Filed Pursuant to Rule 424(b)(3)
Registration No. 333-119157
PROSPECTUS
ATTUNITY LTD
7,409,226 ORDINARY SHARES
This prospectus relates to up to 7,409,226 ordinary shares that the
selling shareholders named in this prospectus or their transferees may offer
from time to time. Of the ordinary shares offered hereby, (i) 1,371,429 ordinary
shares are issuable upon conversion of $2 million of convertible promissory
notes and 480,000 ordinary shares are issuable upon exercise of warrants, that
were issued to certain of the selling shareholders pursuant to a Note and
Warrant Purchase Agreement dated March 22, 2004; (ii) 2,043,146 ordinary shares
were issued and 2,944,651 ordinary shares are issuable upon exercise of Series A
and Series B Warrants acquired by certain selling shareholders from the Special
Situations Funds; (iii) 230,000 ordinary shares were issued to Dov Biran
Holdings Ltd. in connection with an agreement entered into in June 2001; (iv)
40,000 ordinary shares are issuable upon exercise of warrants issued in February
2004 to Gaus Investments Ltd and R.4.B Ltd in consideration of their introducing
certain investors to us; and (v) 300,000 ordinary shares are issuable upon
exercise of warrants issued to Plenus Technologies Ltd. in connection with a
loan agreement we entered into dated June 3, 2004. We are registering the
ordinary shares for disposition by the selling shareholders pursuant to
commitments with the selling shareholders. The registration of the ordinary
shares does not necessarily mean that the selling shareholders or their
transferees will offer or sell their shares.
Attunity Ltd will not receive any additional proceeds from the sale by
the selling shareholders of the ordinary shares offered by this prospectus, and
will bear all expenses in connection with the preparation of this prospectus.
The ordinary shares of Attunity Ltd are traded on the NASDAQ National
Market under the symbol "ATTU." On September 23, 2005, the closing price of an
ordinary share of Attunity Ltd on the NASDAQ National Market was $2.45.
See "Risk Factors" beginning on page 5 to read about factors you should
consider before buying the ordinary shares of Attunity Ltd.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
Prospectus dated September 26, 2005
TABLE OF CONTENTS
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Page
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Notice regarding Forward-Looking Statements 2
Prospectus Summary 4
Risk Factors 5
Capitalization and Indebtedness 15
Reasons for the Offer and Use of Proceeds 15
Market Price Data 15
Selling Shareholders 16
Offer Statistics, Expected Time Table and Plan of Distribution 22
Expenses Associated with the Registration 24
Foreign Exchange Controls and Other Limitations 24
Experts 24
Legal Matters 25
Matterial Changes 25
Where You Can Best Find More Information; Incorporation of
Certain Information by Reference 25
Enforceability of Civil Liabilities 26
In this prospectus, "we", "us", "our", the "Company" and "Attunity"
refer to Attunity Ltd, an Israeli company Attunity Ltd and its subsidiaries,
unless otherwise indicated.
We are a "foreign private issuer" as defined in Rule 3b-4 under the
Securities Exchange Act of 1934, or the Exchange Act. As a result, our proxy
solicitations are not subject to the disclosure and procedural requirements of
Regulation 14A under the Exchange Act and transactions in our equity securities
by our officers and directors are exempt from Section 16 of the Exchange Act. In
addition, we are not required under the Exchange Act to file periodic reports
and financial statements as frequently or as promptly as U.S. companies whose
securities are registered under the Exchange Act.
We publish annually an annual report on our website containing
financial statements that have been examined and reported on, with an opinion
expressed by, a qualified independent auditor or certified public accountant. We
prepare our financial statements in United States dollars and in accordance with
accounting principles generally accepted in the United States. All references to
"dollars" or "$" in this prospectus are to U.S. dollars, and all references to
"shekels" or "NIS" are to New Israeli Shekels.
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in it by reference
contain forward-looking statements which involve known and unknown risks and
uncertainties. We include this notice for the express purpose of permitting us
to obtain the protections of the safe harbor provided by the Private Securities
Litigation Reform Act of 1995 with respect to all such forward-looking
statements. Examples of forward-looking statements include: projections of
capital expenditures, competitive pressures, revenues, growth prospects, product
development,
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financial resources and other financial matters. You can identify these and
other forward-looking statements by the use of words such as "may," "will,"
"should," "plans," "anticipates," "believes," "estimates," "predicts,"
"intends," "potential" or the negative of such terms, or other comparable
terminology.
Our ability to predict the results of our operations or the effects of
various events on our operating results is inherently uncertain. Therefore, we
caution you to consider carefully the matters described under the caption "Risk
Factors" and certain other matters discussed in this prospectus, the documents
incorporated by reference in this prospectus, and other publicly available
sources. Such factors and many other factors beyond the control of our
management could cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by the forward-looking statements.
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PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information about us, the ordinary shares that may be sold from time to time,
and our financial statements and the notes to them, all of which appear
elsewhere in this prospectus or in the documents incorporated by reference in
this prospectus.
ATTUNITY LTD
We were incorporated under the laws of the State of Israel in 1988. We
develop, market and support standards-based integration middleware for accessing
mainframe, enterprise data sources and legacy applications.
Our principal executive offices are located at Einstein Building, Tirat
Carmel, Haifa 39101, Israel, and our telephone number is (+972) 4-855-9666. Our
address on the Internet is http://www.attunity.com. Information contained on our
website does not constitute a part of this prospectus.
The Offering
Ordinary shares offered................ 7,409,226 shares (including 3,764,651
shares issuable upon exercise of
warrants and 1,371,429 shares issuable
upon conversion of $2 million of
convertible promissory notes).
NASDAQ National Market symbol.......... "ATTU"
Use of proceeds........................ We will not receive any proceeds from
the sale of the ordinary shares
offered hereby. We will, however,
receive the proceeds from the exercise
of the warrants if and when they are
exercised, which we will use for
working capital and general corporate
purposes.
Ordinary shares outstanding............ 17,129,759 shares.
Risk Factors........................... Prospective investors should carefully
consider the "Risk Factors" beginning
on page 5 before buying the ordinary
shares offered hereby.
4
RISK FACTORS
You should carefully consider the risks and uncertainties described
below before investing in our ordinary shares. Our business, prospects,
financial condition and results of operations could be adversely affected due to
any of the following risks. In that case, the value of our ordinary shares could
decline, and you could lose all or part of your investment.
Risk Factors Relating to Our Company
We have a history of operating losses and may not achieve or sustain
profitability in the future.
We reported operating losses of $877,000 for the six month period ended
June 30, 2005 and $4.04 million for the year ended December 31, 2004, and
incurred operating losses in four of the five preceding years. We can not assure
you that we will be able to achieve or sustain profitable operations in the
future.
Our operating results fluctuate significantly.
