 61 days' notice to Aspen.
14
PLAN OF DISTRIBUTION
For purposes of the following description, the term "selling stockholders"
includes donees, pledgees, transferees or other successors-in-interest selling
shares received after the date of this prospectus from a selling stockholder as
a gift, pledge, partnership distribution or other non-sale related transfer. The
selling stockholders may, from time to time, sell any or all of their shares of
common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
- an exchange distribution in accordance with the rules of the applicable
exchange;
- privately negotiated transactions;
- short sales;
- broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved. Any
profits on the resale of shares of common stock by a broker-dealer acting as
principal might be deemed to be underwriting discounts or commissions under the
Securities Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any agent, dealer
or broker-dealer that participates in transactions involving sales of the shares
if liabilities are imposed on that person under the Securities Act.
The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus and may sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable
15
provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are involved
in selling the shares of common stock may be deemed to be "underwriters" within
the meaning of the Securities Act in connection with such sales. In such event,
any commissions received by such broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
We are required to pay certain fees and expenses incident to the
registration of the shares of common stock, including certain fees and
disbursements of counsel to the selling stockholders. We have agreed to
indemnify the selling stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
The selling stockholders 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 shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities Exchange
Act of 1934 may apply to sales of our common stock and activities of the selling
stockholders.
16
LEGAL MATTERS
The validity of the common stock offered by this prospectus has been passed
upon for us by Hale and Dorr LLP.
EXPERTS
The combined financial statements of the Hyprotech division of AEA
Technology plc as at, and for the fiscal year ended, March 31, 2002 included
beginning on page F-2 of our current report on Form 8-K dated May 31, 2002 have
been incorporated by reference herein and in the related registration statement
in reliance upon the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
NOTICE REGARDING ARTHUR ANDERSEN LLP
Our consolidated balance sheets as of June 30, 2001 and 2000 and the
consolidated statements of operations, stockholders' equity and comprehensive
income (loss) and cash flows for each of the years in the three-year period
ended June 30, 2001 incorporated by reference in this registration statement
were audited by Arthur Andersen LLP. After reasonable efforts, we have been
unable to obtain the written consent of Arthur Andersen to the incorporation by
reference in this registration statement of such consolidated financial
statements and the related report of Arthur Andersen. Accordingly, we have
omitted from this registration statement the consent of Arthur Andersen in
reliance upon Rule 437a under the Securities Act.
Section 11(a) of the Securities Act provides that if any part of a
registration statement at the time it becomes effective contains an untrue
statement of a material fact or an omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
any person acquiring a security pursuant to such registration statement (unless
it is proved that at the time of such acquisition such person knew of such
untruth or omission) may sue, among others, every accountant who has consented
to be named as having prepared or certified any part of the registration
statement or as having prepared or certified any report or valuation which is
used in connection with the registration statement with respect to the statement
in such registration statement, report or valuation which purports to have been
prepared or certified by the accountant. Since Arthur Andersen has not consented
to the incorporation by reference of our consolidated financial statements in
this registration statement, you will not be able to recover against Arthur
Andersen under Section 11 of the Securities Act for any untrue statements of a
material fact contained in such financial statements or any omissions to state a
material fact required to be stated therein.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other documents with the SEC. You may
read and copy any document we file at the SEC's public reference room at
Judiciary Plaza Building, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549. You should call 1-800-SEC-0330 for more information on the public
reference room. Our SEC filings are also available to you on the SEC's Internet
site at http://www.sec.gov.
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement contains more information than this prospectus
regarding us and our common stock, including exhibits. You can obtain a copy of
the registration statement from the SEC at the address listed above or from the
SEC's Internet site.
17
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC requires us to "incorporate" into this prospectus information that
we file with the SEC in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus. Information contained in this prospectus and information
that we file with the SEC in the future and incorporate by reference in this
prospectus automatically updates and supersedes previously filed information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act, prior to the sale of all the shares covered by this prospectus.
(1) our annual report on Form 10-K for the fiscal year ended June 30, 2001;
(2) our quarterly reports on Form 10-Q for the fiscal quarters ended
September 30, 2001, December 31, 2001, and March 31, 2002,
respectively;
(3) our current reports on Form 8-K filed on October 29, 2001, February 12,
2002, March 5, 2002, March 20, 2002, April 5, 2002, May 31, 2002, June
7, 2002, June 18, 2002, July 2, 2002, and July 3, 2002;
(4) all of our filings pursuant to the Securities Exchange Act after July
3, 2002, the date of filing the amended registration statement; and
(5) the description of our common stock contained in our registration
statement on Form 8-A, as amended by our current report on Form 8-K
filed on March 20, 2002.
You may request a copy of these documents, which will be provided to you at
no cost, by contacting:
Aspen Technology, Inc.
Ten Canal Park
Cambridge, Massachusetts 02141
Attention: Investor Relations
Telephone: (617) 949-1000
Email: invest@aspentech.com
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by the Registrant (except any underwriting
discounts and commissions and expenses incurred by the selling stockholders for
brokerage, accounting, tax or legal services or any other expenses incurred by
the selling stockholders in disposing of the shares). All amounts shown are
estimates except the Securities and Exchange Commission registration fee.
