SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Registration Statement Under The Securities Act of 1933
ALADDIN SYSTEMS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 86-0866757
(State or Other Jurisdiction of I.R.S. Employer Identification
Incorporation or Organization) Number
245 WESTRIDGE DRIVE, WATSONVILLE, CALIFORNIA 95076
(Address of Principal Executive Offices and Zip Code)
Paul Goodman, Esq.
Ellenoff, Grossman Schole & Cyruli, LLP
370 Lexington Avenue
19th Floor
New York, NY 10017
(212) 697-7400
(Name, address and telephone number of agent for service)
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, 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. |_|
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------
Title of Amount to be Proposed Proposed Amount of
Securities Registered: Maximum Offering Maximum Registration
To be Registered: Price Per Aggregate Fee:
Share: Offering
Price(1):
- -------------------------------------------------------------------------------------------
Common Stock,
par value $.001 8,092,635 Shares $.51 $4,127,244 $1,032.00
- -------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the amount of the registration
fee, based on the average high and low trading price of the Common Stock
reported on the Over The Counter Bulletin Board on July 31, 2001 in accordance
with Rule 457(c) under the Securities Act of 1933.
TABLE OF CONTENTS
PAGE
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 5
SUMMARY 7
RISK FACTORS 10
USE OF PROCEEDS 11
SELLING SHAREHOLDERS 11
PLAN OF DISTRIBUTION 12
LEGAL MATTERS 13
EXPERTS 13
EXHIBITS
EXHIBIT 5.1
EXHIBIT 23.1
EXHIBIT 23.2
================================================================================
The information in this prospectus is not complete and may be changed. The
selling shareholders named herein may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities, and the
selling shareholders are not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
================================================================================
2
Subject to Completion July 31, 2001
PROSPECTUS
8,092,635 Shares
ALADDIN SYSTEMS
HOLDINGS, INC.
----------
Common Stock
($0.001 par value)
----------
This prospectus relates to the public offering, which is not being
underwritten, of up to 8,092,635 shares of our common stock which are held by
some of our current shareholders and may be offered and sold from time to time
by the selling shareholders described herein.
The prices at which such shareholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares.
Our common stock is traded on the Over the Counter Bulletin Board under
the symbol "ALHI." On July 31, 2001, the last reported sale price for our common
stock on the Over The Counter Bulletin Board was $.51 per share.
See "Risk Factors" beginning at page 7 to read about certain factors you
should consider before buying shares of our common stock.
----------
Neither the Securities and Exchange Commission nor state securities
regulators have approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
----------
The date of this Prospectus is July 31, 2001.
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Table of Contents
Page
Special Note Regarding Forward-looking Statements 5
Summary 7
Risk Factors 10
Use of Proceeds 11
Selling Shareholders 11
Plan of Distribution 12
Legal Matters 13
Experts 13
Exhibits
Exhibit 5.1
Exhibit 23.1
Exhibit 23.2
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling shareholders are offering to sell, and
seeking offers to buy shares of our common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common stock. In this
prospectus, "Aladdin," "Aladdin Systems," "we," "us," and "our" refer to Aladdin
Systems Holdings, Inc. and its consolidated subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference facilities in Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC
located at 7 World Trade Center, Suite 1300, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed.
(1) Our Annual Report on Form 10-KSB for the year ended December 31, 2000;
(2) Our Quarterly Report on Form 10-QSB for the quarter ended June 30,
2001;
(3) The description of our common stock contained in our registration
statement on our Registration Statement on Form 10-SB/A dated May 12, 2000
4
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Aladdin Systems Holdings,Inc.
Attn: Alexandra Gonzalez, VP of Finance
245 Westridge Drive
Watsonville, CA 95076
(831) 761-6200
All documents subsequently filed by us pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the
filing of a post-effective amendment which indicates that all securities
registered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of such documents.
You should rely on the information incorporated by reference or provided
in this prospectus. We have authorized no one to provide you with different
information. We are not making an offer of these 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 on the front of the
document.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements deal with our
current plans, intentions, beliefs and expectations and statements of future
economic performance. Statements containing terms such as "believes," "does not
believe," "plans," "expects," "intends," "estimates," "anticipates" and other
phrases of similar meaning are considered to contain uncertainty and are
forward-looking statements.
