<PAGE>
As filed with the Securities and Exchange Commission on May 10, 2000
Registration No. 333-
============================
U.S. SECURITIES AND EXCHANGE COMMISSION
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRSTQUOTE INC.
(Name of small business issuer in its charter)
Delaware 7373 98-0162893
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
12 Avenue des Morgines
1213 Petit Lancy 1
Geneva, Switzerland
4122-879-0879
(Address and telephone number of principal executive offices
and principal place of business)
---------------------------------------
Neil G. Gibbons
12 Avenue des Morgines
1213 Petit Lancy 1
Geneva, Switzerland
4122-879-0879
(Name, address and telephone number of agent for service)
---------------
Copies to:
Daniel K. Donahue, Esq.
Oppenheimer Wolff & Donnelly LLP
500 Newport Center Drive, Suite 700
Newport Beach, CA 92660
(949) 823-6000
---------------
Approximate date of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
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If the only securities being registered on this Form are to be 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, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities Amount to be Offering Price per Aggregate Offering Amount of
to be Registered Registered Share (1) Price Registration Fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value........ 197,815 $11.00 $2,175,965 $574.45
- -----------------------------------------------------------------------------------------------------------------------------
Total................................ 197,815 $11.00 $2,175,965 $574.45
=============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of 1933,
based upon the last sale of the Registrant's common stock on May 8, 2000,
as reported in the over-the-counter market.
-----------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
197,815 Shares
FIRSTQUOTE INC.
Common Stock
This prospectus relates to the offer and sale of our common stock by the
selling shareholders identified in this prospectus. The selling shareholders
will determine when they will sell their shares, and in all cases, will sell
their shares at the current market price or at negotiated prices at the time of
the sale. Although we have agreed to pay the expenses related to the
registration of the shares being offered, we will not receive any proceeds from
the sale of the shares by the selling shareholders.
Our common stock is traded on the OTC Bulletin Board under the symbol
"FSQT."
Please see "Risk Factors" beginning on page 2 to read about certain factors you
should consider before buying shares of common stock.
Neither the Securities and Exchange Commission nor any other regulatory body has
approved or disapproved these securities or passed upon the accuracy or adequacy
of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is_________________, 2000
<PAGE>
PROSPECTUS SUMMARY
You should read this summary in conjunction with the more detailed
information and financial statements appearing elsewhere in this prospectus.
This prospectus contains forms of forward-looking statements. When used in this
prospectus, the words "believe," "expect," "anticipate," "estimate" and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions, which are
identified and described in the "Risk Factors" section, below. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary from those anticipated,
estimated, or projected and the variations may be material. We caution you not
to place undue reliance on any such forward-looking statements, all of which
speak only as of the date made.
Our Company
We are engaged in the business of developing and marketing a range of
Internet-based financial information and transactional services to the European
investment community. We provide real-time and delayed market data, news and
other financial information. We also provide electronic brokerage capabilities
over the Internet to a range of customized interfaces, including desktop client-
server applications, web-browser based interfaces, as well as via wireless
services such as the short messaging service and the wireless application
protocol. Our services are provided to our corporate clients for internal use as
well as for redistribution to their customer bases. The Company provides
Our financial information services are offered on a direct subscription
basis or as a co-branded business-to-business service to financial institutions,
such as banks and brokerage firms, financial media and publishing organizations
and Internet service providers who desire to offer financial content and related
services directly to their own customers. We also offer to institutional clients
turnkey solutions for Internet-based electronic brokerage capabilities. We also
derive revenue from the provision of underlying Internet access and network
connectivity services to our corporate and institutional clients.
Our services are available via our own wide-area Internet network backbone
by dial-up or dedicated access, as well as from any other Internet point of
access world-wide.
Our executive offices are located at 12, Av. des Morgines, 1213 Petit-
Lancy 1, Geneva, Switzerland. Our telephone number is +4122-879-0879.
