-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pqo+vDfiZQeymPlnWsTE3yxATe+Ks/uXCi1e0qmILe0qawa+aX+ry2tVsdZGxLIS Qo+EZiZ0mY6K2rcU4RKllQ== 0000891618-99-003778.txt : 19990816 0000891618-99-003778.hdr.sgml : 19990816 ACCESSION NUMBER: 0000891618-99-003778 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VERSANT CORP CENTRAL INDEX KEY: 0000865917 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943079392 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: SEC FILE NUMBER: 333-76045 FILM NUMBER: 99689251 BUSINESS ADDRESS: STREET 1: 6539 DUMBARTON CIRCLE CITY: FREMONT STATE: CA ZIP: 94555 BUSINESS PHONE: 5107891500 MAIL ADDRESS: STREET 1: 6539 DUMBARTON CIRCLE CITY: FREMONT STATE: CA ZIP: 94555 FORMER COMPANY: FORMER CONFORMED NAME: VERSANT OBJECT TECHNOLOGY CORP DATE OF NAME CHANGE: 19960428 POS AM 1 POST-EFFECTIVE AMENDMENT NO. 1 1 As filed with the Securities and Exchange Commission on August 13, 1999 Registration No. 333-76045 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- POST-EFFECTIVE AMENDMENT NO. 1 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- VERSANT CORPORATION (Exact name of Registrant as specified in its charter) CALIFORNIA 94-3079392 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 6539 DUMBARTON CIRCLE FREMONT, CALIFORNIA 94555 (510) 789-1500 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) -------------------- GARY RHEA CHIEF FINANCIAL OFFICER VERSANT CORPORATION 6539 DUMBARTON CIRCLE FREMONT, CALIFORNIA 94555 (510) 789-1500 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------- Copies to: BARRY J. KRAMER, ESQ. JAMES GIVEN, ESQ. FENWICK & WEST LLP TWO PALO ALTO SQUARE, SUITE 800 PALO ALTO, CALIFORNIA 94306 (650) 494-0600 -------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] (1) Estimated solely for the purpose of calculating the amount of the registration fee, pursuant to Rule 457(c) under the Securities Act, based on the average of the high and low prices of the Common Stock on the Nasdaq National Market on April 6, 1999. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ================================================================================ 2 Registration No. 333-76045 - -------------------------------------------------------------------------------- PROSPECTUS - -------------------------------------------------------------------------------- 3,175,586 SHARES VERSANT CORPORATION COMMON STOCK ------------------- OUR COMMON STOCK CURRENTLY TRADES ON THE NASDAQ SMALLCAP MARKET. LAST REPORTED SALE PRICE ON AUGUST 12, 1999: $2.15 PER SHARE. TRADING SYMBOL: VSNT or VSNTC ------------------- THE OFFERING o The shares offered in this prospectus will be sold from time to time at then prevailing market prices, at prices relating to market prices or at negotiated prices. We are not aware of any underwriting discounts or commissions in connection with this offering. o All of the shares of common stock offered in this prospectus are being sold by the selling security holders named on page 12 of this prospectus. We will not receive any of the proceeds from the sale of these shares. These shares are being offered on a continuous basis under Rule 415 of the Securities Act until at least December 28, 2002 or the earlier sale of the shares offered hereby. ------------------- THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. PLEASE CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING SECURITY HOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. - -------------------------------------------------------------------------------- THE DATE OF THIS PROSPECTUS IS AUGUST 13, 1999. 3 PROSPECTUS SUMMARY We issued the shares that may be offered using this prospectus in three transactions in 1998. In July 1998, we acquired Soft Mountain S.A. and issued 245,586 shares of our common stock to the shareholders of Soft Mountain. These Soft Mountain selling security holders may offer some or all of these shares using this prospectus. In October 1998, we issued a $3.6 million convertible secured subordinated promissory note to Vertex Technology Fund Ltd. This note was convertible into 1,880,000 shares of our common stock, at a rate of $1.925 per share. In December 1998, we issued 700,000 shares of our common stock and warrants to purchase 350,000 shares of our common stock to three Special Situations Funds. The warrants may be exercised for common stock at an exercise price of $2.25 per share. The Special Situations Funds may offer some or all of their common stock, including shares that may be issued upon exercise of their warrants, using this prospectus. In July 1999, we agreed to modify the terms of the Vertex convertible note. The note, including accrued interest, has been converted into 902,946 shares of Series A Preferred Stock. This preferred stock is convertible into 1,805,892 shares of our common stock, subject to customary adjustments for stock splits and dividends and other corporate restructurings. Vertex may offer some or all of these 1,805,892 conversion shares using this prospectus. ---------------------- TABLE OF CONTENTS ---------------------- Prospectus Summary...................... 2 Selling Security Holders................ 12 Risk Factors............................ 3 Plan of Distribution.................... 13 Use of Proceeds......................... 10 Legal Matters........................... 14 Dividend Policy......................... 10 Experts................................. 14 Where You Can Find More Information..... 10
2 4 RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information in this prospectus before investing in our common stock. Our business and results of operations could be seriously harmed by any of the following risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. RISKS RELATED TO OUR BUSINESS WE HAVE LIMITED WORKING CAPITAL. We incurred a significant reduction in working capital in 1998. To date, we have not achieved business volume sufficient to restore profitability and a positive cash flow. We operated at a net loss of $20 million in 1998 and since December 31, 1998 have continued to experience operating losses on a year to date basis. Our available cash and credit facilities may not be sufficient to fund our operations and successfully implement our business plan, part of which consists of pursuing potential strategic relationships, acquisitions of companies, products and technologies. Also, the Soft Mountain Selling Security Holders have demanded that we repurchase for approximately $1.1 million the 245,586 shares of the Company's stock issued to them in connection with the Company's purchase all Soft Mountain shares as a result of the Company's inability to register the shares by December 31, 1998. OUR COMMON STOCK MAY BE DELISTED FROM NASDAQ. Our common stock was listed on the Nasdaq National Market until July 19, 1999. On this date, our common stock was listed on the Nasdaq SmallCap Market on a conditional basis. To remain listed on Nasdaq SmallCap Market, Nasdaq must be satisfied that we were profitable for the quarter ending June 30, 1999 and that we have net tangible assets of at least $5.4 million after conversion of the Vertex note and raising an additional $2.5 million through the issuance of preferred stock. We believe that we will comply with the Nasdaq SmallCap listing requirements, but we cannot be certain until confirmation is received from Nasdaq after the filing of our quarterly report on Form 10-Q for the quarter ending June 30, 1999. To maintain our listing on the Nasdaq SmallCap Market, there are several requirements applicable to all issuers listed there, including a minimum bid price of one dollar per share and net tangible assets of $2 million. We might not meet these or other continued listing requirements in the future. If our common stock were delisted, we may not be able to satisfy the higher requirements for relisting on either the Nasdaq National or Nasdaq SmallCap Market. If we were delisted, trading in our common stock may be conducted in the over-the-counter market in what are commonly referred to as the "pink sheets". As a result, investors would find it more difficult to buy, sell or quote our common stock. OUR EXISTING DEBT BURDEN IS SUBSTANTIAL. At June 30, 1999, we had the following outstanding borrowings: (1) $1.6 million under a bank revolving loan, which expires on June 30, 2000; (2) $1.5 million under a bank term loan, which expires on March 18, 2001; and (3) $3.6 million under our convertible subordinated secured promissory note, which is due in October 2001. The bank revolving line of credit and term loan have been amended effective for the quarter ending June 30, 1999. The line of credit will expire June 30, 2000 and has substantially modified financial covenants. Its interest rate has been increased to 2 percent over the lender's base rate (currently 7.75%). The term loan interest rate has been increased to 2.5% over the lender's base rate. Its financial covenants were also modified. The $3.6 million convertible secured promissory note and accrued interest was converted into preferred stock in July 1999. The preferred stock is convertible into 1,805,892 shares of our common stock. In connection with this conversion, approximately $2.5 million was raised through the issuance of additional shares of preferred stock that is convertible into 1,173,706 additional shares of our common stock. The preferred shares have a participating liquidation preference equal to 