Forward-looking statements involve known and unknown risks and
uncertainties which may cause our actual results in future periods to differ
materially from what is currently anticipated. We make cautionary statements in
certain sections of this prospectus, including under "Risk Factors." You should
read these cautionary statements as being applicable to all related
forward-looking statements wherever they appear in this prospectus, in the
materials referred to in this prospectus, in the materials incorporated by
reference into this prospectus, or in our press releases.
No forward-looking statement is a guarantee of future performance, and you
should not place undue reliance on any forward-looking statement.
SUMMARY
Summary of Offering
This is an offering of up to 8,092,635 shares of our common stock which
are held by some of our current shareholders. The shares being offered may be
sold from time to time by the selling shareholders described herein in the
manner described under Plan of Distribution hereunder. The proceeds from the
sale of the common stock being offered are solely for the account of the selling
shareholders. Accordingly, we will not receive any proceeds from the sale of the
shares by the selling shareholders. The shares will be offered directly by the
selling shareholders without an underwriter.
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Our Company
Aladdin Systems Holdings, Inc., through our Aladdin Systems, Inc.
("Aladdin") subsidiary, is a leader in utility software for business and
personal computing. Aladdin's business strategy is to satisfy customer needs by
developing and marketing products across multiple operating platforms (currently
those of Microsoft Corporation, Apple Computer, Inc., Sun Microsystems and Palm
Computing, Inc.), that solve the problems of transmitting, accessing, and
organizing data. Since 1990, Aladdin has published the StuffIt line of data
compression products and today publishes several different products based upon
StuffIt for the Windows, Macintosh, Linux and Solaris markets. We also publish
several other popular software applications including Spring Cleaning with
iClean, a software uninstaller package for the Macintosh; Aladdin Flashback, a
version control application for both the Macintosh and Windows markets which
saves older versions of documents as newer ones are created; GoBar, a
replacement application launcher for the Palm OS; DragStrip, a quick launch
application for both the Windows and Macintosh markets; AladdinTuner, a global
Internet radio tuner; and PowerTicker, a stock ticker for the Macintosh which
accesses stock quotes and financial data over the Internet without the need for
separate Web browser software. We sell these products to consumers through
distributors and resellers, as well as directly from our Web site
(www.aladdinsys.com).
In addition to products for the consumer market, we also develop and
market products to other software developers and IT professionals. These
products include StuffIt InstallerMaker, which simplifies the installation and
distribution of software for Macintosh computers; the StuffIt Engine SDK for the
Macintosh and Windows markets which provides developers with the ability to
include compression features in their own products; and ShrinkWrap, a disk image
product which is used by software developers.
Our products are divided into two different product groups serving two
different markets: consumers and developers. While many of our products are used
by both groups, most of our developer products are licensed directly rather than
sold through the retail software distribution channel. Our products are divided
between these two market segments as follows:
Consumer Products:
StuffIt Products
StuffIt Deluxe (Macintosh)
StuffIt for Windows (Windows, Linux and Solaris)
DropStuff (Windows and Macintosh)
StuffIt Expander (Windows, Macintosh and Linux)
StuffIt Lite (Macintosh)
DropZip (Windows and Macintosh)
StuffIt Express (Macintosh)
Desktop Utilities and Internet Utilities
Spring Cleaning (Macintosh)
Aladdin FlashBack (Windows and Macintosh)
ShrinkWrap (Macintosh)
DragStrip (Windows and Macintosh)
Intellinews (Macintosh)
iClean (Macintosh)
Palm Products
HotTme (Palm)
GoBar (Palm)
Developer Products:
StuffIt InstallerMaker (Macintosh)
StuffIt Engine (Windows, Linux, Solaris and Macintosh)
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Our principal executive offices are located at 245 Westridge Drive,
Watsonville, CA 95076. Our telephone number is (831) 761-6200. We maintain Web
sites at www.aladdinsys.com and www.stuffit.com. Information contained on our
Web sites does not constitute part of, nor is it incorporated by reference into,
this prospectus.
RISK FACTORS
In addition to reviewing other information in this prospectus and our
Annual Report on Form 10-KSB and the other documents incorporated herein by
reference, you should consider carefully the following factors in evaluating us
and our business before purchasing shares of our common stock.