Our quarterly results have fluctuated significantly in the past and are
likely to fluctuate significantly in the future. Our future operating results
will depend on many factors, including, but not limited to, the following:
o the size and timing of significant orders and their fulfillment;
o demand for our products;
o changes in our pricing policies or those of our competitors;
o the number, timing and significance of product enhancements;
o new product announcements by us and our competitors;
o our ability to successfully market newly acquired products and
technologies;
o our ability to develop, introduce and market new and enhanced
products on a timely basis;
o changes in the level of our operating expenses;
o budgeting cycles of our customers;
o customer order deferrals in anticipation of enhancements or new
products that we or our competitors offer;
o product life cycles;
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o software bugs and other product quality problems;
o personnel changes;
o changes in our strategy;
o seasonal trends and general domestic and international economic
and political conditions, among others;
o currency exchange rate fluctuations and economic conditions in
the geographic areas where we operate; and
o the assurance of success in marketing new products or
technologies.
Due to the foregoing factors, quarterly revenues and operating results
are difficult to forecast, and it is likely that our future operating results
will be adversely affected by these or other factors.
Revenues are also difficult to forecast because our sales cycle, from
initial evaluation to purchase, is lengthy and varies substantially from
customer to customer. We typically ship product orders shortly after receipt
and, consequently, order backlog at the beginning of any quarter has in the past
represented only a small portion of that quarter's revenues. As a result,
license revenues in any quarter depend substantially on orders booked and
shipped in that quarter.
Due to all of the foregoing, we cannot predict revenues for any future
quarter with any significant degree of accuracy. Accordingly, we believe that
period-to-period comparisons of our operating results are not necessarily
meaningful and you should not rely upon them as indications of future
performance. Although we have experienced revenue growth in the past, we may not
be able to sustain this growth rate, and you should not consider such past
growth indicative of future revenue growth, or of future operating results.
We may need to raise additional capital in the future, which may not be
available to us.
Our working capital requirements and the cash flow provided by our
operating activities are likely to vary greatly from quarter to quarter,
depending on the timing of orders and deliveries, and the payment terms offered
to our customers. We may need to raise additional funds in the future for a
number of uses, including:
o implementing marketing and sales activities for our products and
services;
o expanding research and development programs;
o expanding investment in fixed assets; and
o hiring additional qualified personnel.
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We may not be able to obtain additional funds on acceptable terms or at
all. If we cannot raise needed funds on acceptable terms, we may be required to
delay, scale back or eliminate some aspects of our operations and we may not be
able to:
o develop new products;
o enhance our existing products;
o remain current with evolving industry standards;
o take advantage of future opportunities; or
o respond to competitive pressures or unanticipated requirements.
Any equity or debt financings, if available at all, may cause dilution
to our then-existing shareholders. If additional funds are raised through the
issuance of equity securities, the net tangible book value per share of our
ordinary shares would decrease and the percentage ownership of then current
shareholders would be diluted.
Our operating results vary quarterly and seasonally.
We have often recognized a substantial portion of our revenues in the
last quarter of the year and in the last month, or even weeks or days, of a
quarter. Our expense levels are substantially based on our expectations for
future revenues and are therefore relatively fixed in the short term. If revenue
levels fall below expectations, our quarterly results are likely to be
disproportionately adversely affected because a proportionately smaller amount
of our expenses varies with our revenues.
Our operating results reflect seasonal trends and we expect to continue
to be affected by such trends in the future. We expect to continue to experience
relatively higher sales in the first and second quarters of the year and
relatively lower sales in the third quarter ending September 30, as a result of
reduced sales activity in Europe during the summer months. Due to the foregoing
factors, in some future quarter our operating results may be below the
expectations of public market analysts and investors. In such event, it is
likely that the price of our ordinary shares would be materially adversely
affected.
We are subject to risks associated with international operations.
We are based in Israel and generate a large percentage of our sales
outside the United States. Our sales in the United States accounted for 40.2%,
39.3%, 35.9% and 53.6% of our total revenues for the years ended December 31,
2002, 2003, 2004 and the six months ended June 30, 2005, respectively. Although
we continue to expand our international operations and commit significant
management time and financial resources to developing direct and indirect
international sales and support channels, we cannot be certain that we will be
able to maintain or increase international market demand for our products. To
the extent that we cannot do so in a timely manner, our business, operating
results and financial condition will be adversely affected.
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International operations are subject to inherent risks, including the
following:
o the impact of possible recessionary environments in multiple
foreign markets;
o longer receivables collection periods and greater difficulty in
accounts receivable collection;
o unexpected changes in regulatory requirements;
o difficulties and costs of staffing and managing foreign
operations;
o reduced protection for intellectual property rights in some
countries;
o potentially adverse tax consequences; and
o political and economic instability.
We cannot be certain that we, our distributors or our resellers will be
able to sustain or increase revenues from international operations or that the
foregoing factors will not have a material adverse effect on our future revenues
and, as a result, our business, operating results and financial condition.
We may be adversely affected by fluctuations in currency exchange
rates. While our revenues are generally denominated in United States dollars,
the Euro and British Pound, a significant portion of our expenses are incurred
in NIS. If we were to determine that it was in our best interests to enter into
any hedging transactions in the future, there can be no assurance that we will
be able to so do or that such transactions, if entered into, will materially
reduce the effect of fluctuations in foreign currency exchange rates on our
results of operations. In addition, if for any reason exchange or price controls
or other restrictions on the conversion of foreign currencies into NIS were
imposed, our business could be adversely affected. Although exposure to currency
fluctuations to date has not had a material adverse effect on our business there
can be no assurance such fluctuations in the future will not have a material
adverse effect on revenues from international sales and, consequently our
business, operating results and financial condition.
We are subject to risks relating to proprietary rights and risks of
infringement.
We are dependent upon our proprietary software technology and we rely
primarily on a combination of copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect our proprietary
rights. Except for our trademark registrations for Attunity(R), Attunity B2B(R)
and Attunity Connect(R) in the United States, we do not have any trademark,
patent or copyright registrations. To protect our software, documentation and
other written materials, we rely on trade secret and copyright laws, which
afford only limited protection. It is possible that others will develop
technologies that are similar or superior to our technology. Despite our efforts
to protect our proprietary rights, unauthorized parties may attempt to copy
aspects of our products or to obtain and use information that we regard as
proprietary. It is difficult to police the unauthorized use of products in our
field, and we expect
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software piracy to be a persistent problem, although we are unable to determine
the extent to which piracy of our software products exists. In addition, the
laws of some foreign countries do not protect our proprietary rights as fully as
do the laws of the United States. We cannot be certain that our means of
protecting our proprietary rights in the United States or abroad will be
adequate or that our competition will not independently develop similar
technology.
We are not aware that we have infringed any proprietary rights of third
parties. It is possible, however, that third parties will claim that we have
infringed upon their intellectual property rights. We believe that software
product developers will increasingly be subject to infringement claims as the
number of products and competitors in our industry segment grows and the
functionality of products in different industry segments overlaps. It would be
time consuming for us to defend any such claims, with or without merit, and any
such claims could:
o result in costly litigation;
o divert management's attention and resources;
o cause product shipment delays; or
o require us to enter into royalty or licensing agreements. Such
royalty or licensing agreements, if required, may not be
available on terms acceptable to us, if at all.