150% of the amount paid increasing by 50% per year for the next two years. Each preferred share votes like one common share until conversion. The preferred stock holders also received five year warrants to purchase 1,489,799 shares of our common stock for an initial exercise price of $2.13/share. OWNERSHIP OF OUR EQUITY HAS BECOME CONCENTRATED as a result of the Vertex note conversion and raising of additional equity. According to Vertex filings with the SEC, if Vertex converted its preferred shares and exercised all of its warrants it would own approximately 21% of our common stock (assuming 10,151,277 outstanding shares prior to such conversion and exercise and no other conversions or exercises). Affiliates of Vertex own 5.8% of our common stock (assuming 10,151,277 shares outstanding). Another affiliate of Vertex invested approximately $1,000,000 in preferred shares and warrants in July 1999. If all of these preferred shares were converted and all warrants exercised, this Vertex affiliate would own 6.5% of our common shares (assuming 10,151,277 shares outstanding and no other conversions or exercises) based on recent filings by Vertex and its affiliates with the SEC. Additionally, another investor in the preferred stock was introduced to us by Vertex. Its 176,056 shares of preferred stock and equal number of warrants would convert into 528,168 shares of our common stock (or 4.9% of our common shares assuming 10,151,277 shares outstanding prior to exercise or conversion and no other exercises or conversions). Prior to conversion and exercise, each preferred share votes like one common share and warrants do not vote. Therefore, prior to conversion Vertex and the security holders referred to above hold securities representing 16.4% of the total votes (assuming 10,151,277 outstanding shares). Vertex has not expressed interest in controlling the Company but is in a position to influence its management. Vertex and the other preferred stock holders have agreed not to acquire more than an additional 100,000 shares without our approval while such investor owns more than 5% of the Company. Such concentration of ownership may adversely effect the liquidity of the common stock. OUR REVENUE LEVELS ARE UNPREDICTABLE. Our revenue has fluctuated dramatically on a quarterly and annual basis, and we expect this trend to continue. These dramatic fluctuations result from a number of factors, including: (1) the lengthy and highly consultative sales cycle associated with our products (2) uncertainty regarding the timing and scope of customer deployment schedules of applications based on the Versant ODBMS (3) fluctuations in domestic and foreign demand for our products and services, particularly in the telecommunications and financial services markets (4) the impact of new product introductions by us and our competitors (5) our unwillingness to significantly lower prices to meet prices set by our competitors (6) the effect of publications of opinions about us and our competitors and their respective products (7) customer order deferrals in anticipation of product enhancements or new product offerings by us or our competitors (8) potential customers unwillingness to invest in our products given our financial instability 3 5 A number of other factors make it impossible to predict our operating results for any period prior to the end of that period. We ship our software to a customer at receipt of the customer's order, and consequently, we have little order backlog. As a result, license revenue in any quarter is substantially dependent on orders booked and shipped in that quarter. Historically, we record most of our revenue and book most of our orders in the third month of each quarter, with a concentration of such revenue and orders in the last few days of the quarter. We expect this trend to continue. Many of these factors are beyond our control. WE MAY NOT BE ABLE TO MANAGE COSTS GIVEN THE UNPREDICTABILITY OF OUR REVENUE. We expended significant resources in 1997 and 1998 to build our infrastructure and hire personnel, before reductions, particularly in the services and sales and marketing sectors, in expectation of higher revenue growth than actually occurred. Although we have restructured our operations to reduce operating expenses, we continue to plan for revenue growth in 1999 compared to 1998. Consequently, we will continue to incur a relatively high level of fixed expenses. Although, in January 1999, we reduced significantly our worldwide headcount and implemented controls on spending in order to achieve expense reductions, if expense controls are not achieved or planned revenue growth does not materialize, our business, financial condition and results of operations will be materially harmed. WE RELY ON TELECOMMUNICATIONS AND FINANCIAL SERVICES MARKETS CHARACTERIZED BY COMPLEXITY AND INTENSE COMPETITION. Historically, we have been highly dependent upon the telecommunications industry and are becoming increasingly dependent upon the financial services market. Our success in the telecommunications and financial service markets is dependent, in part, on our ability to compete with alternative technology providers and on whether our customers and potential customers believe we have the expertise necessary to provide effective solutions in these markets. If these conditions, among others, are not satisfied, we may not be successful in generating additional opportunities in these markets. The need for and type of applications and commercial products for the telecommunications and financial services markets is continuing to develop, is rapidly changing, and is characterized by an increasing number of new entrants whose products may compete with those of ours. As a result, we cannot predict the future growth of these markets, and demand for object-oriented databases in these markets may not develop or be sustainable. We also may not be successful in attaining a significant share of these markets. In addition, organizations in these markets generally develop sophisticated and complex applications that require substantial customization of our products. Although we seek to generate consulting revenue in connection with these customization efforts, we have offered, and may, under certain circumstances continue to offer, free or reduced price consulting. This practice has impacted, and will continue to impact, our service margins and will require that we maintain a highly skilled service infrastructure with specific expertise in these markets. OUR PRODUCTS HAVE A LENGTHY SALES CYCLE. Our sales cycle, which varies substantially from customer to customer, often exceeds nine months and can sometimes extend to a year or more. Due in part to the strategic nature of our products and associated expenditures, potential customers are typically cautious in making product acquisition decisions. The decision to license our products generally requires us to provide a significant level of education to prospective customers regarding the uses and benefits of our products, and we must frequently commit no-fee pre-sales support resources, such as assistance in performing bench marking and application prototype development. Because of the lengthy sales cycle and the relatively large average dollar size of individual licenses, a lost or delayed sale could have a significant impact on our operating results for a particular period. Although we seek to develop relationships with best-of-class value-added resellers in the telecommunications and financial services markets in order to strengthen our indirect sales activity, we have not yet entered into such relationships and may not be successful in developing such relationships. In addition, our value-added resellers may be subject to a lengthy sales cycle for our products. OUR CUSTOMER CONCENTRATION INCREASES THE POTENTIAL VOLATILITY OF OUR OPERATING RESULTS. Notwithstanding our recent efforts to develop new customers, typically through the use of relatively small licenses, a significant portion of our total revenue has been, and we believe will continue to be, derived from a limited number of orders placed by large organizations. The timing of such orders and their fulfillment has caused, and is likely to cause in the future, material fluctuations in our operating results, particularly on a quarterly basis. In addition, our major customers tend to change from year to year. The loss of any one or more of our major customers or our inability to replace a customer that has become less significant in a given year with a different major customer could have a material adverse effect on our business. WE DEPEND ON OUR INTERNATIONAL OPERATIONS. A significant portion of our revenue is derived from customers located outside the United States. This requires that we operate internationally and maintain a significant presence in international markets. However, our international operations are subject to a number of risks. These risks include: 4 6 (1) longer receivable collection periods (2) changes in regulatory requirements (3) dependence on independent resellers (4) multiple and conflicting regulations and technology standards (5) import and export restrictions and tariffs (6) difficulties and costs of staffing and managing foreign operations (7) potentially adverse tax consequences (8) foreign exchange fluctuations (9) the burdens of complying with a variety of foreign laws (10) the impact of business cycles and economic instability