Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-136249
PROSPECTUS
4,238,250
Shares
Common
Stock
This
prospectus relates to the resale of up to 4,238,250 shares of common stock
of
LivePerson, Inc. that may be offered and sold from time to time by the selling
stockholders named in this prospectus. Our registration of the resale of the
shares held by certain of the selling stockholders is required by the definitive
Agreement and Plan of Merger, dated as of June 22, 2006 (the “Merger
Agreement”), between LivePerson, Proficient Systems, Inc. (“Proficient”), Soho
Acquisition Corp. (a wholly-owned subsidiary of LivePerson) and Gregg Freishtat
(as the Proficient shareholders’ representative), pursuant to which LivePerson
acquired Proficient in a merger transaction. Pursuant to the Merger Agreement,
we will issue up to 4,050,000 shares of common stock to the selling stockholders
who are former Proficient shareholders. The exact number of shares will be
determined according to, among other things, an earn-out formula contained
in
the Merger Agreement. The shares are expected to be issued at various times
both
before and after the effective date of the registration statement of which
this prospectus forms a part. Any shares registered for resale on such
registration statement, but not actually issued to these selling stockholders
pursuant to the earn-out formula, will be deregistered under the Securities
Act
of 1933, as amended. In addition, a portion of the shares covered by this
prospectus are issuable upon the exercise of outstanding warrants held
by certain of the selling stockholders. This prospectus also relates to the
resale of shares that may be issued pursuant to the terms of the warrants to
prevent dilution resulting from stock splits, stock dividends and similar
transactions.
We
will
not receive any proceeds from the sale of the shares of common stock covered
by
this prospectus. The selling stockholders may offer their shares through public
or private transactions at prevailing market prices or at privately negotiated
prices. The selling stockholders may make sales directly to purchasers or
through brokers, agents, dealers or underwriters or through a combination of
these methods. The selling stockholders will bear all commissions and other
compensation paid to brokers in connection with the sale of their
shares.
Our
common stock is quoted on the Nasdaq Capital Market under the symbol “LPSN”. On
September 25, 2006, the closing sale price of our common stock was $5.80 per
share.
Investing
in our common stock involves risks.
See
“Risk Factors” beginning on page 2.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date
of this prospectus is September 25, 2006.
TABLE
OF CONTENTS
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Page
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PROSPECTUS
SUMMARY
|
1
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|
RISK
FACTORS
|
2
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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14
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USE
OF PROCEEDS
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14
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DILUTION
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14
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SELLING
STOCKHOLDERS
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15
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PLAN
OF DISTRIBUTION
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17
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LEGAL
MATTERS
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19
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EXPERTS
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19
|
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WHERE
YOU CAN FIND MORE INFORMATION
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20
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You
should rely only on the information contained in this prospectus. We have not,
and the selling stockholders have not, authorized anyone to provide you with
information different from that contained in this prospectus. The selling
stockholders are not making an offer to sell or seeking offers to buy these
securities in any jurisdiction where the offer or sale is not permitted. The
information contained in this prospectus is complete and accurate as of the
date
of this prospectus, but the information may have changed since that
date.
Unless
the context otherwise indicates, references in this prospectus to the terms
“LivePerson,” “we,” “our” and “us” refer to LivePerson, Inc. and LivePerson’s
subsidiaries. This prospectus contains other product names, trade names, service
marks and trade marks of LivePerson and of other organizations.
i
PROSPECTUS
SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus
or incorporated by reference in this prospectus. This summary does not contain
all of the information that you should consider before investing in our common
stock. You should read carefully the entire prospectus, including “Risk Factors”
and the other information contained or incorporated by reference in this
prospectus, before making an investment decision.
LivePerson
is a provider of online conversion solutions. Our hosted software enables
companies to identify and proactively engage online visitors—increasing sales,
satisfaction and loyalty while reducing service costs.
LivePerson’s
fully-integrated multi-channel communications platform, Timpani, facilitates
real-time sales, marketing and customer service. Our technology supports and
manages key online interactions—via chat, email and
self-service/knowledgebase—in a cost-effective and secure environment. Blending
leading technology, a deep understanding of consumer behavior and industry
best
practices to create more relevant, compelling and personalized online
experiences, LivePerson maximizes the business impact of the online
channel.
Our
principal executive offices are located at 462 Seventh Avenue, New York, New
York, 10018. Our telephone number is (212) 609-4200.
The
address of our principal website is www.liveperson.com.
Our
website address is provided solely for informational purposes, and the
information contained on our website does not constitute part of this
prospectus.
1
RISK
FACTORS
An
investment in our common stock involves a high degree of risk. You should
consider carefully the risks described below, together with the other
information contained in this prospectus, before deciding to invest in our
common stock. These risks could have a material and adverse impact on our
business, results of operations and financial condition. If that were to happen,
the trading price of our common stock could decline, and you could lose all
or
part of your investment.
Risks
Related to Our Business
We
have a history of losses, we had an accumulated deficit of $101.4 million as
of
December 31, 2005 and we may incur losses in the
future.
Although
we have achieved profitability in each three-month period from and including
the
period ended September 30, 2003, we may, in the future, incur losses and
experience negative cash flow, either or both of which may be significant.
We
recorded net losses of $6.8 million for the year ended December 31, 2002
and $816,000 for the year ended December 31, 2003. We recorded net income
of $2.1 million for the year ended December 31, 2004 and $2.5 million for
the year ended December 31, 2005. As of December 31, 2005, our
accumulated deficit was approximately $101.4 million. We cannot assure you
that
we can sustain or increase profitability on a quarterly or annual basis in
the
future. Failure to maintain profitability may materially and adversely affect
the market price of our common stock.
Our
quarterly revenue and operating results are subject to significant fluctuations,
which may adversely affect the trading price of our common
stock.
Our
quarterly revenue and operating results may fluctuate significantly in the
future due to a variety of factors, including the following factors which are
in
part within our control, and in part outside of our control:
| · |
market
acceptance by companies doing business online of real-time sales,
marketing and customer service
solutions;
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our
clients’ business success;
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our
clients’ demand for our services;
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our
ability to attract and retain
clients;
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the
amount and timing of capital expenditures and other costs relating
to the
expansion of our operations, including those related to
acquisitions;
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the
introduction of new services by us or our competitors;
and
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changes
in our pricing policies or the pricing policies of our
competitors.
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Our
revenue and results may also fluctuate significantly in the future due to the
following factors that are entirely outside of our control:
| · |
economic
conditions specific to the Internet, electronic commerce and online
media;
and
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general
economic and political conditions.
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2
Period-to-period
comparisons of our operating results may not be meaningful because of these
factors. You should not rely upon these comparisons as indicators of our future
performance.
Due
to
the foregoing factors, it is possible that our results of operations in one
or
more future quarters may fall below the expectations of securities analysts
and
investors. If this occurs, the trading price of our common stock could
decline.