If there is a successful claim of infringement against us and we are
not able to license the infringed or similar technology or other intellectual
property, our business, operating results and financial condition would be
materially adversely affected.
A significant portion of our revenues are dependent on maintenance payments from
customers using legacy CorVision and Mancal 2000 software.
Approximately 16% of our revenues are derived from annual maintenance
payments made by customers who use CorVision, Mancal 2000 and APTuser, which are
legacy software products. In 2002, 2003, 2004 and the six months ended June 30,
2005, these revenues on a consolidated basis totaled $3.0 million, $2.8 million,
$2.7 million and $1.3 million, respectively. Some of these customers may replace
these legacy products with more state-of-the-art products from other vendors
and, as a result, discontinue use of these products. This would result in a
reduction in our maintenance revenues and adversely affect our operating
results.
Our products have a lengthy sales cycle.
Our customers typically use our products to deploy applications that
are critical to their business. As a result, the licensing and implementation of
our products generally involves a significant commitment of attention and
resources by prospective customers. Because of the long approval process that
typically accompanies strategic initiatives or capital expenditures by
companies, our sales process is often delayed, with little or no control over
any delays encountered by us. Our sales cycle can be further extended for sales
made through third party
9
distributors. Delay in the sales cycle of our products could result in
significant fluctuations in our quarterly operating results.
Rapid technological change may adversely affect the market acceptance of our
products and services.
We compete in a market that is characterized by rapid technological
change. The introduction of new technologies could render existing products and
services obsolete and unmarketable and could exert price pressures on our
products and services. Any future success will depend upon our ability to
address the increasingly sophisticated needs of our customers by:
o supporting existing and emerging hardware, software, databases
and networking platforms; and
o developing and introducing new and enhanced applications that
keep pace with such technological developments, emerging new
markets and changing customer requirements.
Our products may contain defects that may be costly to correct, delay market
acceptance of our products and expose us to litigation.
Despite testing by us, errors may be found in our software products. If
defects are discovered, we may not be able to successfully correct them in a
timely manner or at all. Defects and failures in our products could result in a
loss of, or delay in, market acceptance of our products and could damage our
reputation. Although our standard license agreement with our customers contains
provisions designed to limit our exposure to potential product liability claims,
it is possible that these provisions may not be effective or enforceable under
the laws of some jurisdictions, and we could fail to realize revenues and suffer
damage to our reputation as a result of, or in defense of, a substantial claim.
We currently do not carry product liability insurance for our products.
The loss of the services of our key personnel would negatively affect our
business.
Our future success depends to a large extent on the continued services
of our senior management and key personnel. In particular, we are dependent on
the services of a small number of key executives. Any loss of the services of
members of our senior management or other key personnel, particularly to a
competitor, would negatively affect our business.
Our results may be adversely affected by competition.
The market for our software products is fragmented and is intensely
competitive. Competition in the industry is generally based on product
performance, depth of product line, technical support and price. We compete both
with international and local software providers, many of whom have significantly
greater financial, technical and marketing resources than us.
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We anticipate continued growth and competition in the software products market
and, consequently, the entrance of new competitors into the market. Our existing
and potential competitors may be able to develop software products and services
that are as effective as, or more effective or easier to use than those offered
by us. Such existing and potential competitors may also enjoy substantial
advantages over us in terms of research and development expertise, manufacturing
efficiency, name recognition, sales and marketing expertise and distribution
channels. There can be no assurance that we will be able to compete successfully
against current or future competitors or that competition will not have a
material adverse effect on our future revenues and, consequently, on our
business, operating results and financial condition.
We do not intend to pay cash dividends.
Our policy is to retain earnings for use in our business and, for this
reason, we do not intend to pay cash dividends on the ordinary shares in the
foreseeable future.
Risk Factors Relating to our Ordinary Shares
Our share price has been volatile in the past and may decline in the future.
Our ordinary shares have experienced significant market price and
volume fluctuations in the past and may experience significant market price and
volume fluctuations in the future in response to factors such as the following,
some of which are beyond our control:
o quarterly variations in our operating results;
o operating results that vary from the expectations of securities
analysts and investors;
o changes in expectations as to our future financial performance,
including financial estimates by securities analysts and
investors;
o announcements of technological innovations or new products by us
or our competitors;
o announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;
o changes in the status of our intellectual property rights;
o announcements by third parties of significant claims or
proceedings against us;
o additions or departures of key personnel;
o future sales of our ordinary shares; and
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o stock market price and volume fluctuations.
Domestic and international stock markets often experience extreme price
and volume fluctuations. Market fluctuations, as well as general political and
economic conditions, such as a recession or interest rate or currency rate
fluctuations or political events or hostilities in or surrounding Israel, could
adversely affect the market price of our ordinary shares.
In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and divert management's attention
and resources.
Issuance of a significant amount of additional ordinary shares on account of
outstanding warrants and convertible notes will dilute our current shareholders
and substantial future sales of our ordinary shares may depress our share price.
As of September 15, 2005, we had 17,129,759 ordinary shares issued and
outstanding and approximately 8.55 million additional ordinary shares are
issuable upon exercise of outstanding options and warrants and the conversion of
convertible notes. This includes 1,018,182 ordinary shares (290,909 of which are
issuable upon the exercise of outstanding warrants) that were issued to
investors in a private placement that we completed in January 2005, and up to an
additional 120,000 ordinary shares may be issued to such investors in payment of
liquidated damages resulting from our failure to timely register the foregoing
ordinary shares for disposition by the investors, as required under a
registration rights agreement that we and the investors entered into in
connection with the private placement. The issuance of a significant amount of
additional ordinary shares on account of the outstanding warrants, convertible
notes and in payment of the foregoing liquidated damages will dilute our current
shareholders and may depress our share price. In addition, if our shareholders,
and in particular the investors in the January 2005 private placement, sell
substantial amounts of our ordinary shares, including shares issuable upon the
exercise of outstanding warrants, convertible notes or employee options, or if
the perception exists that our shareholders may sell a substantial number of our
ordinary shares, the market price of our ordinary shares may fall. Any
substantial sales of our shares in the public market might also make it more
difficult for us to sell equity or equity related securities in the future at a
time and on terms we deem appropriate.
Risk Factors Relating to Our Operations in Israel
Conducting business in Israel entails special risks.
We are incorporated under the laws of, and our executive offices and
research and development facilities are located in, the State of Israel.
Although most of our sales are made to customers outside Israel, we are directly
influenced by the political, economic and military conditions affecting Israel.
Specifically, we could be adversely affected by any major hostilities involving
Israel, a full or partial mobilization of the reserve forces of the Israeli
army, the interruption or curtailment of trade between Israel and its present
trading partners, or a significant downturn in the economic or financial
condition of Israel.