The Offering
This offering relates to the offer and sale of our common stock by the
selling shareholders identified in this prospectus. The selling shareholders
will determine when they will sell their shares, and in all cases, will sell
their shares at the current market price or at negotiated prices at the time of
the sale. Although we have agreed to pay the expenses related to the
registration of the shares being offered, we will not receive any proceeds from
the sale of the shares by the selling shareholders.
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<PAGE>
RISK FACTORS
This offering and an investment in our common stock involve a high degree
of risk. You should carefully consider the following risk factors and the other
information in this prospectus before investing in our common stock. Our
business and results of operations could be seriously harmed by any of the
following risks. The trading price of our common stock could decline due to any
of these risks, and you may lose part or all of your investment.
We Have A History Of Losses And Will Experience Future Losses
We have incurred net losses of approximately $6.8 million for fiscal year 1999
and approximately $3.4 million for fiscal year 1998. As of December 31, 1999,
we had an accumulated deficit of approximately $13.7 million. We have not
achieved profitability and may incur net losses in the future. We anticipate
continuing to incur significant sales and marketing, product development and
general and administrative expenses and, as a result, we will need to generate
significantly higher revenues to achieve and sustain profitability on an annual
basis. Although our revenues have grown in recent quarters, we cannot be certain
that we will continue to achieve revenue growth or realize sufficient revenues
to achieve profitability.
Failure To Meet Future Capital Needs May Adversely Affect Our Business
We require substantial working capital to fund our business. We have had
significant net losses and negative cash flow from operations since inception
and expect to continue to experience net losses and negative cash flow in, at
least, the near future. As of December 31, 1999, we had approximately $1.1
million in cash and short term investments. However, in March 2000, we obtained
additional capital through our private placement sale of 1,061,057 common shares
for the net proceeds of $7.2 million. We believe that the net proceeds from the
March 2000 private placement, together with our existing capital resources, will
be sufficient to meet our capital requirements for through the end of the
current fiscal year ending December 31, 2000. However, if our capital
requirements vary materially from those currently planned, we may require
additional financing sooner than anticipated. Additional financing may not be
available when needed on terms favorable to us or at all. If adequate funds are
not available or are not available on acceptable terms, we may be unable to
develop or enhance our services, take advantage of future opportunities or
respond to competitive pressures, which could materially adversely affect our
business, financial condition or results of operations.
Our Markets Are Highly Competitive
The market for electronic brokerage services, particularly over the internet, is
new, rapidly evolving and intensely competitive. We expect competition to
continue and intensify in the future. We encounter direct competition from
discount brokerage firms providing either touch-tone telephone or online
brokerage services, or both. These competitors include such discount brokerage
firms as E*Trade, Charles Schwab & Co., Inc., and DLJ Direct (a division of
Donaldson, Lufkin & Jenrette Securities Corporation), among others. We also
encounter competition from established full-service brokerage firms such as
PaineWebber Incorporated, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, among others. In addition, we compete with financial
institutions, mutual fund sponsors and other organizations, some of which
provide electronic brokerage services. Most of our competitors have longer
operating histories and significantly greater financial, technical, marketing
and other resources. Many current and potential competitors also have greater
name recognition and more extensive customer bases that could be leveraged,
thereby gaining market share to our detriment. We may not be able to compete
effectively with current or future competitors. In addition, the competitive
pressures we face may have a material adverse effect on our business, financial
condition and operating results.
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<PAGE>
We Are Subject To Risks Associated With The Securities Business
Substantially all of our revenues to date have been from subscriptions to our
financial information and electronic brokerage services. We expect these
services to continue to account for substantially all of our revenues for the
foreseeable future. As a result, we are directly affected by U.S., European and
international economic and political conditions, broad trends in business and
finance and substantial fluctuations in volume and price levels of securities
and futures transactions. In recent months, the U.S. securities markets have
established record levels of trading. However, a downturn in these markets
could adversely affect our operating results and future plan of operations.
Certain of our competitors with more diverse product and service offerings may
be better positioned to withstand such a downturn in the securities industry.