outside the United States, including the current economic instability in Asia. WE MUST DEFEND AGAINST SECURITIES LITIGATION. We and certain of our present and former officers and directors were named as defendants in four class action lawsuits filed in the United States District Court for the Northern District of California, filed on January 26, 1998, February 5, 1998, March 11, 1998 and March 18, 1998, respectively. On June 19, 1998, a consolidated amended complaint was filed in this court by the lead plaintiff named by the court. The amended complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act, and Securities and Exchange Commission Rule 10b-5 promulgated under the Exchange Act, in connection with public statements about our expected financial performance. The complaint seeks an unspecified amount of damages. We vigorously deny the plaintiff's claims and have moved to dismiss the allegations. The plaintiff has filed a response to our motion to dismiss, and we have filed an opposition to plaintiff's response. The motion to dismiss was submitted to the court for consideration on November 13, 1998, and the court has not yet issued a decision. Securities litigation can be expensive to defend, consume significant amounts of management time and result in adverse judgments or settlements that could have a material adverse effect on our results of operations and financial condition. OUR STOCK PRICE IS VOLATILE. Our revenue, operating results and stock price have been and may continue to be subject to significant volatility, particularly on a quarterly basis. We have previously experienced significant shortfalls in revenue and earnings from levels expected by securities analysts and investors, which has had an immediate and significant adverse effect on the trading price of our common stock. This may occur again in the future. Additionally, as a significant portion of our revenue often occurs late in the quarter, we may not learn of revenue shortfalls until late in the quarter, which could result in an even more immediate and adverse effect on the trading price of our common stock. OUR BUSINESS MAY BE HARMED BY YEAR 2000 PROBLEMS. We and our customers and suppliers are aware and concerned about the risks associated with Year 2000 computer issues. If our systems do not recognize the correct date when the year changes to 2000, there could be a material adverse effect on our operations. We are at risk from both internal and external areas. We have categorized our risk into the following categories: (1) internal systems required to operate our business (e.g. operational, financial, product development, safety and environmental controls); (2) external supplier systems that are necessary to support our business requirements (e.g. raw materials, supplies, shipping and delivery systems, banking, payroll and government systems); and (3) product warranty exposure with our customer base. We are currently evaluating our exposure in all these areas. We have been reviewing our facility, financial and operating systems to identify and assess the requirements to bring hardware systems and software applications to Year 2000 compliance. We expect to conclude our estimate of exposure to Year 2000 problems, associated costs and required correction plans by the end of August 1999 and to correct any Year 2000 problems by October 31, 1999. We have not identified any alternative remediation plans in the event Year 2000 issues can not be adequately corrected. We will define any alternative plans if and when we discover systems that can not be made Year 2000 compliant. If implementation of upgrade or replacement systems is delayed or if significant new non-compliance issues are discovered, our operations could be materially adversely affected. We have and will continue to make certain investments in software applications and systems to ensure that we are Year 2000 compliant with respect to our internal systems. In particular, our purchase of $9 million of property and equipment during 1997 and 1998 included substantial investments in management and information systems designed to be Year 2000 compliant. 5 7 We have contracted with an outside independent consulting firm to provide internal Year 2000 equipment testing and consulting services to assist us in the process of defining and implementing a Year 2000 compliance project. This compliance project includes the following phases:
Expected completion Name of phase: Description: Status: date: - -------------- ------------ ------- ---------- Awareness and Educate the company on the Year 2000 In progress April 1999 Assessment Phase project, the potential problems associated with this date issue, inventory our systems and products that require compliance testing. Testing and Test our systems and products and identify Begins March August 1999 Validation Phase the non-compliant areas, develop remediation 1999 plans, map the conversion process to correct non-compliant areas and validate the changes that need to be made to correct non-compliant areas. Implementation and Convert non-compliant areas with compliant Begins August October Certification Phase products (hardware or software), verify that 1999 1999 all intended changes have been made successfully and that all planned Year 2000 compliance changes have been made. Maintenance Phase This phase puts processes and procedures in Begins December place to minimize the likelihood that Year 1999 2000 compliance problems will be November 1999 reintroduced into the compliant systems and products.
Status: Awareness and Assessment Phase: We have written and published an awareness statement to educate our employees, vendors and customers about the Year 2000 issues and potential problems associated with the Year 2000 rollover problem and what effect this will have on our company and customers. We have published a statement about our products, testing procedures used and their Y2k compliance. We have published these statements internally to our employees and management and will be distributing them via our web site "versant.com" and by mail to certain vendors and customers by the end of July 1999. We have identified all internal systems (products and software) that need to be tested for Year 2000 compliance. Testing and Validation Phase: We have tested our personal computers and servers used by our information management systems, engineering development teams and employees to complete their daily work assignments. The results were 3 personal computers and two servers failed our Year 2000 test. We intend to replace both servers and the 486 system with existing Y2k compliant inventory, and upgrade the remaining two with bios upgrades if possible, or replace same. In the process of testing our internal business software programs we have determined that certain operating systems and financial programs need to be upgraded with Y2k patches to be Y2k compliant. We have budgeted $50,000 for the upgrade process (software and labor) and plan to complete the upgrades by October 1999. We will be testing or seeking validation with respect to Year 2000 compliance regarding external providers for phone service, security service, utility service, internet service and air conditioning service. We will then develop remediation plans to correct non-compliant systems. In addition to the internal testing, evaluation and remediation project, we will implement a program that will query our suppliers and providers of third-party technology that may be integrated with our products to determine if the suppliers operations', products and services are Year 2000 compliant. We sent these questionnaires to our third party providers and key suppliers at the end of June 1999 and will conclude our review by the end of August 1999. Where practical, we will take the necessary actions to reduce our exposure to suppliers that are not Year 2000 compliant by finding alternative suppliers. However, there may be critical suppliers that cannot be substituted and this could have a material adverse effect on our operations. We believe our products are Year 2000 compliant. However, not every customer situation can be anticipated, especially in areas that involve third party products. Extensive testing has been performed on our products and additional testing will continue as we become aware of our customer's Year 2000 needs and issues. We may see an increase in customer demands for warranty service. This may create additional service costs that can not be recovered. In addition, if our products are not Year 2000 compliant, we could face litigation regarding Year 2000 compliance issues. 