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Since the establishment of the State of Israel in 1948, a number of
armed conflicts have taken place between Israel and its Arab neighbors, and a
state of hostility, varying from time to time in intensity and degree, has led
to security and economic problems for Israel. Since September 2000, there has
been a marked increase in violence, civil unrest and hostility, including armed
clashes, between the State of Israel and the Palestinians, and acts of terror
have been committed inside Israel and against Israeli targets in the West Bank
and Gaza. These developments have adversely affected the regional peace process,
placed the Israeli economy under significant stress, and have negatively
influenced Israel's relationship with several Arab countries. In August 2005,
Israel evacuated all Israeli settlements in the Gaza Strip and four settlements
in the West Bank. The implications of this action cannot at this time be
foreseen. Any future armed conflict, political instability or violence in the
region may have a negative effect on our business condition, harm our results of
operations and adversely affect our share price.
Furthermore, there are a number of countries that restrict business
with Israel or Israeli companies. Restrictive laws or policies of those
countries directed towards Israel or Israeli businesses had, and may in the
future continue to have, an adverse impact on our operations, our financial
results or the expansion of our business. No predictions can be made as to
whether or when a final resolution of the area's problems will be achieved or
the nature thereof and to what extent the situation will impact Israel's
economic development or our operations.
Our results of operations may be negatively affected by the obligation of our
personnel to perform military service.
Many of our executive officers and employees in Israel are obligated to
perform up to 36 days, depending on rank and position, of military reserve duty
annually and are subject to being called for active duty under emergency
circumstances. If a military conflict or war arises, these individuals could be
required to serve in the military for extended periods of time. Our operations
could be disrupted by the absence for a significant period of one or more of our
executive officers or key employees or a significant number of other employees
due to military service. Any disruption in our operations could adversely affect
our business.
Our financial results may be adversely affected by inflation and currency
fluctuations.
Since we report our financial results in dollars, fluctuations in rates
of exchange between the dollar and non-dollar currencies may have a material
adverse affect on our results of operations. A portion of our expenses are paid
in NIS (primarily salaries) and are influenced by the timing of, and the extent
to which, any increase in the rate of inflation in Israel over the rate of
inflation in the United States is not offset by the devaluation of the NIS in
relation to the dollar. We believe that the rate of inflation in Israel has not
had a material adverse effect on our business to date However, our dollar costs
in Israel will increase if inflation in Israel exceeds the devaluation of the
NIS against the dollar or if the timing of such devaluation lags behind
inflation in Israel. Over time, the NIS has been devalued against the dollar,
generally reflecting inflation rate differentials. Likewise, our operations
could be adversely affected if we are unable to guard against currency
fluctuations in the future. We do not currently engage in any currency
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hedging transactions intended to reduce the effect of fluctuations in foreign
currency exchange rates on our results of operations. We cannot guarantee that
we will enter into such transactions in the future or that such measures will
adequately protect us from serious harm due to the impact of inflation in
Israel.
We cannot guarantee continuation of government programs and tax benefits.
We have in the past received certain Israeli government grants and
currently enjoy certain tax benefits in Israel. To remain eligible for these
grants and tax benefits, we must continue to meet certain conditions, including
making some specified investments in fixed assets. If we fail to comply with
these conditions in the future, the benefits we receive could be canceled and we
may have to refund payments previously received under these programs (with
interest and linkage differentials) or pay certain taxes. We cannot guarantee
that these programs and tax benefits will be continued in the future, at their
current levels or at all. If these programs and tax benefits are ended, our
business, financial condition and results of operations could be negatively
affected.
Service and enforcement of legal process on us and our directors and officers
may be difficult to obtain.
Service of process upon our directors and officers and the Israeli
experts named herein, many of whom reside outside the United States, may be
difficult to obtain within the United States. Furthermore, since a substantial
portion of our assets, almost all of our directors, some of the officers and the
Israeli experts named in this annual report are located outside the United
States, any judgment obtained in the United States against us or these
individuals or entities may not be collectible within the United States.
There is doubt as to the enforceability of civil liabilities under the
Securities Act and the Securities Exchange Act in original actions instituted in
Israel. However, subject to certain time limitations and other conditions,
Israeli courts may enforce final judgments of U.S. courts for liquidated amounts
in civil matters, including judgments based upon the civil liability provisions
of those Acts.
Provisions of Israeli law may delay, prevent or make difficult an acquisition of
us, which could depress the price of our shares.
Provisions of Israeli corporate and tax law may have the effect of
delaying, preventing or making more difficult a merger with, or other
acquisition of, us. This could cause our ordinary shares to trade at prices
below the price for which third parties might be willing to pay to gain control
of us. Third parties who are otherwise willing to pay a premium over prevailing
market prices to gain control of us may be unable or unwilling to do so because
of these provisions of Israeli law.
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CAPITALIZATION AND INDEBTEDNESS
The table below sets forth the capitalization of our company as of June
30, 2005.
June 30, 2005
------------------------
Actual
------------------------
(in thousands)
Long-term debt........................ $ 487
Total shareholders' equity............ $ 11,493
------------------------
REASONS FOR THE OFFER AND USE OF PROCEEDS
This prospectus relates to the disposition of up to 7,409,226 of our
ordinary shares, of which 2,273,146 ordinary shares are outstanding, 3,764,651
ordinary shares are issuable upon exercise of warrants and 1,371,429 ordinary
shares are issuable upon conversion of convertible promissory notes. We will not
receive any of the proceeds from the sale by the selling shareholders of our
ordinary shares. We will, however, receive the proceeds from the exercise of the
warrants if and when they are exercised.
MARKET PRICE DATA
Our ordinary shares have traded on the NASDAQ National Market since our
initial public offering on December 17, 1992.
Quarterly Stock Information
The following table sets forth, for each of the full financial quarters
in the years indicated, the high ask and low bid prices of our ordinary shares,
as quoted on the NASDAQ National Market.
High Low
---------- -----------
2003
----
First Quarter................................ $1.05 $0.80
Second Quarter............................... $1.59 $0.90
Third Quarter................................ $1.48 $1.00
Fourth Quarter............................... $2.22 $1.05
2004
----
First Quarter................................ $3.62 $2.08
Second Quarter .............................. $3.36 $2.30
Third Quarter................................ $2.90 $1.96
Fourth Quarter............................... $2.80 $2.15
2005
----
First Quarter .............................. $3.49 $2.41
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Second Quarter............................... $3.08 $2.28
Third Quarter (through September 23).... $2.85 $2.05
Monthly Stock Information
The following table sets forth, for each of the most recent six months,
the high ask and low bid prices of our ordinary shares, as quoted on the NASDAQ
National Market.
Month High Low
----- ---------- ---------
March 2005................................... $3.49 $2.77
April 2005................................... $3.08 $2.72
May 2005..................................... $2.89 $2.50
June 2005.................................... $2.70 $2.28
July 2005.................................... $2.85 $2.15
August 2005.................................. $2.49 $2.05
SELLING SHAREHOLDERS
The registration statement of which this prospectus forms a part covers
up to 7,409,226 ordinary shares. Of such shares:
(i) 1,371,429 ordinary shares are issuable upon conversion of $2.0
million of convertible promissory notes and 480,000 ordinary shares are issuable
upon exercise of warrants, such promissory notes and warrants which were issued
to certain of the selling shareholders pursuant to a Note and Warrant Purchase
Agreement dated March 22, 2004, also described in clause (iv) below. An
additional 4,987,797 ordinary shares may be sold by certain selling shareholders
who acquired 2,043,146 ordinary shares and warrants to purchase an additional
2,944,651 ordinary shares from the Special Situations Funds in December 2003.