We May Not Successfully Develop New Products and Services
Our growth depends on our ability to continue to develop leading edge software
products. Our business and operating results would be harmed if we fail to
develop products that achieve widespread market acceptance or that fail to
generate significant revenues to offset development costs. We may not timely and
successfully identify, develop and market new product opportunities. If we
introduce new products, they may not attain broad market acceptance or
contribute meaningfully to our revenues or profitability.
Because the markets for our products and services are changing rapidly, we must
develop new offerings quickly. We have experienced development delays and cost
overruns in our development efforts in the past and we may encounter such
problems in the future. Delays and cost overruns could affect our ability to
respond to technological changes, evolving industry standards, competitive
developments or customer requirements. Our products also may contain undetected
errors that could cause increased development costs, loss of revenues, adverse
publicity, reduced market acceptance of the products or lawsuits by customers.
We Are Exposed to General Economic and Market Conditions and The Current
Economic Downturn May Adversely Affect Future Revenue.
Our business is subject to the effects of general economic conditions and, in
particular, market conditions in the software and computer industries. Our
operating results could be adversely affected as a result of recent unfavorable
global economic conditions and reduced consumer spending. If these economic
conditions do not improve, or if global economic conditions worsen, we may
experience material adverse impacts on our business, operating results and
financial condition.
Our Markets are Highly Competitive and Our Operating Results and Financial
Condition Could Be Adversely Affected By This Competition.
Our markets are intensely competitive. This competition could adversely affect
our operating results by reducing our sales or the prices we can charge for our
products. Our ability to remain competitive depends, in part, on our ability to
enhance our products or develop new products that are compatible with new
hardware and operating systems. We have no control over, and limited insight
into, development efforts by third parties with respect to new hardware and
operating systems and we may not be able to respond effectively or timely to
such changes in the market. In addition, we have limited resources and we must
make strategic decisions as to the best allocation of our resources to position
ourselves for changes in our markets. We may from time to time allocate
resources to projects or markets that do not develop as rapidly or fully as we
expect. We may fail to allocate resources to third party products or to markets
that are more successful than we anticipate.
7
Introduction of New Operating Systems May Adversely Affect Our Financial Results
and Stock Price.
The inclusion of compression, encryption or archiving tools in new versions of
operating systems and hardware packages could adversely affect our sales and
decrease the need for our products. For example, the inclusion of features by
Apple Computer in new or upcoming versions of the Mac OS, which directly compete
with our products may decrease or delay the demand for certain of our products,
including those currently under development and products specifically intended
for the Mac OS.
Our Earnings and Stock Price are Subject to Significant Fluctuations.
Due to many factors, including those noted in this section, our earnings and
stock price have been and may continue to be subject to significant volatility.
There have been previous quarters in which we have experienced shortfalls in
revenue and earnings from levels from prior quarters. This may occur again in
the future. Currently, there is not a large market for our stock so any sale of
our stock could also cause significant volatility.
Fluctuations in Our Quarterly Operating Results Have Affected Our Stock Price in
the Past and Could Affect Our Stock Price in the Future.
Our quarterly operating results have varied substantially in the past and may
vary substantially in the future depending upon a number of factors, including:
- the timing of announcements and releases of new or enhanced versions of
our products and product upgrades;
- the introduction of competitive products by existing or new competitors;
- reduced demand for any given product;
- seasonality in the end-of-period buying patterns of foreign and domestic
software markets; and
- the market's transition between new releases of operating systems.
In addition to the foregoing factors, the risk of quarterly fluctuations is
increased by the fact that a significant portion of our net revenues has
historically been generated during the last month of each fiscal quarter. Most
resellers tend to make a majority of their purchases at the end of a fiscal
quarter. In addition, many enterprise customers negotiate site licenses near the
end of each quarter. In part, this is because these two groups are able, or
believe that they are able, to negotiate lower prices and more favorable terms
at that time. Our reliance on a large portion of revenue occurring at the end of
the quarter and the increase in the dollar value of transactions that occur at
the end of a quarter can result in increased uncertainty relating to quarterly
revenues. Due to this end-of-period buying pattern, forecasts may not be
achieved, either because expected sales do not occur or because they occur at
lower prices or on terms that are less favorable to us. In addition, these
factors increase the chances that our results could diverge from the
expectations of investors.
The Results of Our Research and Development Efforts Are Uncertain.
We believe that we will need to incur significant research and development
expenditures to remain competitive. The products we are currently developing or
may develop in the future may not be technologically successful. In addition,
the length of our product development cycle has generally been greater than we
originally expected and we are likely to experience delays in future product
development. If our resulting products are not technologically successful, they
may not achieve market acceptance or compete effectively with products of our
competitors.
