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As filed with the Securities and Exchange Commission on August 14, 1997
Registration No. 333-22325
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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QUARTERDECK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-4320650
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
13160 Mindanao Way
Marina del Rey, California 90292
(310) 309-3700
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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RON BEN YEHUDA, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
QUARTERDECK CORPORATION
13160 MINDANAO WAY
MARINA DEL REY, CALIFORNIA 90292
(310) 309-3700
(Name, address, including zip code and telephone number,
including area code, of agent for service)
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COPY TO:
KAREN E. BERTERO, ESQ.
GIBSON, DUNN & CRUTCHER LLP
333 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071-3197
(213) 229-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE
EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), other than securities
offered only in connection with dividend or interest reinvestment plans, check
the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant 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 from 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.[ ]
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a) MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 14, 1997
PROSPECTUS
QUARTERDECK CORPORATION
COMMON STOCK
($.001 PAR VALUE)
1,180,358 SHARES
This Prospectus relates to 1,180,358 shares, subject to certain
anti-dilution and other adjustments, of Common Stock, par value $.001 per share
("Common Stock"), of Quarterdeck Corporation, a Delaware corporation (the
"Company"), issuable upon conversion of $25,000,000 principal amount of the
Company's 6% Convertible Senior Notes due March 31, 2001 (the "Notes"). The
Company is registering the Common Stock pursuant to the terms of a Note
Agreement dated as of March 1, 1996, between the Company and the holder of the
Notes (the "Note Agreement").
The Company will not receive any proceeds from conversion of the Notes
into shares of Common Stock. The Company will pay all of the expenses associated
with the registration of the Common Stock, estimated to be approximately
$55,500.
The Common Stock is quoted on the Nasdaq National Market under the
symbol "QDEK." On August 13, 1997, the last reported sale price per share of the
Common Stock, as quoted on the Nasdaq National Market, was $2.6875.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is __________ __, 1997.
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AVAILABLE INFORMATION
Statements contained in this Prospectus as to the content of any
contract or other document are not necessarily complete, and in each instance
reference is made to the copy of the contract or other document filed as an
exhibit to this Registration Statement on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission (the
"Commission"), each statement being qualified in all respects by such reference
and the exhibits and schedules hereto, which may be inspected without charge at
the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
and copies of the Registration Statement or any part thereof may be obtained
from such office, upon payment of the fees prescribed by the Commission.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed with
the Commission by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
500 West Madison Street, Room 1400, Chicago, Illinois 60606 and at the Jacob K.
Javits Federal Building, 75 Park Place, New York, New York 10278. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains a website that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission, the address of which is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are by
this reference incorporated in and made a part of this Prospectus: (i) the
Annual Report on Form 10-K for the fiscal year ended September 30, 1996, (ii)
the Current Reports on Form 8-K dated October 7, 1996, November 25, 1996,
December 3, 1996, January 14, 1997, January 14, 1997, April 3, 1997, April 14,
1997 and May 23, 1997, (iii) the Quarterly Reports on Form 10-Q for the quarters
ended December 31, 1996 and March 31, 1997, (iv) the Registration Statement on
Form 8-A filed April 26, 1991, and (v) all documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the filing of a post-effective amendment which
indicates that all Securities offered hereby have been sold or which deregisters
all Securities then remaining unsold. Any statement contained in a 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
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Copies of all documents that are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents or into this Prospectus) will be
provided without charge to each person, including any beneficial owner, to whom
this Prospectus is delivered, upon a written or oral request to Quarterdeck
Corporation, Attention: Corporate Secretary, 13160 Mindanao Way, Third Floor,
Marina del Rey, California 90292, telephone number (310) 309-3700.
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THE COMPANY
The Company develops, markets and supports computer software that
enhances the performance, user productivity and cost-effectiveness of personal
computing in standalone and networked environments. The Company provides its
software solutions to individuals, business, and government/education users
through retail distribution, resellers, direct marketing operations and Internet
downloads.
The Company was incorporated in California in 1982 as Quarterdeck
Office Systems. In June 1991, the Company changed its state of incorporation
from California to Delaware and in February 1995 changed its name to Quarterdeck
Corporation.
The principal offices of the Company are located at 13160 Mindanao Way,
Third Floor, Marina del Rey, California 90292, telephone number (310) 309-3700.
RISK FACTORS
The Securities offered hereby are speculative in nature and
involve a high degree of risk. In addition to the other information included
elsewhere in this Prospectus and in the Company's filings with the Commission,
the following factors should be considered carefully in evaluating an investment
in the Securities offered by this Prospectus.