Such warrants have exercise prices of $1.75 and $2.00 per share, subject to
anti-dilution adjustments, and are exercisable until October 24, 2006 (as
extended by one year under the Note and Warrant Purchase Agreement).
(ii) On October 17, 2001, we entered into a Share Purchase Agreement
with certain of the Special Situations Funds, pursuant to which such Special
Situations Funds purchased an aggregate 3,846,156 ordinary shares for $5 million
or $1.30 per share. In addition, these Special Situations Funds acquired Series
A Warrants to purchase an aggregate 2,884,617 ordinary shares at an exercise
price of $1.75 per shares and Series B Warrants to purchase an aggregate 961,539
ordinary shares at a then exercise price of $2.25 per share, (subsequently
adjusted to $1.75), expiring on October 16, 2005. The warrants contain certain
anti-dilution provisions. The ordinary shares, Series A Warrants and Series B
Warrants were issued to the Special Situations Funds in reliance upon the
exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended, or the Securities Act, including the
provisions of Regulation D promulgated thereunder. We undertook to file a
registration statement with the SEC to register the resale of the ordinary
shares issued to the Special Situations Funds and the ordinary
16
shares issuable upon exercise of the Series A Warrants and Series B Warrants and
to maintain a registration statement in effect in order to allow the group to
freely sell these shares. In March 2002, this transaction was approved by our
shareholders. As of April 15, 2005, the Special Situation Funds no longer held
any of the above mentioned securities.
On December 30, 2003, Messrs. Shimon Alon, Aki Ratner, Ron Zuckerman
and other investors represented by them purchased from the Special Situations
Funds their entire holding at such time of 2,043,146 of our ordinary shares,
Series A Warrants to purchase 2,208,489 ordinary shares and Series B Warrants to
purchase 736,162 ordinary shares. On the same date of their transaction with the
Special Situations Funds, we granted such group a 30-day option to invest $2
million in our company in the form of five-year convertible promissory notes,
convertible at $1.75 per share, and warrants to purchase 450,000 of our ordinary
shares at an exercise price of $1.75 per share. On January 29, 2004 we granted
the group a seven-day extension to exercise such option and on February 5, 2004
the group elected to exercise such option. Accordingly, on March 22, 2004, we
entered into a Note and Warrant Purchase Agreement with such group, pursuant to
which we issued the group convertible promissory notes in the aggregate
principal amount of $2 million, bearing interest at the rate of 5% per annum,
payable semi-annually, the principal balance of which is convertible at any time
after issuance, in whole or in part, into our ordinary shares, at a conversion
price of $1.75 per share. The interest payable on the notes is not convertible
into ordinary shares at the discretion of the holders. The outstanding principal
balance of the note will be due and payable five years after issuance, subject
to early repayment in the event of default by us of our obligations under the
notes. In certain events of default by us of our obligations under the notes,
the holders would be entitled to convert the principal amount of the notes then
outstanding and all unpaid accrued interest thereon into our ordinary shares. In
addition, we agreed to issue to certain members of the group warrants to
purchase an aggregate of 480,000 of our ordinary shares at an exercise price of
$1.75 per share, expiring three years after their issuance. The convertible
promissory notes and the warrants contain anti-dilution provisions. In addition,
the exercise price of the Series B Warrants purchased by the group from the
Special Situations Funds was reduced to $2.00 per share, as a result of the
anti-dilution provisions contained therein, and the term of the Series A and
Series B Warrants held by the group was extended for one additional year, to
October 24, 2006. The promissory notes and warrants were issued to the group in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act, including the provisions of Regulation D promulgated
thereunder. We also undertook to file a registration statement with the SEC to
register the resale of the shares issuable upon conversion of the promissory
notes and exercise of the warrants and to maintain a registration statement in
effect in order to allow the group to freely sell these shares. In April 2004,
this transaction was approved by our shareholders.
Of the warrants to purchase 480,000 ordinary shares that we agreed to
issue to certain members of the group, warrants to purchase 15,000 ordinary
shares were issued to each of Yossi Milstein and Dov Biran, selling
shareholders, at the request of the members of the group, and one of the members
subsequently transferred warrants to purchase 10,000 ordinary shares to Yossi
Avraham, a selling shareholder, for no consideration, in October 2004.
(iii) An additional 40,000 ordinary shares are issuable pursuant to
warrants issued in February 2004 to Gaus Investments Ltd. and R.4.B Ltd., both
of which are Israeli companies and selling shareholders, in consideration of
their introducing the foregoing group of investors to
17
us. These warrants have an exercise price of $1.92 per share and are exercisable
until February 4, 2007. These warrants were offered and sold in accordance with
Rule 903 of Regulation S under the Securities Act in a transaction to which the
registration requirements of the Securities Act do not apply.
(iv) An additional 230,000 ordinary shares may be sold by Dov Biran
Holdings Ltd., a former shareholder of Bridges For Islands Ltd., which shares
were issued or transferred to such entity in connection with an agreement we
entered into in June 2001 with former shareholders of Bridges For Islands Ltd.
In February 2000, we acquired Bridges for Islands Ltd., or Bridges for
Islands, an Israeli company which was then developing Attunity BPITM, a business
process integration solution, in consideration of $18.5 million, of which we
paid $4.5 million in cash and the balance by the issuance of 747,650 ordinary
shares and 127,350 options in exchange for the options held by the employees of
Bridges for Islands Ltd. as of the acquisition date. As part of the agreement,
we provided the shareholders of Bridges for Islands with a share price
protection guarantee, based on an issuance price of $16.00 per share, for a
one-year period. This agreement was amended in June 2001 to provide that,
instead of the price protection, we will issue, or transfer, or cause third
parties to transfer, an additional 350,000 ordinary shares to the former
shareholders of Bridges for Islands. Of the 350,000 ordinary shares, 300,000
ordinary shares were transferred to the former shareholders of Bridges for
Islands by the shareholders of Medatech Information Technology Ltd., an Israeli
company, and VisOp B.V., a Netherlands corporation, none of whom are U.S.
persons or entities. Such ordinary shares were offered and sold to the forgoing
entities in accordance with Rule 903 of Regulation S under the Securities Act in
transactions to which the registration requirements of the Securities Act do not
apply and were registered for resale under a registration statement filed with
the SEC at the time they were transferred to the former shareholders of Bridges
For Islands. The remaining 50,000 ordinary shares were issued by us to the
forgoing entities in accordance with Rule 903 of Regulation S under the
Securities Act in a transaction to which the registration requirements of the
Securities Act do not apply and we undertook to register these shares for resale
with the next registration statement to be filed by us with the SEC.