6 8 The process to insure our systems and our supplier systems are Year 2000 compliant is expected to be significantly completed by October 31, 1999, with testing to be done through the remainder of 1999. In addition, we could face reduced demand for our products through 1999 if customers focus on purchasing solutions to their Year 2000 problems rather than purchasing our products, which are not designed to solve Year 2000 problems. Customer's purchasing plans could be affected by the Year 2000 problem if they need to expend significant resources to correct their existing systems. This situation may result in reduced funds available to implement solutions based upon our products. In addition, some customers may defer the license of our products until after the Year 2000 while they complete remediation and testing of their current systems to ensure Year 2000 compliance. A decrease in demand for our products due to customers' Year 2000 issues would seriously harm our business and results of operations. RISKS RELATED TO OUR INDUSTRY WE FACE INTENSE COMPETITION. The market for our products is intensely competitive. We believe that the primary competitive factors in our market include: (1) database performance, including the speed at which operations can be executed and the ability to support large amounts of different information (2) vendor reputation (3) the ability to handle abstract data types and complex data relationships (4) ease of use (5) database scalability (6) the reliability, availability and serviceability of the database (7) compatibility with customers' existing technology platforms (8) the ease and speed with which applications can be developed (9) price and (10) service and support. Our current and prospective competitors include companies that offer a variety of database solutions using various technologies including object database, object-relational database and relational database technologies. Competitors offering object and object-relational database management systems include Oracle Corporation, Computer Associates International, Inc., Object Design, Inc., Informix and its Illustra Information Technologies, Inc. subsidiary, Objectivity, Inc., Gemstone Systems, Inc., Poet Software Corporation, ONTOS, Inc. In addition, our products compete with traditional relational database management systems, many of which have been or are expected to be modified to incorporate object-oriented interface and other functionality, and to leverage Java. The principal competitors in the relational database market are Oracle, Sybase, Informix, IBM and Microsoft. We expect to face additional competition from other established and emerging companies as the object database market continues to develop and expand. In 1997, Oracle released its Oracle8 product, which, with its object option, provides object-relational database capabilities, and Computer Associates released their Jasmine ODBMS, which is a pure object-oriented database. Although we believe that the decision of relational database vendors to pursue object-relational or object-oriented approaches validates our belief that object-oriented database solutions will be increasingly demanded by today's business organizations, we are facing heightened competition. During the last year we have seen a major shift away from Smalltalk towards JAVA. In addition Versant is used more and more as a middle tier persistence layer in multi tier applications This brings us in direct competition with some of the more established companies in these markets. These are companies like IBM, SUN and BEA selling Java based tools and solutions. There is also some movement in the market to buy as much middleware components as possible from one or just a few suppliers. Because we are offering just a ODBMS for the time being we may not be able to compete in some of these situations. This could result and would continue to result in fewer customer orders, price reductions, reduced transaction size, reduced gross margins and loss of market share, any of which could have a material adverse effect on our business, operating results and financial condition and on the market price of our common stock. Due to the introduction by Oracle and Computer Associates of competing products with lower prices than the Versant ODBMS, we may not be able to maintain prices for our products at levels that will enable us to market our products profitably. Any decrease in per unit prices, as a result of competition or otherwise, could have a material adverse effect on our business, operating results and financial condition. In addition our poor financial performance during 1998 may influence customers to delay orders or cancel projects to wait and see how we are performing during the next foreseeable future. 7 9 We are also indirectly facing competition from developers of middleware products that allow users to connect object-oriented applications to existing legacy data and RDBMSs. To the extent that these products gain market acceptance, they may reduce the market for the Versant ODBMS for less complex object-oriented applications. Many of our competitors, and especially Oracle and Computer Associates, have longer operating histories, significantly greater financial, technical, marketing, service and other resources, significantly greater name recognition, broader product offerings and a larger installed base of customers than ours. In addition, many of our competitors have well-established relationships with current and potential customers of ours. As a result, our competitors may be able to devote greater resources to the development, promotion and sale of their products, may have more direct access to corporate decision-makers based on previous relationships and may be able to respond more quickly to new or emerging technologies and changes in customer requirements. We may not be able to compete successfully against current or future competitors, and competitive pressures could have a material adverse effect on our business, operating results and financial condition. WE DEPEND ON SUCCESSFUL TECHNOLOGY DEVELOPMENT. We believe that significant research and development expenditures will be necessary to remain competitive. While we believe our research and development expenditures will improve the Versant ODBMS and result in successful peripheral product introductions, due to the uncertainty of software development projects, these expenditures will not necessarily result in successful product introductions. Uncertainties impacting the success of software development project introductions include technical difficulties, market conditions, competitive products and consumer acceptance of new products and operating systems. In particular, we note that we have not yet achieved commercial acceptance for our Versant Multimedia Access product. We also face certain challenges in integrating third-party technology with our products. These challenges include the technological challenges of integration, which may result in development delays, and uncertainty regarding the economic terms of our relationship with the third-party technology provider, which may result in delays of the commercial release of new products. We face further technology development challenges associated with our acquisition of Soft Mountain. The Soft Mountain R'Net product offering is still under development, and there is uncertainty in both the timing of the release and the market acceptance of the product. Soft Mountain's geographic location in France generates additional management and integration challenges, because our product development to date has been performed in California and India. Developing and marketing our new Versant Enterprise Container for Java Beans creates new challenges for us. This product, which has not yet been commercially introduced, represents our first attempt to provide solutions to the application server market. Although we have worked with BEA to develop technology that will allow the Versant Enterprise Container to support the BEA WebLogic application server family, undiscovered bugs or errors may exist that prevent us from achieving the functionality we seek with the Versant Enterprise Container. In addition, because Java Bean containers are specific to each application server vendor and no standards have been adopted for such containers, we may not be able to take advantage of our development work with the BEA application server family when developing solutions for other application server vendors. We do not currently have any agreements or relationships regarding the Versant Enterprise Container with other application server vendors, and when our new product is introduced, customers will only be able to use it with BEA application servers. WE MUST PROTECT OUR INTELLECTUAL PROPERTY. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products, obtain or use information that we regard as proprietary or use or make copies of our products in violation of license agreements. Policing unauthorized use of our products is difficult. In addition, the laws of many jurisdictions do not protect our proprietary rights to as great an extent as do the laws of the United States. Shrink-wrap licenses may be wholly or partially unenforceable under the laws of certain jurisdictions, and copyright and trade secret protection for software may be unavailable in certain foreign countries. Our means of protecting our proprietary rights may not be adequate, and our competitors may independently develop similar technology. To date, we have not been notified that our products infringe the proprietary rights of third parties, but third parties could claim that our current or future products infringe such rights. We expect that developers of object-oriented technology will increasingly be subject to infringement claims as the number of products, competitors and patents in our industry segment grows. Any such claim, whether meritorious or not, could be time-consuming, result in costly litigation, cause product shipment delays or require us to enter into royalty or licensing agreements. 