We
may be unable to respond to the rapid technological change and changing client
preferences in the online sales, marketing and customer service industry and
this may harm our business.
If
we are
unable, for technological, legal, financial or other reasons, to adapt in a
timely manner to changing market conditions in the online sales, marketing
and
customer service industry or our clients’ or Internet users’ requirements, our
business, results of operations and financial condition would be materially
and
adversely affected. Business on the Internet is characterized by rapid
technological change. In addition, the market for online sales, marketing and
customer service solutions is relatively new. Sudden changes in client and
Internet user requirements and preferences, frequent new product and service
introductions embodying new technologies, such as broadband communications,
and
the emergence of new industry standards and practices could render the
LivePerson services and our proprietary technology and systems obsolete. The
rapid evolution of these products and services will require that we continually
improve the performance, features and reliability of our services. Our success
will depend, in part, on our ability to:
| · |
enhance
the features and performance of the LivePerson
services;
|
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develop
and offer new services that are valuable to companies doing business
online and Internet users; and
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respond
to technological advances and emerging industry standards and practices
in
a cost-effective and timely manner.
|
If
any of
our new services, including upgrades to our current services, do not meet our
clients’ or Internet users’ expectations, our business may be harmed. Updating
our technology may require significant additional capital expenditures and
could
materially and adversely affect our business, results of operations and
financial condition.
If
new
services require us to grow rapidly, this could place a significant strain
on
our managerial, operational, technical and financial resources. In order to
manage our growth, we could be required to implement new or upgraded operating
and financial systems, procedures and controls. Our failure to expand our
operations in an efficient manner could cause our expenses to grow, our revenue
to decline or grow more slowly than expected and could otherwise have a material
adverse effect on our business, results of operations and financial
condition.
If
we are not competitive in the market for real-time sales, marketing and customer
service solutions, our business could be harmed.
The
market for online sales, marketing and customer service technology is intensely
competitive and characterized by aggressive marketing, evolving industry
standards, rapid technology developments and frequent new product introductions.
Relatively few substantial barriers to entry in this market exist, but include
the ability to design and build scalable software, develop and maintain strong
ongoing client relationships with clients of all sizes and, with respect to
outsourced solution providers, the ability to design, build and manage a
scalable network infrastructure. Established or new entities may enter this
market in the near future, including those that provide real-time interaction
online, with or without the user’s request.
We
compete directly with companies focused on technology that facilitates real-time
sales, email management, searchable knowledgebase applications and customer
service interaction. These markets remain fairly saturated with small companies
that compete on price and features. We face significant competition from online
interaction solution providers, including RightNow Technologies and Instant
Service, each of which offers hosted applications. While the online conversion
market that Timpani Sales and Marketing addresses is fragmented, we face
potential competition from Web analytics and online marketing service providers.
The most significant barriers to entry in this market are knowledge
of:
3
| · |
Online
consumer purchasing habits
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Methodologies
to correctly engage customers
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Metrics
proving return on investment
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Technology
innovation opportunities
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Furthermore,
many of our competitors offer a broader range of customer relationship
management products and services than we currently offer. We may be
disadvantaged and our business may be harmed if companies doing business online
choose real-time sales, marketing and customer service solutions from such
providers.
We
also
face potential competition from larger enterprise software companies such as
Oracle. In addition, more established technology companies such as Microsoft,
Yahoo and Google may leverage their existing relationships and capabilities
to
offer real-time sales, marketing and customer service applications.
Finally,
we face competition from clients and potential clients that choose to provide
a
real-time sales, marketing and customer service solution in-house as well as,
to
a lesser extent, traditional offline customer service solutions, such as
telephone call centers.
We
believe that competition will increase as our current competitors increase
the
sophistication of their offerings and as new participants enter the market.
Many
of our larger current and potential competitors have:
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longer
operating histories;
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greater
brand recognition;
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more
diversified lines of products and services;
and
|
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significantly
greater financial, marketing and research and development
resources.
|
Some
competitors may enter into strategic or commercial relationships with larger,
more established and better-financed companies. These competitors may be able
to:
| · |
undertake
more extensive marketing campaigns;
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adopt
more aggressive pricing policies;
and
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make
more attractive offers to businesses to induce them to use their
products
or services.
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Any
delay
in the general market acceptance of the real-time sales, marketing and customer
service solution business model would likely harm our competitive position.
Delays would allow our competitors additional time to improve their service
or
product offerings, and would also provide time for new competitors to develop
real-time sales, marketing, customer service and Web analytics applications
and
solicit prospective clients within our target markets. Increased competition
could result in pricing pressures, reduced operating margins and loss of market
share.
4
The
success of our business is dependent on the retention of existing clients and
their purchase of additional LivePerson services.
Our
LivePerson services agreements typically have twelve month terms and are
terminable upon 30 to 90 days’ notice without penalty. If a significant number
of our clients, or any one client to whom we provide a significant amount of
services, were to terminate these services agreements, or reduce the amount
of
services purchased or fail to purchase additional services, our results of
operations may be negatively and materially affected. Dissatisfaction with
the
nature or quality of our services could also lead clients to terminate our
service. We depend on monthly fees from the LivePerson services for
substantially all of our revenue. If our retention rate declines, our revenue
could decline unless we are able to obtain additional clients or alternate
revenue sources. Further, because of the historically small amount of services
sold in initial orders, we depend on sales to new clients and sales of
additional services to our existing clients.
We
are dependent on technology systems that are beyond our
control.
The
success of the LivePerson services depends in part on our clients’ online
services as well as the Internet connections of visitors to their Web sites,
both of which are outside of our control. As a result, it may be difficult
to
identify the source of problems if they occur. In the past, we have experienced
problems related to connectivity which have resulted in slower than normal
response times to Internet user chat requests and messages and interruptions
in
service. The LivePerson services rely both on the Internet and on our
connectivity vendors for data transmission. Therefore, even when connectivity
problems are not caused by the LivePerson services, our clients or Internet
users may attribute the problem to us. This could diminish our brand and harm
our business, divert the attention of our technical personnel from our product
development efforts or cause significant client relations problems.
In
addition, we rely on two third-party Web hosting service providers for Internet
connectivity and network infrastructure hosting, security and maintenance.
These
providers have, in the past, experienced problems that have resulted in slower
than normal response times and interruptions in service. If we are unable to
continue utilizing the services of our existing Web hosting providers or if
our
Web hosting services experience interruptions or delays, it is possible that
our
business could be harmed.
Our
service also depends on third parties for hardware and software, which products
could contain defects. Problems arising from our use of such hardware or
software could require us to incur significant costs or divert the attention
of
our technical personnel from our product development efforts. To the extent
any
such problems require us to replace such hardware or software, we may not be
able to do so on acceptable terms, if at all.
Technological
defects could disrupt our services, which could harm our business and
reputation.