Securities and Exchange Commission registration fee......... $12,738
Legal fees and expenses..................................... 5,000
Accounting fees and expenses................................ 2,500
Printing, EDGAR formatting and mailing expenses............. 5,000
Miscellaneous expenses...................................... 4,762
-------
Total expenses.................................... $30,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article SEVENTH of the Registrant's Certificate of Incorporation, as
amended (the "Certificate of Incorporation"), provides that no director of the
Registrant shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General
Corporation Law prohibits the elimination or limitation of liability of
directors for breach of fiduciary duty.
Article EIGHTH of the Certificate of Incorporation provides that a director
or officer of the Registrant shall be indemnified by the Registrant against:
(a) all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement incurred in connection with any litigation or other
legal proceeding (other than an action by or in the right of the
Registrant) brought against him or her by virtue of his or her position
as a director or officer of the Registrant if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the Registrant, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful; and
(b) all expenses (including attorneys' fees) and amounts paid in the
settlement incurred in connection with any action by or in the right of
the Registrant brought against him or her by virtue of his or her
position as a director or officer of the Registrant if he or she acted
in good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the Registrant, except that no
indemnification shall be made with respect to any matter as to which
such person shall have been adjudged to be liable to the Registrant,
unless a court determines that, despite such adjudication but in view
of all of the circumstances, he or she is entitled to indemnification
of such expenses.
Notwithstanding the foregoing, to the extent that a director or officer has
been successful, on the merits or otherwise, including the dismissal of an
action without prejudice, he or she is required to be indemnified by the
Registrant against all expenses (including attorneys' fees) incurred in
connection therewith. Expenses shall be advanced to a director or officer at his
or her request, provided that he or she undertakes to repay the amount advanced
if it is ultimately determined that he or she is not entitled to indemnification
for such expenses.
Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the
II-1
Registrant that the director or officer did not meet the applicable standard of
conduct required for indemnification, or if the Registrant fails to make an
indemnification payment within sixty days after such payment is claimed by such
person, such person is permitted to petition the court to make an independent
determination as to whether such person is entitled to indemnification. As a
condition precedent to the right of indemnification, the director or officer
must give the Registrant notice of the action for which indemnity is sought and
the Registrant has the right to participate in such action or assume the defense
thereof.
Article EIGHTH of the Certificate of Incorporation further provides that
the indemnification provided therein is not exclusive, and provides that in the
event that the Delaware General Corporation Law is amended to expand the
indemnification permitted to directors or officers the Registrant must indemnify
those persons to fullest extent permitted by such law as so amended.
Section 145 of the Delaware Corporation Law provides that a corporation has
the power to 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 or 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 he or she 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 his or her 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.
The Registrant maintains a directors' and officers' insurance policy that
covers certain liabilities of directors and officers of the Registrant,
including liabilities under the Securities Act of 1933. The Registrant maintains
a general liability insurance policy that covers certain liabilities of
directors and officers of the Registrant arising out of claims based on acts or
omissions in their capacities as directors or officers.
ITEM 16. EXHIBITS
INCORPORATED BY REFERENCE
FILED -------------------------------------
EXHIBIT WITH THIS EXHIBIT
NUMBER DESCRIPTION FORM S-3 FORM FILING DATE WITH SEC NUMBER
------- ----------- --------- ---- -------------------- -------
4.1 Certificate of Incorporation of Aspen 8-K March 27, 1998 3.1
Technology, Inc.
4.2 By-laws of Aspen Technology, Inc. 8-K March 27, 1998 3.2
5.1 Opinion of Hale and Dorr LLP. X
23.1 Consent of PricewaterhouseCoopers LLP. X
23.2 Consent of Hale and Dorr LLP, included in X
Exhibit 5.1 filed herewith.
24.1 Power of Attorney (see page II-5 of the *
Registration Statement as initially
filed).
99.1 Amended and Restated Securities Purchase 8-K March 20, 2002 99.1
Agreement dated as of March 19, 2002
between Aspen Technology, Inc. and the
Purchasers named therein.
99.2 Amended and Restated Registration Rights 8-K March 20, 2002 99.2
Agreement dated as of March 19, 2002
between Aspen Technology, Inc. and the
Purchasers named therein.
II-2
INCORPORATED BY REFERENCE
FILED -------------------------------------
EXHIBIT WITH THIS EXHIBIT
NUMBER DESCRIPTION FORM S-3 FORM FILING DATE WITH SEC NUMBER
------- ----------- --------- ---- -------------------- -------
99.3 Form of Warrant of Aspen Technology, Inc. 8-K February 12, 2002 99.3
dated as of February 6, 2002.
99.4 Form of Warrant of Aspen Technology, Inc. 8-K March 20, 2002 99.4
dated as of February 28, 2002.