8 10 Such royalty or licensing agreements might not be available on terms acceptable to us or at all, which could have a material adverse effect upon our business, operating results and financial condition. Our future success will depend in part on our ability to integrate our products with those of vendors providing complementary products. The Versant ODBMS must be integrated with compilers, development tools, operating systems and other software and hardware components to produce a complete end-user solution. We may not receive the support of these third-party vendors, some of which may compete with us, to integrate our products with the vendors' products. WE DEPEND ON OUR PERSONNEL FOR WHOM COMPETITION IS INTENSE. Our future performance depends in significant part upon the continued service of our key technical, sales and senior management personnel. The loss of the services of one or more of our key employees could have a material adverse effect on our business. Our future success also depends on our continuing ability to attract, train and motivate highly qualified technical, sales and managerial personnel. Competition for such personnel is intense, especially in Silicon Valley where our headquarters are located, and we may not be able to attract, train and motivate such personnel. RISKS RELATED TO THIS OFFERING SALES OF THE SHARES INCLUDED IN THIS PROSPECTUS COULD AFFECT OUR STOCK PRICE. If the selling security holders sell substantial amounts of our common stock in the public market using this prospectus, the market price of our common stock could fall. EXISTING SHAREHOLDERS COULD INCUR DILUTION AS A RESULT OF FUTURE ISSUANCES OF OUR COMMON STOCK. To the extent the selling security holders exercise warrants or convert convertible securities into shares of our common stock, existing shareholders could experience dilution. THIS PROSPECTUS CONTAINS FORWARD LOOKING STATEMENTS. These statements defined by federal securities laws usually contain expressions like "believes", "expects", "intends" and "anticipates" and involve significant uncertainty. Actual results may differ significantly. RISKS RELATED TO OTHER OFFERINGS. We are obligated to register 2,663,505 common shares issuable in connection with the preferred stock offering in July 1999 that raised approximately $2.5 million in additional equity funds for the Company. A separate registration statement will be filed by us prior to October 10, 1999. To the extent such selling security holders acquire and or sell our common stock, other shareholders could experience dilution or adverse effects. 9 11 USE OF PROCEEDS We will not receive any proceeds from the sale of common stock by the selling security holders. DIVIDEND POLICY We have never paid any cash dividends on our stock and we anticipate that, for the foreseeable future, we will continue to retain any earnings for use in the operation of our business and do not intend to pay dividends. WHERE YOU CAN FIND MORE INFORMATION We have filed with the Securities and Exchange Commission a registration statement on Form S-3 under the Securities Act of 1933 with respect to the shares of common stock offered hereby. This prospectus does not contain all of the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the Securities and Exchange Commission. For further information with respect to us and the common stock offered by this prospectus, please refer to the registration statement. Statements in this prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the copy of the contract or document filed as an exhibit to the registration statement. Each such statement is qualified in all respects by such reference. Copies of the registration statement may be inspected, without charge, at the offices of the Securities and Exchange Commission, or obtained at prescribed rates from the Public Reference Section of the Securities and Exchange Commission at the address set forth below. We are subject to the informational requirements of the Securities Exchange Act of 1934, and, in accordance therewith, we file reports, proxy statements and other information with the Securities and Exchange Commission. Reports, proxy statements and other information that we have filed can be inspected and copied at the public reference facilities of the Securities and Exchange Commission located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of these materials from the Public Reference Section of the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a World Wide Web site that contains reports, proxy and information statements and other information that is filed electronically with it. This Web site can be accessed at http://www.sec.gov. We will furnish without charge to each person to whom a copy of this prospectus is delivered, upon such person's written or oral request, a copy of any and all of the information that has been incorporated by reference into this prospectus, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference as well. Requests for such copies should be directed to Versant Corporation, 6539 Dumbarton Circle, Fremont, CA 94555, Attention: Gary Rhea, Vice President and Chief Financial Officer, telephone: (510) 789-1500. IN CONNECTION WITH THIS OFFERING, NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS. IF SUCH INFORMATION IS GIVEN OR REPRESENTATIONS MADE, YOU MAY NOT RELY ON SUCH INFORMATION OR REPRESENTATIONS AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE REGISTERED HEREBY, NOR IS IT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. YOU MAY NOT IMPLY FROM THE DELIVERY OF THIS PROSPECTUS, NOR FROM ANY SALE MADE UNDER THIS PROSPECTUS, THAT OUR AFFAIRS ARE UNCHANGED SINCE THE DATE OF THIS PROSPECTUS OR THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME AFTER THE DATE OF THIS PROSPECTUS. 10 12 The following documents that we have filed with the Securities and Exchange Commission are incorporated by reference into this prospectus: o The registration statement on Form S-3 of which this prospectus is a part, and the exhibits filed and incorporated by reference with the Form S-3. o Our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1998. o Our Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission for the fiscal quarter ended June 30, 1999. o The description of our common stock contained in our registration statement on Form 8-A filed with the Securities and Exchange Commission on May 31, 1996. o All other documents we file with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act on or after the date of this prospectus and prior to the termination of this offering. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus or the registration statement. 11 13 SELLING SECURITY HOLDERS Special Situations Fund III LP, Special Situations Cayman LP and Special Situations Technology Fund LP acquired 700,000 shares of common stock, which they may offer pursuant to this prospectus on December 28, 1998, when they provided us with $1,443,750 in a private financing. At that time, these funds also acquired warrants to purchase 350,000 shares of our common stock, and their share numbers in the following table include the shares issuable upon exercise of these warrants. None of these funds has had any position, office or other material relationship with us within the past three years, except that these funds collectively own more than 10% of our common stock. Vertex Technology Fund Ltd. acquired its convertible secured subordinated promissory note when it provided us with $3.6 million in an October 16, 1998 private financing. This note was converted into 902,946 shares of our preferred stock in July 1999. This preferred stock is convertible into 1,805,892 shares of our common stock that Vertex may offer pursuant to this prospectus. An affiliate of Vertex initially became a shareholder of ours in November 1989 and had a representative on our board of directors from August 1991 to February 1997. See also, the Ownership Consolidated Risk Factor. Other affiliates of Vertex acquired preferred stock and warrants in the $2.5 million offering in July 1999. the common stock issuable upon conversion of these preferred shares or exercise of the warrants are to be offered in a separate registration statement. The former shareholders of Soft Mountain, listed in the table below as Soft Mountain Selling Security Holders, acquired the shares of our common stock that they may offer pursuant to this prospectus in connection with our acquisition of Soft Mountain, when they sold their Soft Mountain securities for our common stock. None of these security holders has had any position, office or other material relationship with us within the past three years. The following table sets forth certain information known to us with respect to the beneficial ownership of the our Common Stock as of June 30, 1999 by each of the selling security holders named below. The following table assumes each selling security holder sells all of the shares offered hereby. The selling security holders may from time to time offer and sell any or all of the shares pursuant to this prospectus. Because the selling security holders are not obligated to sell shares, and because selling security holders may also acquire publicly traded shares of our common stock, we cannot estimate how many shares each selling security holder will beneficially own after this offering. Therefore, the number of shares listed in the column entitled shares beneficially owned after offering reflects only the current share ownership of the selling security holders. We may update or supplement this prospectus from time to time to update the disclosure set forth herein.