We Must Keep Pace With The Rapidly Changing Product Requirements Of Our
Customers
The information and financial services industries are characterized by rapid
technological change, changes in customer requirements, frequent new service and
product introductions and enhancements, and emerging industry standards. We
believe our future success will depend, in part, on our ability to anticipate
and adapt to such changes and to offer, on a timely basis, services that meet
customer demands. Our inability to develop on a timely basis new products or
enhancements to existing products, or the failure of such products or
enhancements to achieve market acceptance, could materially adversely affect our
business, financial condition and results of operations.
We Are Substantially Dependent On The Development Of The Internet And Online
Commerce
The market for electronic brokerage services, particularly over the Internet, is
at an early stage of development and is rapidly evolving. As is typical for new
and rapidly evolving industries, demand and market acceptance for recently
introduced services and products are subject to a high level of uncertainty.
Although the past two years has shown a rapid increase in the volume of
commercial transactions over the Internet, these can be no assurance that the
Internet will continue to be accepted by consumers as a widely used medium for
commerce and communication. In addition, European companies and consumers may
not adopt the Internet with the same enthusiasm as in the United States.
Accordingly, because global commerce and online exchange of information on the
Internet and other similar open wide area networks are new and evolving, there
can be no assurance that the Internet will prove to be a viable commercial
marketplace. If critical issues concerning the commercial use of the Internet
are not favorably resolved, if the necessary infrastructure is not developed, or
if the Internet does not become a viable commercial marketplace, our business,
financial condition and operating results will be materially adversely affected.
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<PAGE>
We Are Subject To The Risks Associated With Encryption Technology
A significant barrier to online commerce and communication is the secure
transmission of confidential information over public networks. We rely on
encryption and authentication technology to provide the security and
authentication necessary to effect secure transmission of confidential
information. Advances in computer capabilities, new discoveries in the field of
cryptography or other events or developments may result in a compromise or
breach of the encryption or other algorithms we use to protect customer
transaction data. If any such compromise of our security were to occur, it could
have a material adverse effect on our business, financial condition and
operating results.
Our Business Will Be Substantially Dependent On Certain Strategic Relationships
We use suppliers of information, software and services in virtually every phase
of its operations. Our financial data service is offered pursuant to separate
non-exclusive licenses from the following two companies:
Standard & Poor's ComStock, which supplies us with a raw feed of market
data from securities and commodities exchanges world-wide; and
Townsend Analytics, Ltd., which supplies us with its proprietary software
program which organizes the raw data feed from S&P ComStock for
presentation in tabular and chart formats.
Although we believe that we have no long term dependence on any one supplier,
there is always a certain amount of time required to develop internally or
locate and engage externally a replacement and integrate that replacement into
our operations. In the event a key supplier terminates its relationship with us
without notice, or should we be compelled to do the same, our operations may be
adversely affected.
We Are Subject To Risks Associated With International Operations
A component of our long-term strategy is to expand into a number of European
markets. As a result, we are subject to certain risks inherent in conducting
business internationally, including:
unexpected changes in regulatory requirements;
export restrictions, tariffs and other trade barriers;
problems in collecting accounts receivable;
political instability;
currency fluctuations;
seasonal reductions in business activity; and
potentially adverse tax consequences.
Any of these factors could adversely affect our international operations and
could have a material adverse effect on our current or future business, results
of operations and financial condition.
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<PAGE>
Our Failure To Adequately Protect Our Proprietary Rights May Adversely Affect
Our Business
Our success and ability to compete are dependent to a significant degree on our
proprietary technology. We rely on a combination of copyright, trade secret and
trademark laws, as well as confidentiality agreements and licensing agreements
to protect our proprietary rights. Notwithstanding the precautions we have
taken it may be possible for a third party to copy or otherwise obtain and use
our software or other proprietary information without authorization or to
develop similar software independently. In addition, litigation may be
necessary in the future to enforce our intellectual property rights, to protect
our trade secrets, to determine the validity and scope of the proprietary rights
of others, or to defend against claims of infringement or invalidity. Such
litigation, whether successful or unsuccessful, could result in substantial
costs and diversions of resources, either of which could have a material adverse
effect on our business, financial condition and operating results.