We
face
risks related to the technological capabilities of the LivePerson services.
We
expect the number of interactions between our clients’ operators and Internet
users over our system to increase significantly as we expand our client base.
Our network hardware and software may not be able to accommodate this additional
volume. Additionally, we must continually upgrade our software to improve the
features and functionality of the LivePerson services in order to be competitive
in our market. If future versions of our software contain undetected errors,
our
business could be harmed. As a result of major software upgrades at LivePerson,
our client sites have, from time to time, experienced slower than normal
response times and interruptions in service. If we experience system failures
or
degraded response times, our reputation and brand could be harmed. We may also
experience technical problems in the process of installing and initiating the
LivePerson services on new Web hosting services. These problems, if unremedied,
could harm our business.
The
LivePerson services also depend on complex software which may contain defects,
particularly when we introduce new versions onto our servers. We may not
discover software defects that affect our new or current services or
enhancements until after they are deployed. It is possible that, despite testing
by us, defects may occur in the software. These defects could result
in:
5
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damage
to our reputation;
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lost
sales;
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delays
in or loss of market acceptance of our products;
and
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unexpected
expenses and diversion of resources to remedy
errors.
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Our
clients may experience adverse business conditions that could adversely affect
our business.
Some
of
our clients may experience difficulty in supporting their current operations
and
implementing their business plans. These clients may reduce their spending
on
our services, or may not be able to discharge their payment and other
obligations to us. These circumstances are influenced by general economic and
industry-specific conditions, and could have a material adverse impact on our
business, financial condition and results of operations. In addition, as a
result of these conditions, our clients, in particular our Internet-related
clients that may experience (or that anticipate experiencing) difficulty raising
capital, may elect to scale back the resources they devote to customer service
technology, including services such as ours. If the current environment for
our
clients, including, in particular, our Internet-related clients, does not
improve, our business, results of operations and financial condition could
be
materially adversely affected. In addition, the non-payment or late payment
of
amounts due to us from a significant number of clients would negatively impact
our financial condition. During 2005, we increased our allowance for doubtful
accounts by $30,000 to approximately $84,000, principally due to an increase
in
accounts receivable as a result of increased sales, and we wrote off
approximately $17,000 of previously reserved accounts, leaving a net allowance
of $67,000 at December 31, 2005. During 2004, we increased our allowance
for doubtful accounts by $30,000 to approximately $94,000, principally due
to an
increase in accounts receivable as a result of increased sales, and we wrote
off
approximately $40,000 of previously reserved accounts, leaving a net allowance
of $54,000 at December 31, 2004.
Our
business is significantly dependent on our ability to retain our current key
personnel, to attract new personnel, and to manage staff
attrition.
Our
future success depends to a significant extent on the continued services of
our
senior management team, including Robert P. LoCascio, our founder and Chief
Executive Officer. The loss of the services of any member of our senior
management team, in particular Mr. LoCascio, could have a material and
adverse effect on our business, results of operations and financial condition.
We cannot assure you that we would be able to successfully integrate newly-hired
senior managers who would work together successfully with our existing
management team.
We
may be
unable to attract, integrate or retain other highly qualified employees in
the
future. If our retention efforts are ineffective, employee turnover could
increase and our ability to provide services to our clients would be materially
and adversely affected. Furthermore, the new requirement to expense stock
options may discourage us from granting the size or type of stock option awards
that job candidates may require to join our company.
Any
staff
attrition we experience, whether initiated by the departing employees or by
us,
could place a significant strain on our managerial, operational, financial
and
other resources. To the extent that we do not initiate or seek any staff
attrition that occurs, there can be no assurance that we will be able to
identify and hire adequate replacement staff promptly, if at all, and even
that
if such staff is replaced, we will be successful in integrating these employees.
In addition, we may not be able to outsource certain functions. We expect to
evaluate our needs and the performance of our staff on a periodic basis, and
may
choose to make adjustments in the future. If the size of our staff is
significantly reduced, either by our choice or otherwise, it may become more
difficult for us to manage existing, or establish new, relationships with
clients and other counter-parties, or to expand and improve our service
offerings. It may also become more difficult for us to implement changes to
our
business plan or to respond promptly to opportunities in the marketplace.
Further, it may become more difficult for us to devote personnel resources
necessary to maintain or improve existing systems, including our financial
and
managerial controls, billing systems, reporting systems and procedures. Thus,
any significant amount of staff attrition could cause our business and financial
results to suffer.
6
We
believe our reported financial results may be adversely affected by changes
in
accounting principles generally accepted in the United
States.
Generally
accepted accounting principles in the United States are subject to
interpretation by the FASB, the American Institute of Certified Public
Accountants, the SEC, and various bodies formed to promulgate and interpret
appropriate accounting principles. A change in these principles or
interpretations could have a significant effect on our reported financial
results, and could affect the reporting of transactions completed before the
announcement of a change.
For
example, in December 2004, the FASB announced its decision to require companies
to expense employee stock options by issuing SFAS No. 123 (revised 2004),
“Share-Based Payment.” In April 2005, the SEC announced a new rule that delays
the implementation of SFAS No. 123(R) until the fiscal year that begins after
June 15, 2005. We adopted the provisions of SFAS No. 123(R) as of January 1,
2006. We believe this change in accounting will have a material adverse effect
on our reported results of operations. Based upon the current number of
outstanding stock options, we expect that the impact of this accounting change
will decrease net income per common share by approximately $0.05 for the fiscal
year ended 2006. This figure may change based upon additional stock options
grants, methodology refinement or other factors. Through the six months ended
June 30, 2006, we have recorded approximately $1.0 million in stock-based
compensation expense related to the adoption of SFAS No. 123(R).
We
cannot predict our future capital needs to execute our business strategy and
we
may not be able to secure additional financing.
We
believe that our current cash and cash equivalents and cash generated from
operations, if any, will be sufficient to fund our working capital and capital
expenditure requirements for at least the next twelve months. To the extent
that
we require additional funds to support our operations or the expansion of our
business, or to pay for acquisitions, we may need to sell additional equity,
issue debt or convertible securities or obtain credit facilities through
financial institutions. In the past, we have obtained financing principally
through the sale of preferred stock, common stock and warrants. If additional
funds are raised through the issuance of debt or preferred equity securities,
these securities could have rights, preferences and privileges senior to holders
of common stock, and could have terms that impose restrictions on our
operations. If additional funds are raised through the issuance of additional
equity or convertible securities, our stockholders could suffer dilution. We
cannot assure you that additional funding, if required, will be available to
us
in amounts or on terms acceptable to us. If sufficient funds are not available
or are not available on acceptable terms, our ability to fund any potential
expansion, take advantage of acquisition opportunities, develop or enhance
our
services or products, or otherwise respond to competitive pressures would be
significantly limited. Those limitations would materially and adversely affect
our business, results of operations and financial condition.