Shares Beneficially Shares Beneficially Owned Prior to Offering Shares Owned After Offering ------------------------ Being -------------------- Name Number Percent(1) Offered Number Percent - ---- -------- ---------- ------- ------ ------- Special Situations Fund III LP(2) 896,753 7.3% 708,750 188,003 1.9% Special Situations Cayman LP(2) 295,050 2.4 236,250 58,000 * Special Situations Technology Fund LP(2) 166,000 1.3 105,000 51,000 * Vertex Technology Fund Ltd.(3) 1,805,892 14.6 1,805,892 0 SOFT MOUNTAIN SELLING SECURITY HOLDERS(4) SC Finoris 167,890 1.4 167,890 0 Trinova 45,631 * 45,631 0 Rhone-Alpes Creation 31,955 * 31,955 0 Guillaume Doumenc 110 * 110 0
-------------------- * Less than 1%. (1) Based on 10,151,277 shares of our common stock outstanding as of July 12, 1999, plus 1,805,892 additional shares after the conversion of Vertex's preferred shares; 300,000 additional shares after exercise of Special Situation's warrants; and 74,108 additional shares if other adjustments are necessary (a total of 12,331,277). (2) Includes warrants to purchase 236,250 shares, 78,750 shares and 35,000 shares held by Special Situations Fund III LP, Special Situations Cayman LP and Special Situations Technology Fund. This information is derived from a Schedule 13G/A filed by the Special Situations Funds with the Securities and Exchange Commission on January 4, 1999. (3) Represents 1,805,892 shares issuable upon conversion of Vertex's preferred stock. Does not include 596,367 shares currently held by affiliates of Vertex, common shares issuable upon exercise of Vertex' warrant for 902,946 shares or common shares issuable to Vertex affiliates in connection with the preferred stock offering in July 1999. (4) These shareholders have demanded that we repurchase their shares for approximately $1.1 million as a result of the registration for sale of their shares later than the December 31, 1998 date prescribed by their registration rights provisions. Settlement discussions are ongoing. Arbitration or litigation may result if a settlement cannot be reached. (5) As of the date of this prospectus, the Special Situations Funds have already sold approximately 230,000 shares pursuant to this offering. 12 14 PLAN OF DISTRIBUTION In connection with our acquisition of Soft Mountain, we and the Soft Mountain selling shareholders entered into a share purchase agreement. In connection with the financings provided by Vertex and the Special Situation Funds, we entered into registration rights agreements. The registration statement of which this prospectus forms a part has been filed pursuant to the Soft Mountain share purchase agreement and the registration rights agreements. To our knowledge, none of the selling security holders have entered into any agreement, arrangement or understanding with any particular broker or market maker with respect to the shares offered hereby, nor do we know the identity of the brokers or market makers that will participate in the offering. The shares of common stock covered by this prospectus may be offered and sold from time to time by the selling security holders. The selling security holders will act independently from us in making decisions with respect to the timing, manner and size of each sale. The selling security holders may not sell any of the shares that are subject to this prospectus, and selling security holders could sell their shares in a private transaction or other transaction that is exempt from the registration requirements of the Securities Act. We have been advised by the selling security holders that they have not, as of the date hereof, entered into any arrangement with a broker-dealer for the sale of shares. In effecting sales, broker-dealers engaged by the selling security holders may arrange for other broker-dealers to participate. Broker-dealers will receive commissions or discounts from the selling security holders in amounts to be negotiated immediately prior to the sale. In offering the shares, the selling security holders and any broker-dealers who execute sales for the selling security holders may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. Any profits realized by the selling security holders and the compensation of a broker-dealer may be deemed to be underwriting discounts and commissions. In addition, any securities covered by this prospectus that qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus. The selling security holders have advised us that, during such time as they may be engaged in a distribution of the shares of common stock included herein, they will comply with Rules 10b-6 and 10b-7 under the Exchange Act. In connection with these rules, the selling security holders have agreed not to engage in any stabilization activity in connection with any of our securities, to furnish copies of this prospectus to each broker-dealer through which the shares of common stock included in this prospectus may be offered, and not to bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities except as permitted under the Exchange Act. The selling security holders have also agreed to inform us and broker-dealers through whom sales may be made under this prospectus when the distribution of the shares is completed. We will bear the costs, expenses and fees in connection with the registration of the shares of common stock offered by this prospectus. Commissions and discounts, if any, attributable to the sales of shares of common stock using this prospectus will be borne by the selling security holders. The selling security holders may agree to indemnify any broker-dealer or agent that participates in transactions involving sales of the shares against certain liabilities, including liabilities arising under the Securities Act. We have advised the selling security holders that the anti-manipulation rules under the Exchange Act may apply to sales of shares of common stock in the market and to the activities of selling security holders. Each selling security holder has advised us that during such time as it may be engaged in the attempt to sell shares of common stock included in this prospectus, it will: o not engage in any stabilization activity in connection with any of our securities; o not bid for or purchase any of our securities or any rights to acquire our securities, or attempt to induce any person to purchase any of our securities or rights to acquire our securities, other than as permitted under the Exchange Act; o not effect any sale or distribution of the shares of common stock until after this prospectus has been appropriately amended or supplemented, if required, to set forth the terms thereof; and o effect all sales of shares of common stock in broker's transactions through broker-dealers acting as agents, in transactions directly with market makers or in privately negotiated transactions where no broker or other third party, other than the purchaser, is involved. Pursuant to the Soft Mountain share purchase agreement and the registration rights agreements, no selling security holder may sell any of the shares of common stock offered using this prospectus in the event and during 13 15 such period as we determine, based upon the advice of outside counsel, that unforeseen circumstances, including pending negotiations relating to, or the consummation of, a transaction, would require additional disclosure of material information by us in the registration statement the confidentiality of which we have a bona fide business purpose to preserve or which unforeseen circumstances would render us unable to comply with Securities and Exchange Commission requirements. Such suspension shall exist for only so long as any such suspension exists for other similarly restricted Versant shareholders. Each selling security holder has agreed that it will not effect any sales of the shares offered hereby any time after he or it has received notice from us to suspend sales as a result of a stop order or the occurrence or existence of any suspension event or so that we may correct or update the registration statement. This offering will terminate as to the Special Situations Funds on December 28, 2002 or the date on which all shares offered have been sold by the Special Situations Funds or are eligible for sale under Rule 144(k) of the Securities Act. This offering will terminate as to Vertex on October 15, 2001 or the date on which all shares offered have been sold by Vertex or are eligible for sale under Rule 144(k) of the Securities Act. This offering will terminate as to each Soft Mountain selling security holder on the earlier of one year after the date of this prospectus or the date on which all shares offered have been sold by the Soft Mountain selling security holders. LEGAL MATTERS The validity of the issuance of the shares of Common Stock offered hereby will be passed upon for the Company by Fenwick & West LLP, Two Palo Alto Square, Suite 800, Palo Alto, California 94306. EXPERTS The financial statements and schedule incorporated by reference in this registration statement on Form S-3 have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference in reliance upon the authority of said firm as experts in giving said reports. Reference is made to said report, which includes an explanatory paragraph with respect to the uncertainty regarding the Company's ability to continue as a going concern as discussed in Note 1 to the financial statements. 