We May Engage In Future Acquisitions That Dilute Our Stockholders, Cause Us To
Incur Debt And Assume Contingent Liabilities
As part of our business strategy, we expect to review acquisition prospects that
would complement our current product offerings, augment our market coverage or
enhance our technical capabilities, or that may otherwise offer growth
opportunities. While we have no current agreements or negotiations underway with
respect to any such acquisitions, we may acquire businesses, products or
technologies in the future. Such actions by us could materially adversely
affect our results of operations and/or the price of our common stock.
Acquisitions also entail numerous risks, including:
difficulties in assimilating acquired operations, technologies or products;
unanticipated costs associated with the acquisition could materially
adversely affect our results of operations;
diversion of management's attention from other business concerns;
adverse effects on existing business relationships with suppliers and
customers;
risks of entering markets in which we have no or limited prior experience;
and
potential loss of key employees of acquired organizations.
We have limited experience in assimilating acquired organizations into our
operations and we may not be able to successfully integrate any businesses,
products, technologies or personnel that we might acquire in the future. Our
failure to do so could have a material adverse effect on our business, financial
condition and results of operations.
We Have No Immediate Plans To Pay Cash Dividends
We have never declared or paid cash dividends on its capital stock and we do not
expect to declare or pay any cash dividends for the foreseeable future.
Earnings, if any, will be retained to fund development and expansion. Any
future determination to pay cash dividends will be at the discretion of the
Board of Directors and will be dependent upon our financial condition, results
of operations, capital requirements, general business condition and such other
factors as the Board of Directors may deem relevant.
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<PAGE>
Control By Existing Stockholders May Limit Your Ability To Influence The Outcome
Of Director Elections And Certain Transactions
Our present directors and executive officers and their respective affiliates
beneficially own approximately 53% of the outstanding common stock. As a
result, these stockholders, if they act together, will be able to exercise
significant influence over all matters requiring stockholder approval, including
the election of directors and approval of significant corporate transactions,
and will have veto power with respect to any stockholder action or approval
requiring a majority vote.
Certain Provisions In Our Corporate Charter And Bylaws, As Well As Applicable
Regulations, May Discourage Take-Over Attempts And Thus Depress The Market Price
Of Our Stock
Certain provisions of the our Certificate of Incorporation, Bylaws, and Delaware
law may be deemed to have an anti-takeover effect. Such provisions may delay,
deter or prevent a tender offer or takeover attempt that a stockholder might
consider to be in that stockholder's best interests. For example, our
Certificate of Incorporation allows our Board of Directors to issue additional
shares of common stock or establish one or more classes or series of preferred
stock, having rights, preferences and limitations as determined by the Board of
Directors without stockholder approval.
In addition, we are subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law which prohibits a publicly-held Delaware
corporation from engaging in certain business combination with interested
stockholders for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. Compliance with both the
Delaware Code could have the effect of delaying, deterring or preventing a
tender offer or takeover attempt that a stockholder might consider to be in that
stockholder's best interests, including attempts that might result in a premium
over the market price for the shares held by stockholders.
Certain Provisions In Our Corporate Charter And Bylaws May Effect The Rights Of
Common Stock Holders
Our Board of Directors has the authority to issue up to an additional 10,000,000
shares of Preferred Stock and to determine the price, rights, preferences and
privileges of those shares without any further vote or action by our
stockholders. To date, we have 200,815 shares of preferred stock outstanding in
two different series. Any additional preferred stock issued by our board of
directors may contain rights and preferences adverse to the voting power and
other rights of the holders of common stock.