99.5 Form of Amendment No. 1, dated as of March 8-K March 20, 2002 99.5
19, 2002, to Warrant dated February 6,
2002.
99.6 Form of Warrant of Aspen Technology, Inc. 8-K March 20, 2002 99.6
dated as of March 19, 2002.
99.7 Securities Purchase Agreement dated as of 8-K June 7, 2002 99.1
May 9, 2002 between Aspen Technology, Inc.
and the Purchasers named therein and
related Amendment dated as of June 5,
2002.
99.8 Amended and Restated Registration Rights 8-K June 7, 2002 99.2
Agreement dated as of June 5, 2002 between
Aspen Technology, Inc. and the Purchasers
named therein.
99.9 Form of Warrant of Aspen Technology, Inc. 8-K June 7, 2002 99.3
dated as of May 9, 2002.
99.10 Form of Unit Warrant of Aspen Technology, 8-K June 7, 2002 99.4
Inc. dated as of May 9, 2002.
---------------
* Filed previously.
ITEM 17. UNDERTAKINGS.
Item 512(a) of Regulation S-K. The undersigned Registrant hereby
undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the 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 this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (1)(I) and (1)(ii) do not apply if the
information required to be included is a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in this Registration
Statement.
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2. That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Item 512(b) of Regulation S-K. The Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
Item 512(h) of Regulation S-K. 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 indemnification provisions
described herein, 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 of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cambridge, Commonwealth of
Massachusetts, as of July 3, 2002.
ASPEN TECHNOLOGY, INC.
By: /s/ LISA W. ZAPPALA
------------------------------------
Lisa W. Zappala
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement has been signed as of July 3,
2002 by the following persons in the capacities indicated.
SIGNATURE TITLE
--------- -----
* Chairman of the Board, President and Chief
------------------------------------------------ Executive Officer (Principal Executive Officer)
Lawrence B. Evans
/s/ LISA W. ZAPPALA Senior Vice President and Chief Financial Officer
------------------------------------------------ (Principal Financial and Accounting Officer)
Lisa W. Zappala
* Director
------------------------------------------------
Joseph F. Boston
* Director
------------------------------------------------
Gresham T. Brebach, Jr.
* Director
------------------------------------------------
Douglas R. Brown
* Director
------------------------------------------------
Stephen L. Brown
* Director
------------------------------------------------
Stephen M. Jennings
* Director
------------------------------------------------
Joan C. McArdle
*By /s/ LISA W. ZAPPALA
------------------------------------------
Attorney-in-fact
II-5
EXHIBIT INDEX
INCORPORATED BY REFERENCE
-------------------------------------
EXHIBIT FILED WITH THIS EXHIBIT
NUMBER DESCRIPTION FORM S-3 FORM FILING DATE WITH SEC NUMBER
------- ----------- --------------- ---- -------------------- -------
4.1 Certificate of Incorporation of Aspen 8-K March 27, 1998 3.1
Technology, Inc. ....................
4.2 By-laws of Aspen Technology, Inc. ... 8-K March 27, 1998 3.2
5.1 Opinion of Hale and Dorr LLP......... X
23.1 Consent of PricewaterhouseCoopers LLP X
23.2 Consent of Hale and Dorr LLP, X
included in Exhibit 5.1 filed
herewith.............................
24.1 Power of Attorney (see page II-5 of *
the Registration Statement as
initially filed).....................
99.1 Amended and Restated Securities 8-K March 20, 2002 99.1
Purchase Agreement dated as of March
19, 2002 between Aspen Technology,
Inc. and the Purchasers named
therein..............................
99.2 Amended and Restated Registration 8-K March 20, 2002 99.2
Rights Agreement dated as of March
19, 2002 between Aspen Technology,
Inc. and the Purchasers named
therein..............................
99.3 Form of Warrant of Aspen Technology, 8-K February 12, 2002 99.3
Inc. dated as of February 6, 2002....
99.4 Form of Warrant of Aspen Technology, 8-K March 20, 2002 99.4
Inc. dated as of February 28, 2002...
99.5 Form of Amendment No. 1, dated as of 8-K March 20, 2002 99.5
March 19, 2002, to Warrant dated
February 6, 2002.....................
99.6 Form of Warrant of Aspen Technology, 8-K March 20, 2002 99.6
Inc. dated as of March 19, 2002......
99.7 Securities Purchase Agreement dated 8-K June 7, 2002 99.1
as of May 9, 2002 between Aspen
Technology, Inc. and the Purchasers
named therein and related Amendment
dated June 5, 2002...................
99.8 Amended and Restated Registration 8-K June 7, 2002 99.2
Rights Agreement dated as of June 5,
2002 between Aspen Technology, Inc.
and the Purchasers named therein.....
99.9 Form of Warrant of Aspen Technology, 8-K June 7, 2002 99.3
Inc. dated as of May 9, 2002.........
99.10 Form of Unit Warrant of Aspen 8-K June 7, 2002 99.4
Technology, Inc. dated as of May 9,
2002.................................
---------------
* Filed previously.