If
we do not successfully integrate recent or potential future acquisitions, our
business could be harmed.
On
July
18, 2006, we completed our acquisition of Proficient Systems, Inc.
(“Proficient”). In the future, we may acquire or invest in complementary
companies, products or technologies. Acquisitions and investments involve
numerous risks to us, including:
| · |
difficulties
in integrating operations, technologies, products and personnel with
LivePerson;
|
| · |
diversion
of financial and management resources from efforts related to the
LivePerson services or other then-existing operations; risks of entering
new markets beyond providing real-time sales, marketing and customer
service solutions for companies doing business
online;
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7
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potential
loss of either our existing key employees or key employees of any
companies we acquire; and
|
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our
inability to generate sufficient revenue to offset acquisition or
investment costs.
|
These
difficulties could disrupt our ongoing business, distract our management and
employees, increase our expenses and adversely affect our results of operations.
Our agreement to acquire Proficient requires us to issue equity securities.
The
issuance of equity securities could be dilutive to our existing stockholders.
Furthermore, we may incur debt or issue equity securities to pay for any future
acquisitions.
We
could face additional regulatory requirements, tax liabilities and other risks
as we expand internationally.
In
October 2000, we acquired HumanClick, an Israeli-based provider of real-time
online customer service applications. In addition, we have recently established
a sales, marketing and client support presence in the United Kingdom in support
of expansion efforts into Western Europe. There are risks related to doing
business in international markets, such as changes in regulatory requirements,
tariffs and other trade barriers, fluctuations in currency exchange rates,
more
stringent rules relating to the privacy of Internet users and adverse tax
consequences. In addition, there are likely to be different consumer preferences
and requirements in specific international markets. Furthermore, we may face
difficulties in staffing and managing any foreign operations. One or more of
these factors could harm any future international operations.
Political,
economic and military conditions in Israel could negatively impact our Israeli
operations.
Our
product development staff, help desk and online sales personnel are located
in
Israel. As of June 30, 2006, we had 61 full-time employees in Israel and as
of
December 31, 2005, we had 51 full-time employees in Israel. Although
substantially all of our sales to date have been made to customers outside
Israel, we are directly influenced by the political, economic and military
conditions affecting Israel. Since the establishment of the State of Israel
in
1948, a number of armed conflicts have taken place between Israel and its Arab
neighbors. A state of hostility, varying in degree and intensity, has caused
security and economic problems in Israel. Since September 2000, there has been
a
marked increase in violence, civil unrest and hostility, including armed
clashes, between the State of Israel and the Palestinians, primarily but not
exclusively in the West Bank and Gaza Strip. The election of representatives
of
the Hamas movement to a majority of seats in the Palestinian Legislative Council
in January 2006 has created additional unrest and uncertainty. Recently, there
has been a sharp increase in hostilities along Israel’s northern border with
Lebanon. Efforts to resolve the conflict have failed to result in an agreeable
solution. Continued hostilities between Israel and its neighbors and any failure
to settle the conflict could adversely affect our operations in Israel and
our
business. Further deterioration of the situation into a full-scale armed
conflict might require more widespread military reserve service by some of
our
Israeli employees and might result in a significant downturn in the economic
or
financial condition of Israel, either of which could have a material adverse
effect on our operations in Israel and our business. In addition, several Arab
countries still restrict business with Israeli companies. Our operations in
Israel could be adversely affected by restrictive laws or policies directed
towards Israel and Israeli businesses.
Our
reputation depends, in part, on factors which are entirely outside of our
control.
Our
services typically appear as a LivePerson-branded, Timpani-branded or a
custom-created icon on our clients’ Web sites. The customer service operators
who respond to the inquiries of our clients’ Internet users are employees or
agents of our clients; they are not our employees. As a result, we have no
way
of controlling the actions of these operators. In addition, an Internet user
may
not know that the operator is an employee or agent of our client, rather than
a
LivePerson employee. If an Internet user were to have a negative experience
in a
LivePerson-powered real-time dialogue, it is possible that this experience
could
be attributed to us, which could diminish our brand and harm our business.
Finally, we believe the success of our services depend on the prominent
placement of the icon on the client’s Web site, over which we also have no
control.
8
Our
business and prospects would suffer if we are unable to protect and enforce
our
intellectual property rights.
Our
success and ability to compete depend, in part, upon the protection of our
intellectual property rights relating to the technology underlying the
LivePerson services. It is possible that:
| · |
any
issued patent or patents issued in the future may not be broad enough
to
protect our intellectual property
rights;
|
| · |
any
issued patent or any patents issued in the future could be successfully
challenged by one or more third parties, which could result in our
loss of
the right to prevent others from exploiting the inventions claimed
in the
patents;
|
| · |
current
and future competitors may independently develop similar technologies,
duplicate our services or design around any patents we may have;
and
|
| · |
effective
patent protection may not be available in every country in which
we do
business, where our services are sold or used, where the laws may
not
protect proprietary rights as fully as do the laws of the U.S. or
where
enforcement of laws protecting proprietary rights is not common or
effective.
|
Further,
to the extent that the invention described in any U.S. patent was made public
prior to the filing of the patent application, we may not be able to obtain
patent protection in certain foreign countries. We also rely upon copyright,
trade secret, trademark and other common law in the U.S. and other
jurisdictions, as well as confidentiality procedures and contractual provisions,
to protect our proprietary technology, processes and other intellectual
property, to the extent that protection is sought or secured at all. Any steps
we might take may not be adequate to protect against infringement and
misappropriation of our intellectual property by third parties. Similarly,
third
parties may be able to independently develop similar or superior technology,
processes or other intellectual property. Policing unauthorized use of our
services and intellectual property rights is difficult, and we cannot be certain
that the steps we have taken will prevent misappropriation of our technology
or
intellectual property rights, particularly in foreign countries where we do
business, where our services are sold or used, where the laws may not protect
proprietary rights as fully as do the laws of the United States or where
enforcement of laws protecting proprietary rights is not common or effective.
The unauthorized reproduction or other misappropriation of our intellectual
property rights could enable third parties to benefit from our technology
without paying us for it. If this occurs, our business, results of operations
and financial condition could be materially and adversely affected. In addition,
disputes concerning the ownership or rights to use intellectual property could
be costly and time-consuming to litigate, may distract management from operating
our business and may result in our loss of significant rights.
Our
products and services may infringe upon intellectual property rights of third
parties and any infringement could require us to incur substantial costs and
may
distract our management.