We Do Not Have An Active Market For Our Common Stock
Our common stock is traded on the NASDAQ OTC Bulletin Board under the symbol
"FSQT." On May 8, 2000, the last reported sale price of the common stock on the
OTC Bulletin Board was $11.00 per share. However, we consider our common stock
to be "thinly traded" and any last reported sale prices may not be a true
market-based valuation of the common stock. There can be no assurance that an
active market for our common stock will develop. In addition, the stock market
in general, and internet and technology companies in particular, have
experienced extreme price and volume fluctuations that have often been unrelated
or disproportionate to the operating performance of such companies.
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<PAGE>
Special Note Regarding Forward-Looking Statements
This prospectus contains forward-looking statements. These statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "except," "plan," "anticipate," "believe," "estimate," "predict,"
"potential" or "continue," the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. In evaluating these statements, you should specifically
consider various factors, including the risks outlined under "Risks Factors."
These factors may cause our actual results to differ materially from any
forward-looking statement. 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. Moreover, neither we
nor any other person assumes responsibility for the accuracy and completeness of
the forward-looking statements. We are under no duty to update any of the
forward-looking statements after the date of this prospectus to conform such
statements to actual results or to changes in our expectations.
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<PAGE>
SELLING STOCKHOLDERS
This prospectus relates to the offer and sale of our common stock by the
selling shareholders identified below. The selling shareholders are the former
stockholders of Stockdata Amsterdam B.V., a limited liability company organized
under the laws of The Netherlands which was acquired by us in December 1999. The
acquisition was conducted pursuant to a Securities Purchase Agreement dated
December 24, 1999 between us and the stockholders of Stockdata. Pursuant to the
agreement, the Stockdata stockholders transferred to us all of the outstanding
capital shares of Stockdata in consideration of our payment of up to
US$3,750,000, payable as follows: US$245,031 in cash; US$1,059,239 in the
assignment of Stockdata receivables; and our issuance of 197,815 shares of
Series D preferred stock and 147,730 shares of common stock, all such shares
being valued at approximately US$6.50 per share. An additional 30,000 common
shares are issuable by us to the sellers' subject to their satisfaction of
certain post-closing conditions. Pursuant to the Stockdata Securities Purchase
Agreement, we agreed to register for resale the common shares issuable upon
conversion of the Series D preferred stock issued to the Stockdata shareholders.
The selling shareholders will determine when they will sell their shares,
and in all cases, will sell their shares at the current market price or at
negotiated prices at the time of the sale. Although we have agreed to pay the
expenses related to the registration of the shares being offered, we will not
receive any proceeds from the sale of the shares by the selling shareholders.
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of the date of this prospectus by each selling
shareholders:
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares Beneficially
Prior to Offering Owned After Offer(1)
----------------------------------- --------------------
Number of Number of
outstanding Shares
Name shares Percent offered Number Percent
- ---- ----------- ------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
Media Investerings-en 210,484(2) 3.1% 135,574 74,190 1.1%
Managementmaatschappij B.V.
Horizon Investments B.V 98,583(3) 1.5% 45,190 53,393 (4)
CV Stockdata 37,199(5) (4) 17,052 20,147 (4)
</TABLE>
(1) Assumes the sale of all of common shares offered hereby by the selling
shareholder.
(2) Includes 135,5784 common shares issuable upon conversion of the shares
of Series D preferred stock held by the selling shareholder.
(3) Includes 45,190 common shares issuable upon conversion of the shares
of Series D preferred stock held by the selling shareholder.
(4) Less than one percent.
(5) Includes 17,052 common shares issuable upon conversion of the shares
of Series D preferred stock held by the selling shareholder.
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<PAGE>
MATERIAL CHANGES
Since December 31, 1999, the following events have taken place which have
not been reported on by us in a Quarterly Report on Form 10-QSB or a Current
Report on Form 8-K:
In March 2000, we sold 1,061,057 shares of our common shares to a number of
existing and additional venture capital and private investors for a total
consideration of $7,155,184.
In April 2000, Mr. William Cordeiro resigned from our Board of Directors.