(v) An additional 300,000 ordinary shares are issuable pursuant to
warrants issued to Plenus Technologies Ltd., an Israeli venture capital fund, in
connection with a loan agreement we entered into in June 2004. Pursuant to such
agreement we secured a two-year $3.0 million credit line from Plenus at a fixed
interest rate of 6.5% per annum. The interest is payable quarterly on all
amounts drawn under the credit line. We can prepay or cancel the credit line at
any time. We pay a commitment fee of 1.0% per annum on the unutilized amount of
the credit line. As collateral for the credit line we registered a first ranking
floating charge on all our assets and a first ranking fixed charge on all our
intellectual property. We undertook to issue to Plenus five-year warrants to
purchase our ordinary shares in an amount equal to a percentage of the credit
line divided by $3.00 per share, the exercise price of the warrants (subject to
anti-dilution adjustments) (subsequently adjusted to $2.75), as follows: 20% of
the credit line if we terminate the credit line within the first year of its
initiation; 23% of the credit line if we terminate the credit line within the
second year of its initiation and we had not drawn any money from the credit
line prior to termination; and 30% of the credit line if we terminate the credit
line within the second year of its initiation and we had drawn money from the
credit line prior to
18
termination. These warrants are exercisable until June 2, 2009. These warrants
were issued to Plenus in accordance with Rule 903 of Regulation S under the
Securities Act in a transaction to which the registration requirements of the
Securities Act do not apply.
We are registering the ordinary shares in order to permit the selling
shareholders to dispose of the shares from time to time.
The following table lists the selling shareholders and other
information regarding the beneficial ownership of the ordinary shares by each of
the selling shareholders. The second and third columns list the number and
percentage of ordinary shares beneficially owned by each selling shareholder,
based on each selling shareholder's ownership of ordinary shares, the promissory
notes and warrants as of September 15, 2005, assuming full conversion of the
promissory notes and full exercise of the warrants held by each selling
shareholder on that date, without regard to any limitations on exercise.
The fourth column lists the number of ordinary shares being offered by
this prospectus by each of the selling shareholders.
In accordance with the terms of registration rights agreements with
certain of the selling shareholders, this prospectus generally, covers ordinary
shares in an amount at least equal to (i) 120% of the maximum number of ordinary
shares issuable to certain of the selling shareholders upon conversion of the
promissory notes issued to them pursuant to the Note and Warrant Purchase
Agreement, (ii) the number of ordinary shares issuable to certain of the selling
shareholders upon exercise of the warrants to purchase 480,000 of our ordinary
shares that were sold to them pursuant to the Note and Warrant Purchase
Agreement, (iii) 2,043,146 ordinary shares and the number of ordinary shares
issuable to certain of the selling shareholders upon exercise of the Series A
and Series B Warrants to purchase 2,944,651 of our ordinary shares, such shares
and warrants that were purchased by them from the Special Situations Funds, (iv)
230,000 ordinary shares that were issued to Dov Biran Holdings Ltd., a former
shareholder of Bridges For Islands Ltd., in connection with an agreement entered
into in June 2001; (v) 40,000 ordinary shares are issuable upon exercise of
warrants held by Gaus Investments Ltd and R.4.B Ltd issued in consideration for
the contribution of such parties in introducing investors to us, and (vi) up to
300,000 ordinary shares are issuable upon exercise of warrants issued to Plenus
Technologies Ltd. in connection with a Loan Agreement dated June 3, 2004;
determined as if the outstanding promissory notes and warrants were converted or
exercised in full as of the trading day immediately preceding the date this
registration statement was initially filed with the SEC and to provide for
additional amounts due under the Purchase Agreement. Depending on the actual
date that the promissory notes will be converted, and because the exercise price
of the warrants may be adjusted, the number of ordinary shares that will
actually be issued may be more or less than the number of ordinary shares being
offered by this prospectus.
The fifth and sixth columns of the following table assume the sale of
all of the ordinary shares offered by the selling shareholders pursuant to this
prospectus. The selling shareholders may sell all, some or none of their
ordinary shares in this offering.
19
Percentage of
Number of Ordinary Percentage of Maximum Number of Number of Ordinary
Shares Ordinary Shares Ordinary Shares Ordinary Shares Shares
Beneficially Owned Beneficially Offered Pursuant Beneficially Beneficially
Name of Selling Prior to Owned Prior to to this Owned After Owned After
Shareholder Offering Offering Prospectus Offering Offering
-------------------------- -------------------- ------------------- -------------------- ------------------- ----------------
Shimon Alon............ 1,320,098 (1) 7.32% 1,320,098 - -
Ron Zuckerman.......... 1,270,098 (2) 7.06% 1,270,098 - -
Aki Ratner............. 698,740 (3) 3.97% 698,740 - -
GF Capital Management &
Advisors, LLC ....... 702,057 (4) 4.00% 702,057 - -
Peter Luggen........... 468,040 (5) 2.69% 468,040 - -
Sharon
Kotlicki-Pery........ 585,049 (6) 3.35% 585,049 - -
Genia Kotlicki......... 292,523 (7) 1.69% 292,523 - -
Avishai Kotlicki....... 292,523 (8) 1.69% 292,523 - -
Barrossa Finance Ltd... 1,170,098 (9) 6.53% 1,170,098 - -
Yossi Milstein......... 15,000 (10) * 15,000 - -
Dov Biran Holdings Ltd.
(11)................. 863,705 (11) 5.05% 230,000 633,705 3.7%
Dov Biran.............. 15,015 (12) * 15,000 15 *
Gaus Investments Ltd... 131,000 (13) * 20,000 111,000 *
R.4.B Ltd. ............ 20,000 (14) * 20,000 - -
Plenus Technologies
Ltd.................. 300,000 (15) 1.73% 300,000 - -
Yossi Avraham.......... 10,000 (16) * 10,000 - -
----------------
* Less than 1%
(1) Includes 252,343 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 150,000 ordinary shares
issuable upon the exercise of currently exercisable warrants and 406,362
ordinary shares issuable upon exercise of currently exercisable Series A
Warrants and 135,454 ordinary shares issuable upon currently exercisable
of Series B Warrants.
(2) Includes 252,343 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 100,000 ordinary shares
issuable upon the exercise of currently exercisable warrants and 406,363
ordinary shares issuable upon exercise of currently exercisable Series A
Warrants and 135,454 ordinary shares issuable upon currently exercisable
of Series B Warrants.
(3) Includes 109,716 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 190,000 ordinary shares
issuable upon the exercise of currently exercisable warrants and 176,679
ordinary shares issuable upon exercise of currently exercisable Series A
Warrants and 58,893 ordinary shares issuable upon currently exercisable
of Series B Warrants.