8
We are Dependant Upon Certain Distribution Channels
Our retail distribution channel is affected by the unpredictability in consumer
demand. This increases the risk that we may not plan effectively for the future,
which could result in adverse operating results in future periods. Our retail
distribution customers also carry our competitors' products. These retail
distributors may have limited capital to invest in inventory. Their decisions to
purchase our products are partly a function of pricing, terms and special
promotions offered by our competitors and other factors that we do not control
and cannot predict. Our agreements with retail distributors are generally
nonexclusive and may be terminated by them or by us without cause. We would be
adversely affected if companies in our chain of distributors chose to increase
purchases from our competition relative to the amount they purchase from us.
Some distributors and resellers have experienced financial difficulties in the
past and may experience financial difficulties in the future. If these
distributors or resellers do experience financial difficulties and we are unable
to move their inventories, we may experience reduced sales or increased
write-offs, which would adversely affect our operating results.
Product Returns May Negatively Affect Our Net Revenue
Product returns can occur when we introduce upgrades and new versions of
products or when distributors or retailers have excess inventories, subject to
various contractual limitations. Our return policy allows distributors, subject
to these contractual limitations, to return purchased products in exchange for
new products or for credit towards future purchases. End-users may return our
products through dealers and distributors for a full refund within a reasonably
short period from the date of purchase. We estimate and maintain reserves for
such product returns which to date have been materially consistent with our
actual experience. Future returns could, however, exceed the reserves we have
established, which could have a material adverse effect on our operating
results.
The Trend Toward Consolidation in the Software Industry Could Impede Our Ability
to Compete Effectively.
Consolidation is underway among companies in the software industry as firms seek
to offer more extensive suites of software products and broader arrays of
software solutions. Changes resulting from this consolidation may negatively
impact our competitive position. In addition, to the extent that we seek to
expand our product lines and skills and capacity through acquisitions, the trend
toward consolidation may result in our encountering competition, and paying
higher prices, for acquired businesses.
We Must Attract and Retain Personnel While Competition For Personnel in Our
Industry is Intense.
We believe that our future success will depend in part on our ability to recruit
and retain highly skilled management, marketing and technical personnel. To
accomplish this, we believe that we must provide personnel with a competitive
compensation package, including stock options. In the future we may need to
increase the option pool, which will require stockholder approval.
Our Intellectual Property and Proprietary Rights May Not Be Adequately Protected
From All Unauthorized Uses.
We regard our software and underlying technology as proprietary. We seek to
protect our proprietary rights through a combination of confidentiality
agreements and copyright, patent, trademark and trade secret laws. Third parties
may copy aspects of our products or otherwise obtain and use our proprietary
information without authorization or develop similar technology independently.
All of our products are protected by copyright laws. Existing copyright laws
afford limited practical protection. Furthermore, the laws of some
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foreign countries do not offer the same level of protection of our proprietary
rights as the laws of the United States, and we may be subject to unauthorized
use of our products. Any legal action that we may bring to protect proprietary
information could be expensive and may distract management from day-to-day
operations. Many of our current and potential competitors dedicate substantially
greater resources to protection and enforcement of their intellectual property
rights, especially patents.
Policing unauthorized use of such a broadly disseminated product as computer
software is difficult, and software piracy can be expected to be a persistent
problem for the packaged software industry. These problems may be particularly
acute in international markets. We do not have specific information regarding
how unauthorized copying affects our sales in either the United States or
foreign markets.
Although we do not believe that we infringe the proprietary rights of third
parties, there can be no assurance that third parties will not claim
infringement by us with respect to past, current or future technologies. We
expect that participants in our markets will be increasingly subject to
infringement claims as the number of software and competitors in our industry
segment grows. Any such claim, whether meritorious or not, could be
time-consuming, result in costly litigation, cause software upgrade delays or
require us to enter into royalty or licensing agreements. Such royalty or
licensing agreements might not be available on terms acceptable to us or at all,
as a result, any such claim could have a material adverse effect upon our
business, results of operations and financial condition.
Our Products Are Complex and Are Operated in a Wide Variety of Computer
Configurations, Which Could Result in Errors and Product Failures.