INCORPORATION BY REFERENCE
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
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 documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) the Securities Exchange Act of 1934:
1. Our Annual Report on Form 10-KSB for the fiscal year ended December 31,
1999;
2. Our Current Report on Form 8-K dated December 21, 1999 filed with the
SEC on January 12, 2000;
3. Our Current Report on Form 8-K/A dated December 21, 1999 filed with the
SEC on March 14, 2000; and
4. The description of our common stock which is contained in our
registration statement on Form 10-SB filed with the SEC on April 7, 1997.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address: Mark Benn, Chief Financial Officer, 12
Avenue des Morgines, 1213 Petit Lancy, Geneva, Switzerland; (4122) 879-0879.
LEGAL MATTERS
Certain legal matters with respect to the shares offered hereby will be
passed upon for us by Oppenheimer Wolff & Donnelly LLP, Newport Beach,
California.
EXPERTS
Arthur Andersen LLP, independent auditors, has audited our financial
statements at December 31, 1999 and 1997 and for the years ended December 31,
1999 and 1998, as set forth in their report. We have included our financial
statements in the prospectus and elsewhere in the registration statement in
reliance on Arthur Andersen's report, given on their authority as experts in
accounting and auditing.
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<PAGE>
INDEMNIFICATION OF DIRECTORS
As permitted by Section 145 of the Delaware General Corporation Law, our
Certificate of Incorporation includes a provision that eliminates the personal
liability of our directors for monetary damages for breach or alleged breach of
their fiduciary duty as directors. In addition, as permitted by Section 145 of
the Delaware General Corporation Law, our Bylaws provide that we may, in our
discretion, indemnify our directors, officers, employees and agents and persons
serving in such capacities in other business enterprises (including, for
example, our subsidiaries) at our request, to the fullest extent permitted by
Delaware law; and advance expenses, as incurred, to our directors and officers
in connection with defending a proceeding.
Our policy is to enter into indemnification agreements with each of our
directors and executive officers that provide the maximum indemnity allowed to
directors and officers by Section 145 of the Delaware General Corporation Law
and the Bylaws as well as certain additional procedural protections.
The indemnification provisions in our Bylaws and the indemnification
agreements entered into by us with our directors and executive officers may be
sufficiently broad to permit indemnification of our directors and executive
officers for liabilities arising under the Securities Act. However, we are
aware that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth estimated expenses we expect to incur in
connection with the resale of the shares being registered. All such expenses
are estimated except for the SEC registration fee.
SEC registration fee................................. $ 529.77
Printing expenses.................................... $ 1,500.00
Fees and expenses of counsel for the Company......... $ 5,000.00
Fees and expenses of accountants for Company......... $ 5,000.00
Miscellaneous........................................ $ 1,000.00
*Total.......................................... $13,029.77
Item 15. Indemnification of Directors and Officers.
Delaware Statutes
-----------------
Section 145. Indemnification of Officers, Directors, Employees and Agents;
Insurance.
"(a) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that the person's conduct was unlawful.
(b) A corporation shall power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and
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<PAGE>
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made, with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by former directors and officers or other
employees and agents may be so paid upon such terms and conditions, if any, as
the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of
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<PAGE>
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this section with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees)."
Certificate of Incorporation
- ----------------------------
Article 10 of the Company's Certificate of Incorporation limits the
liability of the Company's directors to the Company and its stockholders.
Article 10 reads as follows:
"A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived any improper personal
benefit."