We
are
subject to the risk of claims alleging infringement of third-party proprietary
rights. Substantial litigation regarding intellectual property rights exists
in
the software industry. In the ordinary course of our business, our services
may
be increasingly subject to third-party infringement claims as the number of
competitors in our industry segment grows and the functionality of services
in
different industry segments overlaps. Some of our competitors in the market
for
real-time sales, marketing and customer service solutions may have filed or
may
intend to file patent applications covering aspects of their technology. Any
claims alleging infringement of third-party intellectual property rights could
require us to spend significant amounts in litigation (even if the claim is
invalid), distract management from other tasks of operating our business, pay
substantial damage awards, prevent us from selling our products, delay delivery
of the LivePerson services, develop non-infringing software, technology,
business processes, systems or other intellectual property (none of which might
be successful), or limit our ability to use the intellectual property that
is
the subject of any of these claims, unless we enter into license agreements
with
the third parties (which may be unavailable on commercially reasonable terms,
or
not available at all). Therefore, such claims could have a material adverse
effect on our business, results of operations and financial
condition.
9
We
may be liable if third parties misappropriate personal information belonging
to
our clients’ Internet users.
We
maintain dialogue transcripts of the text-based chats and email interactions
between our clients and Internet users and store on our servers information
supplied voluntarily by these Internet users in surveys. We provide this
information to our clients to allow them to perform Internet user analyses
and
monitor the effectiveness of our services. Some of the information we collect
may include personal information, such as contact and demographic information.
If third parties were able to penetrate our network security or otherwise
misappropriate personal information relating to our clients’ Internet users or
the text of customer service inquiries, we could be subject to liability. We
could be subject to negligence claims or claims for misuse of personal
information. These claims could result in litigation, which could have a
material adverse effect on our business, results of operations and financial
condition. We may incur significant costs to protect against the threat of
security breaches or to alleviate problems caused by such breaches.
The
need
to physically secure and securely transmit confidential information online
has
been a significant barrier to electronic commerce and online communications.
Any
well-publicized compromise of security could deter people from using online
services such as the ones we offer, or from using them to conduct transactions,
which involve transmitting confidential information. Because our success depends
on the general acceptance of our services and electronic commerce, we may incur
significant costs to protect against the threat of security breaches or to
alleviate problems caused by these breaches.
Risks
Related to Our Industry
We
are dependent on the continued use of the Internet as a medium for
commerce.
We
cannot
be sure that a sufficiently broad base of consumers will continue to use the
Internet as a medium for commerce. Convincing our clients to offer real-time
sales, marketing and customer service technology may be difficult. The
continuation of the Internet as a viable commercial marketplace is subject
to a
number of factors, including:
| · |
continued
growth in the number of users;
|
| · |
concerns
about transaction security;
|
| · |
continued
development of the necessary technological
infrastructure;
|
| · |
development
of enabling technologies;
|
| · |
uncertain
and increasing government regulation;
and
|
| · |
the
development of complementary services and
products.
|
We
depend on the continued viability of the infrastructure of the
Internet.
To
the
extent that the Internet continues to experience growth in the number of users
and frequency of use by consumers resulting in increased bandwidth demands,
we
cannot assure you that the infrastructure for the Internet will be able to
support the demands placed upon it. The Internet has experienced outages and
delays as a result of damage to portions of its infrastructure. Outages or
delays could adversely affect online sites, email and the level of traffic
on
the Internet. We also depend on Internet service providers that provide our
clients and Internet users with access to the LivePerson services. In the past,
users have experienced difficulties due to system failures unrelated to our
service. In addition, the Internet could lose its viability due to delays in
the
adoption of new standards and protocols required to handle increased levels
of
Internet activity. Insufficient availability of telecommunications services
to
support the Internet also could result in slower response times and negatively
impact use of the Internet generally, and our clients’ sites (including the
LivePerson dialogue windows) in particular. If the use of the Internet fails
to
grow or grows more slowly than expected, if the infrastructure for the Internet
does not effectively support growth that may occur or if the Internet does
not
become a viable commercial marketplace, we may not maintain profitability and
our business, results of operations and financial condition will
suffer.
10
We
may become subject to burdensome government regulation and legal
uncertainties.
We
are
subject to federal, state and local regulation, and laws of jurisdictions
outside of the United States, including laws and regulations applicable to
computer software and access to or commerce over the Internet. Due to the
increasing popularity and use of the Internet and various other online services,
it is likely that a number of new laws and regulations will be adopted with
respect to the Internet or other online services covering issues such as user
privacy, freedom of expression, pricing, content and quality of products and
services, taxation, advertising, intellectual property rights and information
security. The nature of such legislation and the manner in which it may be
interpreted and enforced cannot be fully determined and, therefore, such
legislation could subject us and/or our clients or Internet users to potential
liability, which in turn could have a material adverse effect on our business,
results of operations and financial condition.
As
a
result of collecting data from live online Internet user dialogues, our clients
may be able to analyze the commercial habits of Internet users. Privacy concerns
may cause Internet users to avoid online sites that collect such behavioral
information and even the perception of security and privacy concerns, whether
or
not valid, may indirectly inhibit market acceptance of our services. In
addition, we or our clients may be harmed by any laws or regulations that
restrict the ability to collect or use this data. The European Union and many
countries within the E.U. have adopted privacy directives or laws that strictly
regulate the collection and use of personally identifiable information of
Internet users. The United States has adopted legislation which governs the
collection and use of certain personal information. The U.S. Federal Trade
Commission has also taken action against Web site operators who do not comply
with their stated privacy policies. Furthermore, other foreign jurisdictions
have adopted legislation governing the collection and use of personal
information. These and other governmental efforts may limit our clients’ ability
to collect and use information about their Internet users through our services.
As a result, such laws and efforts could create uncertainty in the marketplace
that could reduce demand for our services or increase the cost of doing business
as a result of litigation costs or increased service delivery costs, or could
in
some other manner have a material adverse effect on our business, results of
operations and financial condition.
For
example, the LivePerson services allow our clients to capture and save
information about Internet users, possibly without their knowledge.
Additionally, our service uses a tool, commonly referred to as a “cookie,” to
uniquely identify each of our clients’ Internet users. To the extent that
additional legislation regarding Internet user privacy is enacted, such as
legislation governing the collection and use of information regarding Internet
users through the use of cookies, the effectiveness of the LivePerson services
could be impaired by restricting us from collecting information which may be
valuable to our clients. The foregoing could have a material adverse effect
our
business, results of operations and financial condition.
In
addition to privacy legislation, any new legislation or regulation regarding
the
Internet, or the application of existing laws and regulations to the Internet,
could harm us. Additionally, as we operate outside the U.S., the international
regulatory environment relating to the Internet could have a material adverse
effect on our business, results of operations and financial
condition.
Security
concerns could hinder commerce on the Internet.
User
concerns about the security of confidential information online has been a
significant barrier to commerce on the Internet and online communications.
Any
well-publicized compromise of security could deter people from using the
Internet or other online services or from using them to conduct transactions
that involve the transmission of confidential information. If Internet commerce
is inhibited as a result of such security concerns, our business would be
harmed.
11
Other
Risks
Our
stockholders who each own greater than five percent of the outstanding common
stock, and our executive officers and directors, will be able to influence
matters requiring a stockholder vote.