Because we offer very complex products, undetected errors, failures or bugs may
occur when they are first introduced or when new versions are released. In the
past, we have discovered software errors, failures and bugs in certain of our
product offerings after their introduction and have experienced delays or lost
revenues during the period required to correct these errors. Our customers'
computer environments are often characterized by a wide variety of standard and
non-standard configurations that make pre-release testing for programming or
compatibility errors very difficult and time-consuming. Despite testing by us
and by others, errors, failures or bugs may not be found in new products or
releases after commencement of commercial shipments. Errors, failures or bugs in
products released by us could result in negative publicity, product returns,
loss of or delay in market acceptance of our products or claims by customers or
others. Alleviating such problems could require significant expenditures of our
capital and resources and could cause interruptions, delays or cessation of our
product licensing, which would adversely affect results of operations.
Most of our license agreements with customers contain provisions designed to
limit our exposure to potential product liability claims. It is possible,
however, that these provisions may not prove effective in limiting our
liability.
We Could Lose Strategic Relationships That Are Essential to Our Business
The loss of current strategic relationships or licensing arrangements, the
inability to find other strategic partners or the failure of our existing
relationships to achieve meaningful positive results for us could harm our
business. We rely in part on strategic relationships to help us:
o increase adoption of our products through distribution arrangements;
o increase the availability of our products;
o acquire desirable or necessary technology components and intellectual
property rights;
o enhance our brand;
o expand the range of commercial activities based on our technology;
o increase the performance and utility of our products.
We would be unable to accomplish many of these goals without the assistance of
third parties. For example, we may become more reliant on strategic partners to
provide multimedia content and technology,
10
to provide more secure and easy-to-use electronic commerce solutions and to
build out the necessary infrastructure for media delivery. We may not be
successful in forming or managing strategic relationships.
Our Software Products and Web Sites May Be Subject to Intentional Disruption
Although we believe we have sufficient controls in place to prevent intentional
disruptions, such as software viruses specifically designed to impede the
performance of our products, we expect to be an ongoing target of such
disruptions. Similarly, experienced computer programmers, or hackers, may
attempt to penetrate our network security or the security of our Web site and
misappropriate proprietary information or cause interruptions of our services.
Our activities could be substantially disrupted and our reputation, and future
sales, harmed if these efforts are successful.
USE OF PROCEEDS
The proceeds from the sale of the common stock offered pursuant to this
prospectus are solely for the account of the selling shareholders. Accordingly,
we will not receive any proceeds from the sale of the shares by the selling
shareholders.
SELLING SHAREHOLDERS
The shares of common stock to be sold by the selling shareholders pursuant
to this prospectus represent shares issued to the selling shareholders by us in
connection with our acquisition of Aladdin Systems, Inc. on October 25, 1999 and
our acquisition of Trexar, Inc. on March 21, 2000. The following table sets
forth the aggregate number of shares of our common stock held by each selling
shareholder and the aggregate number of shares of common stock offered by each
such selling shareholder. As of July 1, 2001, there were 9,792,635 shares of our
common stock issued and outstanding. Beneficial ownership is determined
according to the rules of the SEC, and includes shares subject to options
currently exercisable or exercisable within 60 days of July 1, 2001. Shares
subject to such options are deemed outstanding for computing the percentage
ownership of the person holding such options but not for computing the
percentage ownership of any other person.
