Filed Pursuant to Rule 424(b)(3)
File No. 333-89710
PROSPECTUS
1,641,672 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 Accenture LLP. The offering is not being underwritten.
We will not receive any proceeds from the sale of the shares.
Accenture LLP, or its 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 13,776,392
shares of our common stock held by several existing stockholders other than
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 2.
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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 July 8, 2002.
TABLE OF CONTENTS
PAGE
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Prospectus Summary.......................................... 1
Risk Factors................................................ 2
Special Note Regarding Forward-Looking Information.......... 9
Use of Proceeds............................................. 9
Selling Stockholder......................................... 10
Plan of Distribution........................................ 11
Legal Matters............................................... 13
Experts..................................................... 13
Where You Can Find More Information......................... 14
Incorporation of Documents by Reference..................... 14
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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. Accenture
LLP is offering to sell, and seeking offers to buy, shares of our common stock
only in jurisdictions where offers and sales are permitted.
ii
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.
THE OFFERING
COMMON STOCK OFFERED.......... All of the shares offered by this prospectus
are being sold by Accenture LLP or its
pledgees, donees, transferees or other
successors-in-interest.
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.
1
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
2
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
3
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
LLP 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 LLP. 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
4
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
(including proceeds from the Series B preferred stock and common stock
financings), 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 convertible preferred stock and common stock warrants 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.
5
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
6
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 issued convertible 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 perferred stock.
7
Each share of Series B-I and B-II convertible 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 $19.97 in the case
of the Series B-1 convertible preferred stock and $17.66 in the case of the
Series B-2 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-I and B-II convertible 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 6, 2003 until February 6,
2004, for the Series B-I convertible preferred stock, and from August 28, 2003
until February 17, 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 28, 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-I and B-II convertible 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-I and B-II
convertible 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-I and B-II convertible
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.
8
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 Accenture LLP or its pledgees, donees, transferees or other
successors-in-interest. For information about Accenture LLP, see "Selling
Stockholder." We will not receive any proceeds from the sale of shares offered
by this prospectus.
Accenture LLP will pay any underwriting discounts and commissions and
expenses incurred by it for brokerage, accounting, tax or legal services or any
other expenses incurred by it 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.
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SELLING STOCKHOLDER
The following table and related notes set forth information regarding the
beneficial ownership of our common stock as of June 3, 2002 by Accenture LLP.
The shares of common stock being offered by this prospectus were issued to
Accenture LLP as of June 3, 2002, as described below under "Relationship with
Accenture LLP." As used below, the term "selling stockholder" means Accenture
LLP or any pledgees, donees, transferees or other successors-in-interest selling
shares received after the date of this prospectus from Accenture LLP as a
pledge, gift, partnership, distribution or other non-sale related transfer.
We do not know when or in what amounts the selling stockholder may offer
shares for sale. The selling stockholder may choose not to sell any of the
shares offered by this prospectus. Because the selling stockholder 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
stockholder will hold after completion of the offering. For purposes of the
following table, we have assumed that the selling stockholder 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.
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE OFFERING AFTER OFFERING
------------------------------- SHARES ------------------------
OUTSTANDING BEING OUTSTANDING
SELLING STOCKHOLDER SHARES PERCENTAGE OFFERED SHARES PERCENTAGE
------------------- ------------------ ---------- ---------- ----------- ----------
Accenture LLP........... 1,641,672 4.6% 1,641,672 -- --
RELATIONSHIP WITH ACCENTURE LLP
On February 9, 2002, we entered into agreements relating to a new strategic
alliance with Accenture LLP focused on creating solutions for manufacturing and
supply chain execution by chemical and petroleum manufacturers. Under these
agreements, we are to compensate Accenture LLP for implementation services and
licensed intellectual property by issuing shares of common stock to Accenture
LLP as follows:
- On June 3, 2002, we issued to Accenture LLP the shares of common stock
being offered hereby. The number of shares issued was equal to $18.5
million divided by the average closing price of the common stock on the
ten trading days ending May 31, 2002.
- On August 30, 2002, we will issue to Accenture LLP a number of shares of
common stock equal to $11.1 million divided by the average closing price
of the common stock on the ten trading days ending one day before the
date of issuance. These shares are not being offered by this prospectus.
We expect to register these shares under the Securities Act after August
30, 2002 for resale by Accenture LLP pursuant to a separate prospectus.
- If Accenture LLP completes specified development work, we will, on or
about July 31, 2003, issue to Accenture LLP a number of shares of common
stock of up to $7.4 million divided by the average closing price of the
common stock on the ten trading days ending one day before the date of
issuance. These shares are not being offered by this prospectus. We
expect to register these shares, if any, under the Securities Act after
issuance for resale by Accenture LLP pursuant to a separate prospectus.
In contemplation of the issuance of these shares of common stock, Accenture
LLP and Aspen entered into (a) a registration rights agreement under which we
agreed to register those shares for sale by Accenture LLP under the Securities
Act and (b) a stockholder agreement relating to, among other things, the voting
and transfer of those shares. Copies of the registration rights agreement and
stockholder agreement with Accenture LLP are included as exhibits to this
registration statement.
Except as described above, neither Accenture LLP nor any of its affiliates
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.
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PLAN OF DISTRIBUTION
For purposes of the following description, the term "selling stockholder"
means Accenture LLP and any pledgees, donees, transferees or other
successors-in-interest selling shares received after the date of this prospectus
from Accenture LLP as a pledge, gift, partnership distribution or other non-sale
related transfer. The selling stockholder may, from time to time, sell any or
all of its 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 stockholder 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 stockholder 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 stockholder may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholder 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 stockholder may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholder (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholder does 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 the
selling stockholder. The selling stockholder 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 stockholder may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by it and, if it
defaults in the performance of its 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 to include the
pledgee, transferee or other successor in interest as a selling stockholder
under this prospectus.
The selling stockholder 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
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provision of the Securities Act to include the pledgee, transferee or other
successor in interest as a selling stockholder under this prospectus.
The selling stockholder 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. We have agreed to indemnify the
selling stockholder against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
The selling stockholder has advised us that it has not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of its 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 the selling stockholder. If we are notified by the
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 stockholder uses this prospectus
for any sale of the shares of common stock, it will be subject to the prospectus
delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities Exchange
Act may apply to sales of our common stock and activities of the selling
stockholder.
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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 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 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.
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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.
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
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