(4) Includes 151,405 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 243,817 ordinary shares
issuable upon exercise of currently exercisable Series A Warrants and
81,272 ordinary shares issuable upon currently exercisable of Series B
Warrants. Mr. Gary L. Fuhrman is the principal owner of GF Capital
Management & Advisors, LLC and has controlling responsibility for the
voting and disposition of the shares, and the shares
20
issuable under the promissory note and warrants, held by GF Capital
Management & Advisors, LLC. GF Capital Management Advisors, LLC has
informed us in writing that it is an affiliate of a registered
broker-dealer. GF Capital Management Advisors, LLC has further informed
us in writing that it acquired its ordinary shares, and its securities
exercisable or convertible into ordinary shares, that are being
registered under the registration statement of which this prospectus
forms a part, in the ordinary course of business and that at the time it
purchased such shares and securities it did not have any agreements,
plans or understandings, directly or indirectly, with any person to
distribute the shares or securities.
(5) Includes 100,937 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 162,545 ordinary shares
issuable upon exercise of currently exercisable Series A Warrants and
54,182 ordinary shares issuable upon currently exercisable of Series B
Warrants.
(6) Includes 126,172 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 203,181 ordinary shares
issuable upon exercise of currently exercisable Series A Warrants and
67,727 ordinary shares issuable upon currently exercisable of Series B
Warrants.
(7) Includes 63,085 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 101,590 ordinary shares
issuable upon exercise of currently exercisable Series A Warrants and
33,863 ordinary shares issuable upon currently exercisable of Series B
Warrants.
(8) Includes 63,085 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 101,590 ordinary shares
issuable upon exercise of currently exercisable Series A Warrants and
33,863 ordinary shares issuable upon currently exercisable of Series B
Warrants.
(9) Includes 252,343 ordinary shares issuable upon the conversion of a
currently convertible promissory note and 406,362 ordinary shares
issuable upon exercise of currently exercisable Series A Warrants and
135,454 ordinary shares issuable upon currently exercisable of Series B
Warrants. Mr. Ryan Rudolph exercises sole voting and dispositive powers
with respect to the shares, and the shares issuable under the promissory
note and warrants, held by Barrossa Finance Ltd.
(10) Includes 15,000 ordinary shares issuable upon the exercise of currently
exercisable warrants.
(11) Dr. Dov Biran and his wife, Mrs. Penina Biran, exercise shared voting
and dispositive powers with respect to the shares held by Dov Biran
Holdings Ltd.
(12) Includes 15,000 ordinary shares issuable upon the exercise of currently
exercisable warrants.
(13) Includes 20,000 ordinary shares issuable upon the exercise of currently
exercisable warrants at $1.92 per share. Mr. David Dafni exercises sole
voting and dispositive powers with respect to the shares issuable under
the warrants held by Gaus Investments Ltd.
(14) Issuable upon the exercise of currently exercisable warrants at $1.92 per
share. Mr. Gilad Friedhaber exercises sole voting and dispositive powers
with respect to the shares issuable under the warrants held by R.4.B Ltd.
(15) Issuable upon the exercise of warrants currently exercisable at a then
exercise price of $3.00 per share (subsequently adjusted to $2.75). An
investment committee exercises voting and dispositive powers with respect
to the shares issuable under the warrants held by Plenus Technologies
Ltd. The current members of the investment committee are Aharon Dovrat,
Shlomo
21
Dovrat, Oded Exelrod, Edna Peres-Lahish, Arie Savir, Moti Weiss, Ruth
Simha and Eylon Pinchas.
(16) Issuable upon the exercise of currently exercisable warrants at $1.75
per share.
OFFER STATISTICS, EXPECTED TIME TABLE AND PLAN OF DISTRIBUTION
We are registering the ordinary shares offered hereby on behalf of the
selling shareholders. As used herein, "selling shareholders" includes donees,
pledgees, transferees or other successors-in-interest selling shares received
after the date of this prospectus from a named selling shareholder as a gift,
pledge, partnership distribution or other transfer. All costs, expenses and fees
in connection with the registration of the shares offered by this prospectus
will be borne by our company, other than brokerage commissions and similar
selling expenses, if any, attributable to the sale of shares offered hereby
which will be borne by the selling shareholders. Sales of the shares offered
hereby may be effected by selling shareholders from time to time in one or more
types of transactions (which may include block transactions) on the NASDAQ
National Market at prevailing market prices, in the over-the-counter market, in
negotiated transactions, through publicly or privately negotiated put or call
options transactions relating to the shares offered hereby, through short sales
of the shares offered hereby (including the closing of any open short position),
or a combination of such methods of sale, at market prices prevailing at the
time of sale, or at negotiated prices. Such transactions may or may not involve
brokers or dealers. The selling shareholders have advised us that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinating broker acting in connection with the
proposed sale of the shares offered hereby by the selling shareholders.
The selling shareholders may enter into hedging transactions with
regard to the shares offered hereby. In connection with such transactions the
counterparties to such transactions may engage in short sales of the shares
offered hereby or of securities convertible into or exchangeable for such shares
in the course of hedging positions they assume with selling shareholders. The
selling shareholders may also enter into other transactions which require the
delivery of the shares offered by this prospectus, which shares such
counterparties may resell pursuant to this prospectus (as amended or
supplemented, if necessary, to reflect such transaction).
The selling shareholders may effect these transactions by selling the
shares offered hereby directly to purchasers or to or through broker-dealers,
which may act as agents or principals. Such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
selling shareholders and/or the purchasers of the shares offered hereby for whom
such broker-dealers may act as agents or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary brokerage commissions).
The selling shareholders and any broker-dealers that act in connection
with the sale of the shares offered hereby might be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, and any commissions
received by such broker-dealers and any profit on the disposition of the shares
offered hereby sold by them while acting as principals might be deemed
22
to be underwriting discounts or commissions under the Securities Act. We have
agreed to indemnify each selling shareholder against certain liabilities,
including liabilities arising under the Securities Act. The selling shareholders
may agree to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the shares offered hereby against certain
liabilities, including liabilities arising under the Securities Act.
Because selling shareholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the selling shareholders
will be subject to the prospectus delivery requirements of the Securities Act.
We have informed the selling shareholders that the anti-manipulative provisions
of Regulation M promulgated under the Exchange Act may apply to their sales in
the market.
Selling shareholders also may resell all or a portion of the shares
offered hereby in open market transactions in reliance upon Rule 144 under the
Securities Act, provided they meet the criteria and conform to the requirements
of Rule 144 or another exemption under the Securities Act.
Upon our being notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
offered hereby through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
o the name of each such selling shareholder and of the
participating broker-dealer(s);
o the number of shares involved;
o the initial price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
o that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and
o other facts material to the transaction.
In addition, upon our being notified by a selling shareholder that a
donee, pledgee, transferee or other successor-in-interest intends to sell more
than 500 shares, a supplement to this prospectus will be filed.