14 16 ================================================================================ VERSANT CORPORATION 3,175,586 Shares of Common Stock -------------------- PROSPECTUS -------------------- IN CONNECTION WITH THIS OFFERING, NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS. IF SUCH INFORMATION IS GIVEN OR REPRESENTATIONS MADE, YOU MAY NOT RELY ON SUCH INFORMATION OR REPRESENTATIONS AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE REGISTERED HEREBY, NOR IS IT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. YOU MAY NOT IMPLY FROM THE DELIVERY OF THIS PROSPECTUS, NOR FROM ANY SALE MADE UNDER THIS PROSPECTUS, THAT OUR AFFAIRS ARE UNCHANGED SINCE THE DATE OF THIS PROSPECTUS OR THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME AFTER THE DATE OF THIS PROSPECTUS. ================================================================================ 17 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses to be paid by the Registrant in connection with this offering are as follows: Securities and Exchange Commission registration fee $ 1,104 Nasdaq National Market filing fee 39,912 Accounting fees and expenses 3,000 Legal fees and expenses 15,000 Miscellaneous ------------- Total $ 59,016 =============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Registrant's Articles of Incorporation (the "Articles") include a provision that eliminates the liability of the Registrant's directors for monetary damages to the fullest extent permissible under California law. This limitation has no effect on a director's liability: (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law; (ii) for acts or omissions that a director believes to be contrary to the best interests of the Registrant or its shareholders or that involve the absence of good faith on the part of the director; (iii) for any transaction from which a director derived an improper personal benefit; (iv) for acts or omissions that show a reckless disregard for the director's duty to the Registrant or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of a serious injury to the Registrant or its shareholders; (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the Registrant or its shareholders; (vi) under Section 310 of the California Corporations Code (the "California Code") concerning contracts or transactions between the Registrant and a director; or (vii) under Section 316 of the California Code concerning directors' liability for improper dividends, loans and guarantees. The provision in the Articles does not extend to acts or omissions of a director in his capacity as an officer. Further, the provision will not affect the availability of injunctions and other equitable remedies available to the Registrant's shareholders for any violation of a director's fiduciary duty to the Registrant or its shareholders. The Articles also authorize the Registrant to indemnify its agents (as defined in Section 317 of the California Code), through bylaw provisions, by agreement or otherwise, to the fullest extent permitted by law. Pursuant to this provision, the Registrant's Bylaws provide that the Registrant shall indemnify its directors and officers to the fullest extent permissible under California law, subject to certain exceptions. In addition, the Registrant, at its discretion, may provide indemnification to persons whom the Registrant is not obligated to indemnify. The Bylaws also allow the Registrant to enter into indemnity agreements with individual directors, officers, employees and other agents. The Registrant has entered into indemnity agreements with all of its directors and officers providing the maximum indemnification permitted by law, subject to certain exceptions. These agreements, together with the Registrant's Bylaws and Articles, may require the Registrant, among other things, to indemnify these directors or officers against certain liabilities that may arise by reason of their status or service as directors or officers and to advance expenses to them as such expenses are incurred (provided that they undertake to repay the amount advanced if it is ultimately determined by a court that they are not entitled to indemnification). As authorized by the registrant's Bylaws, the Registrant, with approval by the Registrant's Board of Directors, has applied for, and expects to obtain, directors' and officers' liability insurance with a per claim and annual aggregate coverage limit of up to $5,000,000. Section 317 of the California Code makes provisions for the indemnification of officers, directors and other corporate agents in terms sufficiently broad to indemnify such persons, under certain circumstances, for liabilities (including reimbursement of expenses incurred) arising under the Securities Act. II-1 18 The indemnification provision in the Bylaws, and the indemnity agreements entered into between the Registrant and its directors and executive officers, may be sufficiently broad to permit indemnification of the Registrant's directors and executive officers for liabilities arising under the Securities Act. Reference is made to the following documents filed as exhibits to the Registrant's initial Registration Statement on Form SB-2 (File No. 333-4910-LA) regarding relevant indemnification provisions described above:
DOCUMENT EXHIBIT NUMBER -------- -------------- Registrant's Amended and Restated Articles of Incorporation........ 3.01 Registrant's Bylaws....................................... 3.04 Form of Indemnity Agreement............................... 10.10
ITEM 16. EXHIBITS. The following exhibits are filed herewith or incorporated by reference herein:
EXHIBIT NUMBER EXHIBIT TITLE - ------- ------------- 2.01 -- Acquisition Agreement dated as of March 26, 1997 by and between registrant and ISAR-Vermogensverwaltung Gbr mbH ("ISAR")(1) 4.01 -- [intentionally omitted] 4.02 -- Preferred Stock Purchase Agreement, dated as of April 27, 1994, as amended(2) 4.03 -- Share Purchase Agreement, dated as of July 30, 1998 5.01 -- Opinion of Fenwick & West LLP regarding the legality of the securities being issued+ 10.01 -- Preferred Stock and Warrant Purchase Agreement entered into as of June 28, 1999.(3) 23.01 -- Consent of Arthur Andersen LLP, Independent Public Accountants 23.02 -- Consent of Fenwick & West LLP+ 24.01 -- Power of Attorney+
- ---------- (1) Incorporated by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 10, 1997 (2) Incorporated by reference to the registrant's Registration Statement on Form SB-2 (file number 333-4910-LA) filed with and declared effective by the Securities and Exchange Commission on July 17, 1996. (3) Incorporated by reference to the registrant's current report on Form 8-K dated July 13, 1999. + Previously filed. ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made pursuant to this Registration Statement, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"); (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement (notwithstanding the foregoing, any increase or decrease in volume or securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate II-2 19 offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement); and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by paragraphs (1)(i) or (1)(ii) is contained in any periodic report filed with or furnished to the Securities and Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 20 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all for the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on the 13th day of August, 1999. VERSANT CORPORATION By: /s/ Gary Rhea ------------------------------------- Gary Rhea Vice President -- Finance and Administration Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------- ----- ---- PRINCIPAL EXECUTIVE OFFICER: /s/ * - ---------------------------- President, Chief Executive August 13, 1999 Nick Ordon Officer and Director PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER: /s/ Gary Rhea - ---------------------------- Vice President--Finance August 13, 1999 Gary Rhea and Administration ADDITIONAL DIRECTORS: - ---------------------------- Director August 13, 1999 Mark Leslie /s/ * - ---------------------------- Director August 13, 1999 Stephen J. Gaal - ---------------------------- Director August 13, 1999 Bernhard Woebker /s/ * - ---------------------------- Director August 13, 1999 David Banks *By /s/ Gary Rhea ------------------------ Attorney-in-Fact
II-4 21 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT TITLE - ------- ------------- 2.01 -- Acquisition Agreement dated as of March 26, 1997 by and between registrant and ISAR-Vermogensverwaltung Gbr mbH ("ISAR")(1) 4.01 -- [intentionally omitted] 4.02 -- Preferred Stock Purchase Agreement, dated as of April 27, 1994, as amended(2) 4.03 -- Share Purchase Agreement, dated as of July 30, 1998 5.01 -- Opinion of Fenwick & West LLP regarding the legality of the securities being issued+ 10.01 -- Preferred Stock and Warrant Purchase Agreement entered into as of June 28, 1999.(3) 23.01 -- Consent of Arthur Andersen LLP, Independent Public Accountants 23.02 -- Consent of Fenwick & West LLP+ 24.01 -- Power of Attorney+