- ------------------------------------------------------------------------------------------
Ownership Prior to Offering Ownership After Offering
- ------------------------------------------------------------------------------------------
Number of
Number of Number Shares
Shares % of Common of Beneficially
Beneficially Stock Shares Owned % of Common
Name of Selling Owned Prior Outstanding Being After Stock
Shareholder to Offering (2) Offered Offering(1) Outstanding
- ------------------------------------------------------------------------------------------
Jonathan Kahn 1,970,158 18.85% 1,728,634 241,524 2.31%
- ------------------------------------------------------------------------------------------
David Schargel 1,666,921 15.95 1,641,789 25,132 .24
- ------------------------------------------------------------------------------------------
Darryl Lovato 1,922,577 18.39 1,674,333 248,244 2.38
- ------------------------------------------------------------------------------------------
Brad Peppard 77,400 .74 0 77,400 .74
- ------------------------------------------------------------------------------------------
Benna Lovato 1,699,407 16.26 1,674,333 25,074 .24
- ------------------------------------------------------------------------------------------
Marco Gonzalez 697,812 6.68 697,791 21 0
- ------------------------------------------------------------------------------------------
Leonard Rosenthol 211,698 2.03 211,698 0 0
- ------------------------------------------------------------------------------------------
Peter Caylor 10,303 .10 10,303 0 0
- ------------------------------------------------------------------------------------------
Andrea Roland 1,025 .01 1,025 0 0
- ------------------------------------------------------------------------------------------
John Teich 3,190 .03 3,190 0 0
- ------------------------------------------------------------------------------------------
Jason Foodman 348,103 3.33 311,819 36,284 .35
- ------------------------------------------------------------------------------------------
Michael Pollack 83,281 .80 77,954 5,327 .05
- ------------------------------------------------------------------------------------------
Frank Wingate 51,970 .50 51,970 0 0
- ------------------------------------------------------------------------------------------
Allan Foodman 5,197 .05 5,197 0 0
- ------------------------------------------------------------------------------------------
Angie Williamson 2,599 .02% 2,599 0 0%
- ------------------------------------------------------------------------------------------
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(1) Assumes sale of all shares being offered
(2) Based on 9,792,635 shares issued and outstanding at July 1, 2001 and options
currently exercisable or exercisable within 60 days of July 1, 2001.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the selling shareholders. The selling shareholders will act
independently of us in making decisions with respect to the timing, manner and
size of each sale. The selling shareholders may sell the shares being offered
hereby on the Over The Counter Bulletin Board, or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
at negotiated prices. Shares may be sold by one or more of the following means
of distribution:
o Block trades in which the broker-dealer so engaged will attempt to
sell such shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction;
o Purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
o Over-the-counter distributions in accordance with the rules of the
Over The Counter Bulletin Board;
o Ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o Privately negotiated transactions.
To the extent required, this prospectus may be amended and supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of such shares or otherwise, the selling shareholders may
enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of our common stock in the
course of hedging the positions they assume with the selling shareholders. The
selling shareholders may also sell our common stock short and redeliver the
shares to close out such short positions. The selling shareholders may also
enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial
institution of the shares offered hereby, which shares such broker-dealer or
other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction). The selling shareholders
may also pledge such shares to a broker-dealer or other financial institution,
and, upon a default, such broker-dealer or other financial institution, may
effect sales of such pledged shares pursuant to this prospectus (as supplemented
or amended to reflect such transaction). In addition, any such shares that
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this prospectus.
In effecting sales, brokers, dealers or agents engaged by the selling
shareholder may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling shareholders in amounts to be negotiated prior to the sale. Such brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 in connection
with such sales, and any such commissions, discounts or concessions may be
deemed to be underwriting discounts or commissions under the Securities Act of
1933. We will pay all reasonable expenses incident to the registration of the
shares being offered hereby other than any commissions and discounts of
underwriters, dealers or agents.
In order to comply with the securities laws of certain states, if
applicable, the shares being offered hereby must be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition,
12
in certain states such shares may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and there has been
compliance thereof.
We have advised the selling shareholders that the anti-manipulation rules
of Regulation M under the Securities Exchange Act of 1934 may apply to sales of
shares in the market and to the activities of the selling shareholders and their
affiliates. In addition, we will make copies of this prospectus available to the
selling shareholder and have informed them of the need for delivery of copies of
this prospectus to purchasers at or prior to the time of any sale of the shares
offered hereby. The selling shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act of 1933.
We will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act upon being notified by a selling
shareholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose:
o the name of each such selling shareholder and of the participating
broker-dealer(s),
o the number of shares involved,
o the 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.
We have agreed to indemnify the selling shareholders and any person or
persons controlling the selling shareholders against certain liabilities,
including liabilities under the Securities Act of 1933. The selling shareholders
have agreed to indemnify us and certain related persons against certain
liabilities, including liabilities under the Securities Act of 1933.
We have the right to suspend use of this registration statement for
certain periods of time under certain conditions. We have agreed with the
selling shareholders to keep the registration statement of which this prospectus
constitutes a part effective the date on which all registrable securities
included within the registration statement have been sold.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities offered
hereby will be passed upon for us by Ellenoff Grossman Schole & Cyruli, LLP, New
York, New York.
EXPERTS
The consolidated financial statements for the years ended December 31,
2000 and 1999, incorporated by reference in this prospectus have been included
in reliance on the report of Grant Thornton LLP, independent certified public
accountants, given on the authority of said firm as experts in auditing and
accounting.