23
EXPENSES ASSOCIATED WITH THE REGISTRATION
We have agreed to bear all expenses relating to the registration of the
ordinary shares registered pursuant to the registration statement of which this
prospectus is a part. We estimate these expenses to be approximately $64,000,
which include the following categories of expenses:
SEC registration fee..................................... $ 2,073.91
Printing and photocopying fees........................... 1,000.00
Legal fees and expenses ................................. 40,000.00
Accounting fees and expenses............................. 20,000.00
Transfer agent and registrar fees and expenses........... 500.00
Miscellaneous expenses .................................. 426.09
-----------
Total Expenses................................. $ 64,000.00
===========
FOREIGN EXCHANGE CONTROLS AND OTHER LIMITATIONS
Israeli law and regulations do not impose any material foreign exchange
restrictions on non-Israeli holders of our ordinary shares. In May 1998, a new
"general permit" was issued under the Israeli Currency Control Law, 1978, which
removed most of the restrictions that previously existed under such law, and
enabled Israeli citizens to freely invest outside of Israel and freely convert
Israeli currency into non-Israeli currencies.
Non-residents of Israel who purchase our ordinary shares will be able
to convert dividends, if any, thereon, and any amounts payable upon our
dissolution, liquidation or winding up, as well as the proceeds of any sale in
Israel of our ordinary shares to an Israeli resident, into freely repatriable
dollars, at the exchange rate prevailing at the time of conversion, provided
that the Israeli income tax has been withheld (or paid) with respect to such
amounts or an exemption has been obtained.
EXPERTS
Our consolidated financial statements as of December 31, 2004 and 2003
and as of December 31, 2003 and 2002, and for each of the three years in the
periods ended December 31, 2004 and December 31, 2003, respectively, appearing
in our Annual Report on Form 20-F for the year ended December 31, 2004, and
incorporated in this prospectus by reference, have been audited by Kost Forer
Gabbay & Kasierer, a Member of Ernst & Young Global, independent registered
public accounting firm, as set forth in their report thereon included herein and
incorporated in this prospectus by reference. These consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
24
LEGAL MATTERS
The law firm of Efrati, Galili & Co. of Tel Aviv, Israel, has passed on
the validity of the ordinary shares offered hereby.
MATERIAL CHANGES
Except as otherwise described in our Annual Report on Form 20-F for the
fiscal year ended December 31, 2004 and in our Reports on Form 6-K filed under
the Exchange Act and incorporated by reference herein, no reportable material
changes have occurred since December 31, 2004.
WHERE YOU CAN BEST FIND MORE INFORMATION; INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE
This prospectus is a part of two registration statements on Form F-3,
Registration Nos. 333-14140 and 333-119157, which we filed with the SEC under
the Securities Act of 1933. As permitted by the rules and regulations of the
SEC, this prospectus does not contain all of the information contained in the
registration statements and the exhibits and schedules thereto. As such we make
reference in this prospectus to the registration statements and to the exhibits
and schedules thereto. For further information about us and about the securities
we hereby offer, you should consult the registration statements and the exhibits
and schedules thereto. You should be aware that statements contained in this
prospectus concerning the provisions of any documents filed as an exhibit to the
registration statements or otherwise filed with the SEC are not necessarily
complete, and in each instance reference is made to the copy of such document so
filed. Each such statement is qualified in its entirety by such reference.
We file annual and special reports and other information with the SEC
(Commission File Number 000-20892). These filings contain important information
which does not appear in this prospectus. For further information about us, you
may read and copy these filings at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the public reference room by calling the SEC at 1-800-SEC-0330, and
may obtain copies of our filings from the public reference room by calling (202)
942-8090.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to other documents which we have filed or will file with the SEC.
We are incorporating by reference in this prospectus the documents listed below
and all amendments or supplements we may file to such documents, as well as any
future filings we may make with the SEC on Form 20-F under the Exchange Act
before the time that all of the securities offered by this prospectus have been
sold or de-registered.
o Our Annual Report on Form 20-F for the fiscal year ended December
31, 2004;
o Our Reports on Form 6-K submitted to the SEC on January 31, 2005,
April 1, 2005, April 20, 2005, June 30, 2005, July 28, 2005 and
August 31, 2005; and
25
o The description of our ordinary shares contained in Item 1 of our
registration statement on Form 8-A filed with the SEC on December
17, 1991 under the Exchange Act and any amendment or report filed
for the purpose of updating that description.
In addition, we may incorporate by reference into this prospectus our
reports on Form 6-K filed after the date of this prospectus (and before the time
that all of the securities offered by this prospectus have been sold or
de-registered) if we identify in the report that it is being incorporated by
reference in this prospectus.
Certain statements in and portions of this prospectus update and
replace information in the above listed documents incorporated by reference.
Likewise, statements in or portions of a future document incorporated by
reference in this prospectus may update and replace statements in and portions
of this prospectus or the above listed documents.
We shall provide you without charge, upon your written or oral request,
a copy of any of the documents incorporated by reference in this prospectus,
other than exhibits to such documents which are not specifically incorporated by
reference into such documents. Please direct your written or telephone requests
to Attunity Ltd., Einstein Building, Tirat Carmel 39101, Haifa, Israel, Attn.:
Company Secretary, telephone number +972-4-855-9666. You may also obtain
information about us by visiting our website at http://www.attunity.com.
Information contained in our website is not part of this prospectus.
We are an Israeli company and are a "foreign private issuer" as defined
in Rule 3b-4 under the Securities Exchange Act of 1934. As a result, (1) our
proxy solicitations are not subject to the disclosure and procedural
requirements of Regulation 14A under the Exchange Act, (2) transactions in our
equity securities by our officers and directors are exempt from Section 16 of
the Exchange Act, and (3) until November 4, 2002, we were not required to make,
and did not make, our SEC filings electronically, so that those filings are not
available on the SEC's website. However, since that date, we have been making
all required filings with the SEC electronically, and these filings are
available over the Internet at the SEC's website at http://www.sec.gov.
ENFORCEABILITY OF CIVIL LIABILITIES
Service of process upon us and our directors and officers and the
Israeli experts named in this prospectus, many of whom reside outside the United
States, may be difficult to obtain within the United States. Furthermore, since
a substantial portion of our assets, almost all of our directors, some of the
officers and the Israeli experts are located outside the United States, any
judgment obtained in the United States against us or these individuals or
entities may not be collectible within the United States.
There is doubt as to the enforceability of civil liabilities under the
Securities Act and the Securities Exchange Act in original actions instituted in
Israel. However, subject to certain time limitations and other conditions,
Israeli courts may enforce final judgments of U.S. courts for liquidated amounts
in civil matters, including judgments based upon the civil liability provisions
of those Acts.
26
We have irrevocably appointed our subsidiary, Attunity Inc. as our
agent to receive service of process in any action against us in the state and
federal courts sitting in the City of New York, Borough of Manhattan arising out
of this offering or any purchase or sale of securities in connection therewith.
We have not given consent for this agent to accept service of process in
connection with any other claim.
27
ATTUNITY LTD
7,409,226 ORDINARY SHARES
----------------------------
PROSPECTUS
----------------------------
You should rely only on the information
incorporated by reference or provided in this
prospectus. We have not authorized anyone to
provide you with different information. We
are not making any offer to sell or buy any
of the securities in any state where the
offer is not permitted. You should not assume
that the information in this prospectus is
accurate as of any date other than the date
that appears below.
September 26, 2005