- ---------- (1) Incorporated by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 10, 1997 (2) Incorporated by reference to the registrant's Registration Statement on Form SB-2 (file number 333-4910-LA) filed with and declared effective by the Securities and Exchange Commission on July 17, 1996. (3) Incorporated by reference to the registrant's current report on Form 8-K dated July 13, 1999. + Previously filed. II-5 EX-5.1 2 OPINION OF FENWICK & WEST 1 EXHIBIT 5.01 [FENWICK & WEST, LLP LETTERHEAD] April 9, 1999 Versant Corporation 6539 Dumbarton Circle Fremont, California 94555 Gentlemen/Ladies: At your request, we have examined the Registration Statement on Form S-3 to be filed by you with the Securities and Exchange Commission (the "SEC") on or about April 9, 1999 (the "Registration Statement") in connection with the registration under the Securities Act of 1933, as amended, of an aggregate of 3,175,586 shares of your Common Stock (the "Stock"), 945,586 of which have already been issued, 1,880,000 shares of which are subject to issuance by you upon the conversion of $3,619,000 aggregate principal amount of your convertible secured subordinated promissory note (the "Note"), and 350,000 of which are subject to issuance by you upon the exercise of outstanding warrants (the "Warrants"). Each of these 3,175,586 shares of Stock may be sold only by certain selling security holders named in the Registration Statement and in subsequent amendments thereto (the "Selling Security holders"). The Stock is to be registered for an offering on a delayed or continuous basis as set forth in the Registration Statement, the prospectus contained therein and the supplements to the prospectus. In rendering this opinion, we have examined the following: (1) your Amended and Restated Articles of Incorporation, as amended, and Bylaws, each as filed with your registration on Form SB-2 (File Number 333-4910-LA) declared effective by the SEC on July 17, 1996; (2) your registration statement on Form 8-A (File Number 000-22697) filed with the SEC on May 31, 1996, together with the order of effectiveness issued by the SEC therefor on July 17, 1996; (3) the Registration Statement, together with the exhibits filed as a part thereof, and the prospectuses prepared in connection with the Registration Statement; (4) the minutes of meetings and actions by written consent of the shareholders and Board of Directors that are contained in your minute books that are in our possession; 2 (5) your statement as to the number, as of April 9, 1999, of (a) outstanding shares of your common stock, (b) outstanding options, warrants and rights to purchase common stock and (c) any additional shares of common stock reserved for future issuance in connection with your stock option and purchase plans and all other plans, agreements or rights; (6) oral verification from your transfer agent of the number of outstanding shares of the your common stock as of the date hereof; (7) your fiscal 1998 Annual Report on Form 10-KSB; (8) a Management Certificate addressed to us and dated of even date herewith executed by you containing certain factual and other representations; (9) The Stock Purchase Agreement dated as of July 30, 1998 under which certain of the Selling Security Holders acquired the Stock to be sold by them as described in the Registration Statement; (10) The Note Purchase Agreement dated as of October 16, 1998 under which one of the Selling Security Holders acquired the Stock to be sold by it as described in the Registration Statement, together with the Note; and (11) The Stock and Warrant Purchase Agreement dated as of December 28, 1998 under which certain of the Selling Security Holders acquired the Stock to be sold by them as described in the Registration Statement, together with the Warrants (together with the documents listed in items (9) and (10) above, the "Purchase Agreements"). By telephone call to the offices of the SEC, we have confirmed the continued effectiveness of your registration under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the timely filing by you of all reports required to be filed by you pursuant to Rules 13, 14 and 15 promulgated under the Exchange Act. In our examination of documents for purposes of this opinion, we have assumed, and express no opinion as to, the genuineness of all signatures on original documents, the authenticity and completeness of all documents submitted to us as originals, the conformity to originals and completeness of all documents submitted to us as copies, the legal capacity of all natural persons executing the same, the lack of any undisclosed termination, modification, waiver or amendment to any document reviewed by us and the due authorization, execution and delivery of all documents where due authorization, execution and delivery are prerequisites to the effectiveness thereof. In rendering this opinion, we have also assumed that, at the time of any issuance of any shares of Stock pursuant to the Registration Statement, the number of shares of Stock so issued will not exceed that number of shares of Stock obtained by subtracting from the number of shares of Stock then authorized under the Articles of Incorporation: (a) the number of shares of Stock that are then issued, and (b) the number of shares of Stock that are then reserved for issuance pursuant to then outstanding commitments or obligations of Versant Corporation. 2 3 As to matters of fact relevant to this opinion, we have relied solely upon our examination of the documents referred to above and have assumed the current accuracy and completeness of the information obtained from public officials and records referred to above. We have made no independent investigation or other attempt to verify the accuracy of any of such information or to determine the existence or non-existence of any other factual matters; however, we are not aware of any facts that would cause us to believe that the opinion expressed herein is not accurate. We are admitted to practice law in the State of California, and we express no opinion herein with respect to the application or effect of the laws of any jurisdiction other than the existing laws of the United States of America and the State of California. In connection with our opinion expressed below, we have assumed that, at or prior to the time of the delivery of any shares of Stock, the Registration Statement will have been declared effective under the Securities Act of 1933, as amended, that the registration will apply to such shares of Stock and will not have been modified or rescinded and that there will not have occurred any change in law affecting the validity or enforceability of such shares of Stock. You have informed us that you intend to issue the unissued Stock from time to time on a delayed or continuous basis. This opinion is limited to the laws, including the rules and regulations, as in effect on the date hereof. We are basing this opinion on our understanding that, prior to issuing any Stock, you will advise us in writing of the terms thereof and other information material thereto, will afford us an opportunity to review the operative documents pursuant to which such Stock is to be issued (including the Registration Statement, the prospectus and the applicable prospectus supplement, as then in effect) and will file such supplement or amendment to this opinion (if any) as we may reasonably consider necessary or appropriate with respect to such Stock. However, we undertake no responsibility to monitor your future compliance with applicable laws, rules or regulations of the SEC or other governmental body. We also assume you will timely file any and all supplements to the Registration Statement and prospectus as are necessary to comply with applicable laws in effect from time to time. Based upon the foregoing assumptions, understandings and qualifications, we are of the opinion that the up to 3,175,586 shares of Stock that may be sold by the Selling Security Holders pursuant to the Registration Statement, when issued pursuant to the applicable Purchase Agreement and evidenced by appropriate certificates that have been properly executed and delivered, and when issued and sold in accordance with and in the manner referred to in the relevant prospectus associated with the Registration Statement, will be validly issued, fully paid and non-assessable. We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to us, if any, in the Registration Statement, the Prospectus constituting a part thereof and any amendments thereto. 3 4 This opinion speaks only as of its date and we assume no obligation to update this opinion should circumstances change after the date hereof. This opinion is intended solely for your use as an exhibit to the Registration Statement for the purpose of the above sale of the Stock and is not to be relied upon for any other purpose. Very truly yours, FENWICK & WEST LLP By: /s/ Barry J. Kramer ------------------------------------- Barry J. Kramer, a Partner 4 EX-23.1 3 CONSENT OF INDEPENDENT ACCOUNTANTS 1 EXHIBIT 23.01 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated January 25, 1999 (except for certain matters as to which the date was March 19, 1999, included in Versant Corporation's Form 10-KSB for the year ended December 31, 1998 and to all references to our Firm included in this registration statement. /s/ Arthur Andersen LLP ----------------------- ARTHUR ANDERSEN LLP San Jose, California August 12, 1999 -----END PRIVACY-ENHANCED MESSAGE-----