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Bylaws
------
Bylaws
------
Article VII of the Company's Amended and Restated Bylaws provides for
indemnification of the Company's directors, officers and agents to advance
expenses for defense of litigation and to purchase and maintain insurance on
behalf of any director or officer of the Company against any liability asserted
against or incurred by them in such capacity or arising out of their status as
such, whether or not the Company would have power to indemnify such director or
officer against any liability under the provisions of the Certificate of
Incorporation or Delaware law, and authorize the Board to extend such indemnity
to others as follows:
"Article VII. Indemnification
---------------
7.1 Authorization For Indemnification. The Corporation may indemnify, in
---------------------------------
the manner and to the full extent permitted by law, any person (or the estate,
heirs, executors, or administrators of any person) who was or is a party to, or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation), by reason of the
fact that such person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
7.2 Advance of Expenses. Costs and expenses (including attorneys' fees)
-------------------
incurred by or on behalf of a director or officer in defending or investigating
any action, suit, proceeding or investigation may be paid by the Corporation in
advance of the final disposition of such matter, if such director or officer
shall undertake in writing to repay any such advances in the event that it is
ultimately determined that he is not entitled to indemnification. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board deems appropriate. Notwithstanding the
foregoing, no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board by a majority vote of a quorum of
disinterested directors, or (if such a quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs) by independent legal
counsel in a written opinion, or by the stockholders, that, based upon the facts
known to the Board or counsel at the time such determination is made, (a) the
director, officer, employee or agent acted in bad faith or deliberately breached
his duty to the Corporation or its stockholders, and (b) as a result of such
actions by the director, officer, employee or agent, it is more likely than not
that it will ultimately be determined that such director, officer, employee or
agent is not entitled to indemnification.
7.3 Insurance. The Corporation may purchase and maintain insurance on
---------
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise or as a member of any committee or similar
body against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such,
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<PAGE>
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article or applicable law.
7.4 Non-exclusivity. The right of indemnity and advancement of expenses
---------------
provided herein shall not be deemed exclusive of any other rights to which any
person seeking indemnification or advancement of expenses from the Corporation
may be entitled under any agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office. Any agreement for
indemnification of or advancement of expenses to any director, officer, employee
or other person may provide rights of indemnification or advancement of expenses
which are broader or otherwise different from those set forth herein."
Item 16. Exhibits.
3.1 (1) Certificate of Incorporation of the Company
3.2 (1) Bylaws of the Company
4.1 (1) Specimen of Common Stock Certificate
4.2 (4) Amended Certificate of Designations of the Company
5.1 Opinion of Oppenheimer Wolff & Donnelly LLP re: legality of shares
10.1 (1) Loan Agreement dated May 15, 1996 between Virtual Telecom SA and
New Capital Investment Fund
10.2 (1) Partnership Outsourcing Agreement dated September 9, 1996 between
Virtual Telecom SA and Digital Equipment Corporation
10.3 (1) Employment Agreement dated May 31, 1996 between Virtual Telecom SA
and Neil Gibbons
10.4 (1) Employment Agreement dated May 31, 1996 between Virtual Telecom SA
and Daniel Huber
10.5 (1) Computer Software License Agreement dated January 16, 1997 between
Virtual Telecom SA and Townsend Analytics, Ltd.
10.6 (1) Information and Distribution License Agreement dated August 23,
1996 between Virtual Telecom SA and McGraw-Hill International (UK)
Ltd.
10.7 (1) Agreement for Global Telecommunications Services dated October 1,
1996 between Virtual Telecom SA and BT Limited London (British
Telecom)
10.8 (1) Unidata Frame Relay & Unimaster Services dated October 22, 1996
between Virtual Telecom SA and Swiss Telecom ITT
10.9 (1) News Distributor Agreement dated January 7, 1997 between Virtual
Telecom SA and AFX News Limited
10.10 (1) 1997 Stock Option Plan of the Company
10.11 (3) Series B Preferred Stock Purchase Agreement dated December 18,
1997
10.12 (3) Investor Rights Agreement dated December 18, 1997
10.13 (3) Software License Agreement between the Company and IQ Net
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<PAGE>
10.14(3) Series C Preferred Stock Purchase Agreement dated January 25, 1999
10.15(3) Amended and Restated Investor Rights Agreement dated January 25,
1999
10.16(3) Amendment to the Software Distributor Agreement of January 16, 1997
dated December 10, 1998 between Virtual Telecom SA and Townsend
Analytics, Ltd.
10.17(4) Sale and Purchase Agreement of the shares of Stockdata BV dated
December 24, 1999, between FirstQuote Inc. and the stockholders of
Stockdata B.V.