Our
stockholders who each own greater than five percent of the outstanding common
stock and their affiliates, and our executive officers and directors, in the
aggregate, beneficially own approximately 42.1% of our outstanding common stock.
As a result, these stockholders, if acting together, will be able to
significantly influence all matters requiring approval by our stockholders,
including the election of directors and approval of significant corporate
transactions. This concentration of ownership could also have the effect of
delaying or preventing a change in control.
The
future sale of shares of our common stock may negatively affect our stock
price.
If
our
stockholders sell substantial amounts of our common stock, including shares
issuable upon the exercise of outstanding options and warrants in the public
market, or if our stockholders are perceived by the market as intending to
sell
substantial amounts of our common stock, the market price of our common stock
could fall. These sales also might make it more difficult for us to sell equity
securities in the future at a time and price that we deem appropriate. The
number of shares of common stock subject to the registration statement of which
this prospectus forms a part, and the registration statement we filed in January
2004, registering our issuance and sale from time to time of up to 4,000,000
shares of common stock, is much greater than the average weekly trading volume
for our shares. No prediction can be made as to the effect, if any, that market
sales of these or other shares of our common stock will have on the market
price
of our common stock.
Our
stock price has been highly volatile and may experience extreme price and volume
fluctuations in the future, which could reduce the value of your investment
and
subject us to litigation.
Fluctuations
in market price and volume are particularly common among securities of Internet
and other technology companies. The market price of our common stock has
fluctuated significantly in the past and may continue to be highly volatile,
with extreme price and volume fluctuations, in response to the following
factors, some of which are beyond our control:
| · |
variations
in our quarterly operating results;
|
| · |
changes
in market valuations of publicly-traded companies in general and
Internet
and other technology companies in
particular;
|
| · |
our
announcements of significant client contracts, acquisitions and our
ability to integrate these acquisitions, strategic partnerships,
joint
ventures or capital commitments;
|
| · |
our
failure to complete significant
sales;
|
| · |
additions
or departures of key personnel;
|
| · |
future
sales of our common stock;
|
| · |
changes
in financial estimates by securities analysts;
and
|
| · |
terrorist
attacks against the United States or in Israel, the engagement in
hostilities or an escalation of hostilities by or against the United
States or Israel, or the declaration of war or national emergency
by the
United States or Israel.
|
12
In
the
past, companies that have experienced volatility in the market price of their
stock have been the subject of securities class action litigation. We may in
the
future be the target of similar litigation, which could result in substantial
costs and distract management from other important aspects of operating our
business.
Anti-takeover
provisions in our charter documents and Delaware law may make it difficult
for a
third party to acquire us.
Provisions
of our amended and restated certificate of incorporation, such as our staggered
Board of Directors, the manner in which director vacancies may be filled and
provisions regarding the calling of stockholder meetings, could make it more
difficult for a third party to acquire us, even if doing so might be beneficial
to our stockholders. In addition, provisions of our amended and restated bylaws,
such as advance notice requirements for stockholder proposals, and applicable
provisions of Delaware law, such as the application of business combination
limitations, could impose similar difficulties. Further, provisions of our
amended and restated certificate of incorporation relating to directors,
stockholder meetings, limitation of director liability, indemnification and
amendment of the certificate of incorporation and bylaws may not be amended
without the affirmative vote of not less than 66.67% of the outstanding shares
of our capital stock entitled to vote generally in the election of directors
(considered for this purpose as a single class) cast at a meeting of our
stockholders called for that purpose. Our amended and restated bylaws may not
be
amended without the affirmative vote of at least 66.67% of our Board of
Directors or without the affirmative vote of not less than 66.67% of the
outstanding shares of our capital stock entitled to vote generally in the
election of directors (considered for this purpose as a single class) cast
at a
meeting of our stockholders called for that purpose.
13
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference herein contain
forward-looking statements. These statements relate to future events or our
future financial performance and involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity,
performance or achievements to differ materially from any future results, levels
of activity, performance or achievements expressed or implied by these
forward-looking statements. These risks and other factors include those listed
under “Risk Factors” and elsewhere in this prospectus. You can identify
forward-looking statements by terminology such as “may,” “might,” “will,”
“should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “continues” or the negative of these terms
or other similar expressions and comparable terminology. These expressions
and
terminology relate to, without limitation, statements about our acquisition
of Proficient, our market opportunities, our strategy, our competition, our
projected revenues and expense levels and the adequacy of our available cash
resources. You should not place undue reliance on these forward-looking
statements which apply only as of the date of this prospectus. Our actual
results could differ materially from those expressed or implied by these
forward-looking statements as a result of various factors, including the risk
factors described above and elsewhere in this prospectus. We undertake no
obligation to update publicly any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.
USE
OF PROCEEDS
We
will
not receive any of the proceeds from the sale of the shares of common stock
offered and sold pursuant to this prospectus. The selling stockholders will
not
pay any of the expenses that are incurred in connection with the registration
of
the shares, but they will pay all commissions, discounts and any other
compensation to any securities broker-dealers through whom they sell any of
the
shares.
DILUTION
None
of
the shares offered and sold pursuant to this prospectus are being sold by us.
Therefore, there will be no dilution in the net tangible book value per share
as
a result of the sale of the shares offered and sold pursuant to this
prospectus.
14
SELLING
STOCKHOLDERS
We
are
registering the resale of the shares of common stock held by certain of the
selling stockholders as required by the definitive Agreement and Plan of Merger,
dated as of June 22, 2006 (the “Merger Agreement”), between LivePerson,
Proficient Systems, Inc. (“Proficient”), Soho Acquisition Corp. (a wholly-owned
subsidiary of LivePerson) and Gregg Freishtat (as the Proficient shareholders’
representative), pursuant to which LivePerson acquired Proficient in a merger
transaction. Pursuant to the Merger Agreement, we will issue up to 4,050,000
shares of common stock to the selling stockholders who are former Proficient
shareholders. The exact number of shares will be determined according to, among
other things, an earn-out formula contained in the Merger Agreement. The shares
are expected to be issued at various times both before and after the effective
date of the registration statement of which this prospectus forms a part. Any
shares registered for resale on such registration statement, but not actually
issued to these selling stockholders pursuant to the earn-out formula, will
be
deregistered under the Securities Act of 1933, as amended (the “Securities
Act”). The obligation to issue the shares of common stock to the selling
stockholders who are former Proficient shareholders was made pursuant to an
exemption from the registration requirements of the Securities Act, as provided
by Section 4(2) thereunder.
Other
than the right to receive shares pursuant to the Merger Agreement, the selling
stockholders who are former Proficient shareholders did not beneficially own
any
shares of common stock, including shares subject to options or similar rights,
as of July 18, 2006. The selling stockholders who are former Proficient
shareholders may offer and sell up to 4,050,000 shares of common stock pursuant
to this prospectus (except that, as discussed above, any shares registered
for
resale on the registration statement but not actually issued to the selling
stockholders who are former Proficient shareholders pursuant to the earn-out
formula in the Merger Agreement will be deregistered).
