Summary
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all the information you should consider before buying shares in the offering. You should read the entire prospectus carefully.
Chordiant Software, Inc.
Chordiant provides e-business infrastructure software that enables companies to offer their customers highly personalized marketing, sales programs, e-business services and customer support across multiple communication channels. These channels include the Internet, e-mail systems, automated telephony self-service systems, and customer service representatives in call centers, and retail outlets. We believe that companies that use organization-wide customer information to provide consistent customer support through interactions across multiple channels will be able to compete more successfully in the rapidly changing Internet economy.
Today, customers are placing increasing value on convenient access to products, information and services. To be successful in the next generation of online commerce, commonly referred to as e-business, companies have begun taking a customer-centric approach. To attract and retain customers, we believe that companies must develop and execute a new set of online strategies that provide users with relevant and targeted experiences each time interactions take place.
Our product provides a customer-centric e-business solution designed to improve the ability to attract, engage and retain customers on a personalized basis, understand their needs and preferences and provide consistent interactions with customers through any communication channel. We believe that companies that use our product can increase the lifetime value of their customers through improved retention rates and linked selling opportunities. Our software is designed to enable companies to:
. develop a comprehensive single view of the customer;
. use automated, sophisticated decision making processes;
. offer their customers consistent experiences across multiple communications channels; and . utilize standard and customizable business services.
Our Customer Communications Solution, or CCS, software product, is comprised of a suite of applications, and includes standard business services, a workflow engine and enterprise integration services supporting network, telephony, legacy and data management interfaces. The product is licensed to our customers as a complete e-business infrastructure system. CCS includes a customer service representative application, a Web communications application and an e-mail communications interface application.
We license our product and provide related services primarily through our direct sales organization, complemented by the selling and support efforts of systems integrators. We target our product towards multinational market leaders in business-to-consumer industries, particularly companies in the financial services, telecommunications, retail, direct merchandise, travel and leisure and automotive industries. Our customers as of November 30, 1999, include Bank One International, Cable & Wireless Communications, Canadian Tire Acceptance Limited, Chase Manhattan Mortgage Corporation, First USA Bank, General Motors' OnStar division, KLM Royal Dutch Airlines, NedCorp Bank RSA, Thomas Cook Global Services, Total System Services, Inc. and Ventura.
Our objective is to continue to provide leading-edge e-business infrastructure software that enables companies to offer their customers personalized interactions across multiple communications channels to increase the lifetime value of their customers.
To achieve this goal we intend to:
. continue to devote substantial resources to the development of new and innovative products;
. maintain and seek strategic alliances to assist in developing, marketing, and selling our product;
. continue to target global leaders in our primary business-to-consumer markets by providing solutions to the financial services, telecommunications, travel and leisure, and retail industries, including many Internet-only businesses that compete in these segments;
. aggressively grow our global presence by expanding our worldwide field sales, marketing and services organizations; and . continue to grow through building our referenceable customer base.
Our principal executive offices are located at 20400 Stevens Creek Blvd., Suite 400, Cupertino, CA 95014, and our telephone number is (408) 517-6100. Our Internet address is www.chordiant.com. The information on our Web site is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.
The Offering
Common stock offered................................ 4,500,000 shares Common stock to be outstanding after this offering.. 34,594,801 shares Use of proceeds..................................... General corporate purposes, including working capital and capital expenditures. See "Use of Proceeds."
Proposed Nasdaq National Market symbol.............. CHOR The number of shares of common stock to be outstanding after this offering assumes no exercise of the underwriters' over-allotment options. The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding as of November 18, 1999, and excludes:
. 7,824,162 shares subject to options outstanding as of November 18, 1999, at a weighted average exercise price of $1.75 per share . 1,071,509 additional shares that we could issue under our equity incentive stock option plan;
. 700,000 shares that we could issue under our non-employee directors' stock option plan; and . 2,000,000 shares that we could issue under our employee stock purchase plan.
Summary Consolidated Financial Data (in thousands, except per share data)
Nine Months Ended
Year Ended December 31, September 30,
1996 1997 1998 1998 1999
(in thousands, except per share data)
(unaudited)
Consolidated Statement of
Operations Data:
Net revenues:
License..................... $ -- $ 1,142 $ 4,360 $ 2,634 $ 5,325
Service..................... 2,312 1,766 8,105 3,345 6,922
Total net revenues...... 2,312 2,908 12,465 5,979 12,247
Cost of net revenues......... 2,353 1,535 9,372 4,392 9,983
Gross profit (loss).......... (41) 1,373 3,093 1,587 2,264
Loss from operations......... (7,642) (11,923) (17,880) (12,699) (14,759)
Net loss..................... (7,562) (11,593) (17,440) (12,288) (15,436)
Net loss per share: Basic and diluted........... $ (1.51) $ (2.31) $ (3.44) $ (2.44) $ (2.93) Weighted average shares..... 5,002 5,009 5,075 5,034 5,264 Pro forma net loss per share (unaudited): Basic and diluted........... $ (0.81) $ (0.67) Weighted average shares..... 21,524 23,086
September 30, 1999 Actual Pro Forma As Adjusted (unaudited)
Consolidated Balance Sheet Data: Cash and cash equivalents..................... $ 21,077 $21,077 $57,642 Working capital............................... 7,368 7,368 43,933 Total assets.................................. 27,276 27,276 63,841 Borrowings.................................... 15,141 5,141 5,141 Deferred revenues............................. 7,763 7,763 7,763 Mandatorily redeemable convertible preferred Stock....................................... 51,109 -- -- Stockholders' equity (deficit)................ (52,207) 8,902 45,467
See Note 2 of Notes to Consolidated Financial Statements for an explanation of the determination of the number of shares used in computing per share data.
The pro forma consolidated balance sheet data reflects the conversion of outstanding shares of Mandatorily Redeemable Convertible Preferred Stock and convertible debt that will be effective upon the closing of this offering. The as adjusted balance sheet data reflects the net proceeds from the sale by us of shares of common stock in this offering at an assumed initial public offering price of $9.00 per share, after deducting underwriting discounts and commissions and offering expenses, and our estimated offering expenses. See "Use of Proceeds" and "Capitalization."