10.18(4) Registration Rights Agreement pursuant to the Private Placement of
Common Stock which was closed on March 20, 2000
16.1 (2) Letter from Raimondo, Pettit & Glassman regarding Change of
Independent Public Accountant
23.1 Consent of Oppenheimer Wolff & Donnelly LLP (filed as part of
Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
27.1(4) Financial Data Schedule
_____________________________________________________________
(1) Previously filed as part of registration statement on Form 10-SB (SEC File
No. 0-22351) filed with the Securities and Exchange Commission on April 7,
1997.
(2) Previously filed as part of Current Report on Form 8-K/A (SEC File No.
0-22351) filed with the Securities and Exchange Commission on December 23,
1997.
(3) Previously filed as part of annual report on Form 10-KSB (SEC File No.
0-22351) for the fiscal year ended December 31, 1999.
(4) Previously filed as part of annual report on Form 10-KSB (SEC File No.
0-22351) for the fiscal year ended December 31, 1999.
Item 28. Undertakings.
(a) 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
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<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(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.
(b) 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 provisions described herein, 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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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and authorized this Registration Statement
on Form S-3 to be signed on its behalf by the undersigned, thereunto duly
authorized, in Geneva, Switzerland, on May 8, 2000.
FIRSTQUOTE INC.
By: /s/ Neil G. Gibbons
--------------------------------------
Neil G. Gibbons,
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Neil G. Gibbons President and Chief Executive May 8, 2000
- --------------------------------- Officer and Director
Neil G. Gibbons (principal executive officer)
/s/ Mark Benn Chief Financial Officer May 8, 2000
- --------------------------------- (principal financial and
Mark Benn accounting officer)
/s/ Daniel Huber Director May 8, 2000
- ---------------------------------
Daniel Huber
/s/ Bryan Wood Director May 8, 2000
- ---------------------------------
Bryan Wood
Director
- ---------------------------------
Frank Verschoor
/s/ Paul Goossens Director May 8, 2000
- ---------------------------------
Paul Goossens
</TABLE>
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<PAGE>
EXHIBIT 5.1
OPPENHEIMER WOLFF & DONNELLY LLP
500 Newport Center Drive
Suite 700
Newport Beach, California 92660
(949) 719-6000
(949) 719-6040 (Fax)
May 9, 2000
FirstQuote Inc.
12 Avenue des Morgines
1213 Petit Lancy 1
Geneva, Switzerland
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
As counsel for FirstQuote Inc., a Delaware corporation (the "Company"), we
have examined its Certificate of Incorporation, as amended, Bylaws and such
other corporate records, documents and proceedings, and such questions of law as
we have deemed relevant for the purpose of this opinion. We have also, as such
counsel, examined the Registration Statement on Form S-3 of the Company as filed
with the Securities and Exchange Commission, covering the registration under the
Securities Act of 1933, as amended, of a total 197,815 shares of $.001 par value
common stock ("Common Stock"), including the exhibits and form of Prospectus
(the "Prospectus") pertaining thereto, and any amendments thereto (collectively,
the "Registration Statement").
Upon the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly authorized and validly existing in
good standing under the laws of the State of Delaware, with all requisite power
to conduct the business described in the Registration Statement.
2. The shares of the Company's Common Stock registered pursuant to the
Registration Statement have been duly and validly authorized and, subject to the
payment therefor pursuant to the terms contemplated in the final Prospectus,
such shares of Common Stock will be duly and validly issued as fully paid and
non-assessable securities of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Oppenheimer Wolff & Donnelly LLP
<PAGE>
EXHIBIT 23.2
Arthur Andersen SA
Route de Pre-Bois 29
1215 Geneve 15
Telephone 022 929 42 42
Fax 022 929 4200
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, we hereby consent to the incorporation of our
report dated March 30, 2000 included or incorporated by referenced in the annual
report on Form 10-KSB, into the Company's Forms S-3 and SB-2 Registration
Statement.
ARTHUR ANDERSEN SA
Geneva, Switzerland
May 3, 2000