13
8,092,635 Shares
ALADDIN SYSTEMS
HOLDINGS, INC.
----------
Common Stock
PROSPECTUS
July 31, 2001
14
ALADDIN SYSTEMS HOLDINGS, INC.
REGISTRATION STATEMENT ON FORM S-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14 Other Expenses of Issuance and Distribution.
The following table sets forth costs and expenses of the sale and
distribution of the securities being registered. All amounts except the
registration fees are estimates.
---------------------------------------------------------------
Registration fee $1,032.00
---------------------------------------------------------------
Printing expenses $500.00
---------------------------------------------------------------
Accounting Fees $5,000.00
---------------------------------------------------------------
Legal Fees $5,000.00
---------------------------------------------------------------
Miscellaneous $1,000.00
---------------------------------------------------------------
Total $12,532.00
---------------------------------------------------------------
Item 15 Indemnification of Directors and Officers.
The General Corporation Law of Nevada limits the liability of officers and
directors for breach of fiduciary duty except in certain specified
circumstances, and also empowers corporations organized under Nevada Law to
indemnify officers, directors, employees and others from liability in certain
circumstances such as where the person successfully defended himself on the
merits or acted in good faith in a manner reasonably believed to be in the best
interests of the corporation.
Our Articles of Incorporation, with certain exceptions, eliminate any
personal liability of a directors or officers to us or our stockholders for
monetary damages for the breach of such person's fiduciary duty, and, therefore,
an officer or director cannot be held liable for damages to us or our
stockholders for gross negligence or lack of due care in carrying out his (or
her) fiduciary duties as a director or officer except in certain specified
instances. We may also adopt by-laws which provide for indemnification to the
full extent permitted under law which includes all liability, damages and costs
or expenses arising from or in connection with service for, employment by, or
other affiliation with us to the maximum extent and under all circumstances
permitted by law.
There is no pending litigation or proceeding involving one of our
directors, officers, employees or other agents as to which indemnification is
being sought, and we are not aware of any pending or threatened litigation that
may result in claims for indemnification by any director, officer, employee or
other agent.
We have purchased directors and officers liability insurance to defend and
indemnify directors and officers who are subject to claims made against them for
their actions and omissions as directors and officers of Aladdin. The insurance
policy provides standard directors and officers liability insurance in the
amount of $1,000,000.
We intend to enter into indemnification agreements with our directors and
officers. These agreements will provide, in general, that we shall indemnify and
hold harmless such directors and officers to the fullest extent permitted by law
against any judgments, fines, amounts paid in settlement, and expenses
(including attorneys' fees and disbursements) incurred in connection with, or in
any way arising
15
out of, any claim, action or proceeding (whether civil or criminal) against, or
affecting, such directors and officers resulting from, relating to or in any way
arising out of, the service of such persons as our directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons pursuant to
the foregoing provisions or otherwise, we have has been advised that in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
Item 16 Exhibits
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5.1 Opinion of Ellenoff Grossman Schole & Cyruli, LLP
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23.1 Consent of Grant Thornton LLP
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23.2 Consent of Ellenoff Grossman Schole & Cyruli, LLP
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Item 17 Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial 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.
The undersigned hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Watsonville, State of California, on the 3rd day
of August, 2001.
Aladdin Systems Holdings, Inc.
By /s/ Jonathan Kahn
----------------------------------------
Jonathan Kahn, Chairman of the Board and
Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jonathan Kahn, his or her
attorneys-in-fact, each with the power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement on Form S-3 (including post-effective amendments or
any abbreviated registration statement and any amendments thereto filed pursuant
to Rule 462(b) increasing the number of securities for which registration is
sought), and to file the same, with all exhibits thereto and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof. Pursuant to the requirements
of the Securities Act of 1933, as amended, this Registration Statement has been
signed by the following persons in the capacities indicated below on the 3rd day
of August, 2001.
Signature /s/ Jonathan Kahn Title
Jonathan Kahn Chairman of the Board and
Chief Executive Officer
[tba]
INDEX TO EXHIBITS
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Exhibit
Number
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5.1 Opinion of Ellenoff Grossman Schole & Cyruli, LLP
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23.1 Consent of Grant Thornton LLP
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23.2 Consent of Ellenoff Grossman Schole & Cyruli, LLP
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17