In
addition, 188,250 shares covered by this prospectus are issuable upon the
exercise of outstanding warrants held by Genesis Select Corp. and/or one or
more
of its transferees. This prospectus also relates to the resale of shares that
may be issued pursuant to the terms of the warrants to prevent dilution
resulting from stock splits, stock dividends and similar
transactions.
The
following table sets forth the name of each selling stockholder, the number
of
shares of common stock beneficially owned by each selling stockholder as of
July
18, 2006, and the number of shares of common stock that each selling stockholder
may offer and sell pursuant to this prospectus. Because each selling stockholder
may offer all or a portion of the shares of common stock offered by this
prospectus from time to time after the date hereof, no estimate can be made
of
the number of shares that each selling stockholder may retain upon completion
of
this offering. However,
assuming all of the shares offered by this prospectus are sold by the selling
stockholders, after completion of this offering, none of the selling
stockholders will own more than one percent of the shares of common stock
outstanding.
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes voting and investment power with respect to
shares. Unless otherwise indicated, the persons named in the table directly
own
the shares and have sole voting and sole investment control with respect to
all
shares beneficially owned. The information with respect to beneficial ownership
of common stock held by each selling stockholder is based upon record ownership
data provided by our transfer agent, information as supplied or confirmed by
the
selling stockholders, statements filed with the Securities and Exchange
Commission or our actual knowledge.
Within
the past three years, none of the selling stockholders have held any position
or
office with us or any of our affiliates or had a material relationship with
us
or any of our affiliates.
15
|
Name
|
Number
of Shares Beneficially Owned Prior to the
Offering
|
Number
of Shares Offered Hereby
|
|||||
|
|
|
||||||
|
Gregg
Freishtat
|
849,589
|
849,589
|
|||||
|
J.
Stephen Hufford
|
11,076
|
11,076
|
|||||
|
Jenny
T. Hufford
|
185
|
185
|
|||||
|
David
Kassens
|
2,499
|
2,499
|
|||||
|
Neal
McEwen
|
7,602
|
7,602
|
|||||
|
Dodge
McFall
|
3,846
|
3,846
|
|||||
|
Jackson
Wilson
|
26,852
|
26,852
|
|||||
|
Abe
Smith
|
196,185
|
196,185
|
|||||
|
Jack
Blockley
|
196,185
|
196,185
|
|||||
|
Javad
Ra'ed
|
12,323
|
12,323
|
|||||
|
Vikas
Rijsinghani
|
14,279
|
14,279
|
|||||
|
Carrie
Catlin
|
4,283
|
4,283
|
|||||
|
John
Casson
|
3,568
|
3,568
|
|||||
|
Paul
Kaib
|
2,284
|
2,284
|
|||||
|
Yaron
Yaniv
|
2,420
|
2,420
|
|||||
|
Fulmead
Ventures Limited
|
255,181
|
255,181
|
|||||
|
Wagner,
Harvey
|
4,856
|
4,856
|
|||||
|
Adviesbeheer
GIMV
|
143,995
|
143,995
|
|||||
|
Fuqua
Venture Partners I, LLC
|
316,229
|
316,229
|
|||||
|
GIMV
N.V.
|
815,980
|
815,980
|
|||||
|
Kinetic
Ventures II, L.L.C.
|
496,087
|
496,087
|
|||||
|
Labrador
Ventures IV, L.P.
|
260,172
|
260,172
|
|||||
|
MIMES,
LLC
|
102,071
|
102,071
|
|||||
|
PAMICA
N.V.
|
172,262
|
172,262
|
|||||
|
TW
Investment Holdings LLC
|
69,637
|
69,637
|
|||||
|
Adrian
M. Grant
|
93
|
93
|
|||||
|
Chris
W. Simpson
|
728
|
728
|
|||||
|
Christopher
W. Klaus
|
929
|
929
|
|||||
|
Craig
C. Sellars
|
129
|
129
|
|||||
|
Craig
H. Kessler and Jodi R. Kessler
|
231
|
231
|
|||||
|
Dubnow
Family Ventures, LLC
|
929
|
929
|
|||||
|
Elizabeth
W. Abernathy
|
185
|
185
|
|||||
|
Eric
W. Hartz and Jennifer L. Hartz
|
185
|
185
|
|||||
|
Eurek
Partners, LLC
|
929
|
929
|
|||||
|
Franklin
Street Investments, LLC
|
556
|
556
|
|||||
|
Greg
Malever
|
185
|
185
|
|||||
|
Jack
Shakarshy
|
11,560
|
11,560
|
|||||
|
Jack
Simpson Sr. Revocable Trust
|
3,641
|
3,641
|
|||||
|
James
N. Hufford Trust
|
464
|
464
|
|||||
|
John
A. Richards
|
8,164
|
8,164
|
|||||
|
Leonard
J. Grossman
|
651
|
651
|
|||||
|
Marc
J. Gorlin Revocable Trust Dated 10/23/98, Marc J. Gorlin,
Trustee
|
278
|
278
|
|||||
|
Matthew
H. Neuberger and Susan L. Neuberger
|
260
|
260
|
|||||
|
Michael
S. Karlin
|
929
|
929
|
|||||
|
NSA
Investment Partnership
|
1,117
|
1,117
|
|||||
|
Randolph
W. Salisbury and Julie D. Salisbury
|
464
|
464
|
|||||
|
Raymond
Gentry
|
1,456
|
1,456
|
|||||
|
RBC
Dain Rauscher as Custodian
|
8,719
|
8,719
|
|||||
|
Richard
S. Ressler
|
28,360
|
28,360
|
|||||
|
Robinson-Humphrey
Netlanta Fund I, L.P.
|
1,395
|
1,395
|
|||||
|
Roy
F. Cammarano
|
464
|
464
|
|||||
|
Sandoval,
LLC
|
3,602
|
3,602
|
|||||
|
Seraphim
Partners, LLC
|
1,860
|
1,860
|
|||||
|
Terry
L. Moore, IV
|
1,706
|
1,706
|
|||||
|
Tod
Trousdell
|
185
|
185
|
|||||
|
Genesis
Select Corp.
|
188,250
|
188,250
|
|||||
|
Total
|
4,238,250
|
4,238,250
|
|||||
16
PLAN
OF DISTRIBUTION
We
are
registering the shares of common stock offered for sale by this prospectus
on
behalf of the selling stockholders. As used in this section, “selling
stockholders” includes donees, pledgees, distributees, transferees, or other
successors-in-interest. The selling stockholders will act independently of
us in
making decisions with respect to the timing, manner and size of each sale.
We
will pay all costs, expenses and fees in connection with the registration of
the
shares. The selling stockholders will pay all brokerage commissions,
underwriting discounts, commissions, transfer taxes and other similar selling
expenses, if any, associated with the sale of the shares of common stock by
them.
The
selling stockholders may, from time to time, sell any or all of their shares
of
common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| · |
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
settlement
of short sales entered into after the date of this
prospectus;
|
| · |
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
| · |
a
combination of any such methods of sale;
|
| · |
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
or
|
| · |
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.
The
selling stockholders may also engage in short sales against the box, puts and
calls and other transactions in our shares of common stock and may sell or
deliver shares in connection with these trades.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this prospectus, in the case of an agency
transaction, not in excess of a customary brokerage commission in compliance
with NASD Rule 2440, and in the case of a principal transaction, a markup or
markdown in compliance with NASD IM-2440. Any profits on the resale of shares
of
common stock by a broker-dealer acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act. Discounts,
concessions, commissions and similar selling expenses, if any, attributable
to
the sale of shares will be borne by a selling stockholder. The selling
stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares if liabilities are
imposed on that person under the Securities Act.
17
The
selling stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the
description of selling stockholders to include the pledgee, transferee or other
successors-in-interest as selling stockholders under this
prospectus.
The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other
successors-in-interest will be the selling beneficial owners for purposes of
this prospectus and may sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the
description of selling stockholders to include the pledgee, transferee or other
successors-in-interest as selling stockholders under this prospectus.
In
connection with the sale of the common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities that require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, 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 stockholders and any broker-dealers or agents that are involved in
selling the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event,
any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
We
are
required to pay all fees and expenses incident to the registration of the shares
of common stock. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under
the
Securities Act.
The
selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed
sale
of shares of common stock by any selling stockholder. If we are notified by
any
selling stockholder that any material arrangement has been entered into with
a
broker-dealer for the sale of shares of common stock, if required, we will
file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The
anti-manipulation rules of Regulation M under the Securities Exchange Act of
1934, as amended, may apply to sales of our common stock and activities of
the
selling stockholders.
Under
a
trading restriction agreement among LivePerson, certain selling stockholders
who
are former Proficient shareholders (the “Significant Shareholders”) and Morgan
Stanley, each Significant Shareholder agreed that the Significant
Shareholders may not, as a group, directly or indirectly, sell, offer to sell,
grant any option for the sale of, assign, transfer, pledge, hypothecate, or
otherwise encumber or dispose of (“Transfer”) to any third party any legal or
beneficial interest in shares of our common stock (whether pursuant to the
registration statement of which this prospectus forms a part, or
otherwise), on any given day, constituting more than 10% of the average daily
trading volume of our common stock over the 60 days before such day, nor can
the
Significant Shareholders, as a group, Transfer, in any given week, more than
30%
of the average daily trading volume of our common over the 60 days before such
week, in each case without the prior written consent of LivePerson, which may
be
given or withheld in its sole discretion. Notwithstanding the preceding
sentence, any Significant Shareholder may Transfer any or all of its shares
of
our common stock to any third party if (i) such Transfer is executed as a
private block sale not executed upon any exchange or through any public
securities market and (ii) such third party agrees to be bound by the trading
restriction agreement. The
foregoing provisions will be in effect until July 18, 2009. Any Transfer
permitted to be made pursuant to the trading restriction agreement shall be
brokered by Morgan Stanley or any of its affiliates. Each Significant
Shareholder has agreed to pay all commissions of Morgan Stanley or any of its
affiliates related to any Transfer by such Significant Shareholder. LivePerson
has agreed to pay Morgan Stanley’s other reasonable fees and expenses, including
attorneys fees, travel expenses, postal and delivery charges, and all other
out-of-pocket expenses incurred, in accepting and performing its duties as
administrator under the trading restriction agreement.
18
LEGAL
MATTERS
The
validity of the shares of common stock offered by this prospectus will be passed
upon for us by Proskauer Rose LLP, New York, New York.
EXPERTS
The
consolidated financial statements for LivePerson, Inc. and subsidiaries as
of
December 31, 2005 and for the year then ended and management’s assessment of the
effectiveness of internal control over financial reporting as of December 31,
2005 (which is included in Management’s Annual Report on Internal Control over
Financial Reporting) have been incorporated by reference herein and in the
registration statement of which this prospectus forms a part in reliance upon
the reports of BDO Seidman, LLP, independent registered public accounting firm,
incorporated by reference herein and upon the authority of said firm as experts
in auditing and accounting.
The
consolidated financial statements for LivePerson, Inc. and subsidiaries as
of
December 31, 2004, and for each of the years in the two-year period ended
December 31, 2004, have been incorporated by reference herein and in the
registration statement of which this prospectus forms a part in reliance upon
the report of KPMG LLP, independent registered public accounting firm,
incorporated by reference herein and upon the authority of said firm as experts
in auditing and accounting.
19
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission (SEC). You may read and copy these
reports, proxy statements and other information at the SEC’s Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC, located at http://www.sec.gov.
The
SEC
allows us to “incorporate by reference” the information we file with it, which
means that we can disclose important information to you by referring to those
documents. The information incorporated by reference is an important part
of this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the following documents we filed with, or furnished to, the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Exchange Act”):
| · |
our
Annual Report on Form 10-K for the fiscal year ended December 31,
2005;
|
| · |
our
Quarterly Reports on Form 10-Q for the three-month periods ended
March 31,
2006 and June 30, 2006;
|
| · |
our
Current Reports on Form 8-K or 8-K/A filed on May 16, 2006, June
22, 2006,
July 24, 2006 and September 20, 2006;
and
|
| · |
the
description of our Common Stock in our Registration Statement on
Form 8-A
(File No. 000-30141) under Section 12(g) of the Exchange
Act.
|
In
addition, all documents subsequently filed by us with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the offering
of
the common stock offered hereby is completed shall be deemed to be incorporated
by reference into this prospectus. We are not, however, incorporating by
reference any documents or portions thereof, whether specifically listed above
or filed in the future, that are not deemed “filed’’ with the SEC, including our
compensation committee report and performance graph (included in our Definitive
Proxy Statement), or any information furnished pursuant to Items 2.02 or 7.01
of
Form 8-K, or certain exhibits furnished pursuant to Item 9.01 of Form
8-K.
Any
statement contained herein or in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or replaces such statement. Any such
statement so modified or superseded shall not be deemed to constitute a part
of
this prospectus, except as so modified or superseded.
We
will
provide to you at no cost a copy of any or all of the information incorporated
by reference into this prospectus. You may make a request for a copy of this
information in writing or by telephone. Requests should be directed
to:
LivePerson,
Inc.
Attention:
Investor Relations
462
Seventh Avenue
New
York,
NY 10018
(212)
609-4200
20
4,238,250
Shares
Common
Stock
PROSPECTUS
September
25, 2006