DEPENDENCE ON NEW PRODUCTS AND ADAPTATION TO TECHNOLOGICAL CHANGE
The computer software industry is subject to rapid
technological change often evidenced by new competing products, improvements in
existing products and improvements and/or upgrades to operating systems. The
Company depends on the successful development or acquisition and resulting sales
of new products, including upgrades of existing products, to replace revenues
from products introduced in prior years that have begun to experience reduced
revenues or have become obsolete. If the Company's leading products become
outdated or are rendered obsolete as a result of improvements in operating
systems, hardware or technology generally, and lose market share faster than
those revenues are replaced by new products or if new products or existing
product upgrades are not introduced in a timely manner or do not achieve the
revenues anticipated by the Company, the Company's operating results could be
materially adversely affected. Even with normal development cycles, the market
environment can change so quickly that features in certain products can become
outdated soon after market introduction. These events may occur in the future
and may have an adverse effect on future revenues and operating results.
The Company is focusing significant efforts on evolving its
core utilities and communication product lines into a set of products designed
to enhance user performance, simplify system management and reduce the ongoing
cost of ownership for networked personal computing. As part of this effort, the
Company is developing new products and adapting its current technology into
these products and has made and may continue to make strategic acquisitions and
divestitures. There is no assurance these efforts will be successful. Other
significant risks associated with the Company's focus on this category of
products include the timing of releases in relation to competitive products,
uncertainties surrounding the rate and extent of development of this new market
and one-time losses and charges that may result from divestitures of non-core
assets.
The Company is also devoting substantial efforts to the
development of software products that are designed to operate on Microsoft's
Windows 95 and Windows NT. As a result of this focus, the Company's current
revenues and profitability are dependent on the viability of such operating
systems. In addition, Microsoft Corporation may incorporate advanced utilities
or other features in Windows 95 and/or Windows NT that may
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decrease the demand for certain of the Company's products including those under
development. Should the Company not be able to develop and market products
successfully and timely that function under Windows 95 and Windows NT, and offer
perceived value to Windows 95 and Window NT users beyond that which is offered
in the base operating system, future revenues would be adversely affected. In
recent quarters, the Company has suffered a substantial decline in revenues from
its memory management products including QEMM and MagnaRam as Microsoft has
developed operating systems with fewer conventional memory limitations, as the
perceived need for software specifically designed to address the memory
management limitations in DOS and Windows 3.x and in DOS based applications has
declined and as the cost of RAM has declined. While the Company expects that its
memory management products will continue to provide a benefit to users of
Windows 95, Windows 3.x and DOS systems, there is no assurance that memory
management products will be perceived as needed on such systems.
COMPETITION
The personal computer market is intensely competitive, subject
to strategic alliances of hardware and software companies and characterized by
rapid changes in technology and frequent introductions of new products and
features. The Company's competitors include developers of operating systems,
applications and utility software vendors and personal computer manufacturers
that develop their own software products. The Company expects to encounter
continued competition both from established companies and from new companies
that are now developing, or may develop, competing products. Many of the
Company's existing and potential competitors have financial, marketing and
technological resources significantly greater than those of the Company.
The Company's memory management and other utility products
compete directly with the memory management and utility features of Microsoft
Windows 95, Microsoft Windows 3.x and DOS, as well as with other third-party
memory management products and other utility software products.
Future competitive product releases may cause disruptions in
orders for the Company's products while users and the marketplace evaluate the
competitive products. The extent of the disruption in orders and the impact on
future orders of the Company's products will depend on various factors that are
not fully known at this time, including the level of functionality, performance
and features included in the final release of these competitive products and the
price thereof and the market's evaluation of competitive products compared to
the then current functionality, performance, features and price of the Company's
products.
The Company anticipates that the type and level of competition
experienced to date will continue, and may increase, and future sales of its
products will be dependent upon the Company's ability to timely and successfully
develop or acquire new products or enhanced versions of its existing products
for Windows 95 and Windows NT and/or other operating systems that may gain
market acceptance. In addition, the Company must demonstrate to the user a need
for the Company's products while developers of operating systems and competitive
software products continue to enhance their products. To the extent that
operating system enhancements, competitive products or bundling of competitive
products with operating systems or computer hardware reduce the number of users
who perceive a benefit from the Company's products, sales of the Company's
products in the future would be adversely impacted.
The Company is focusing significant efforts on evolving its
core utilities and communication product lines into a set of products designed
to enhance user performance and simplify system management for networked
personal computing. Although this category of products is relatively
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new, it is already intensely competitive and many of the Company's competitors
are significantly larger than the Company and have access to greater capital and
other resources.
LOSSES AND LIQUIDITY
The Company suffered a net loss of $74.9 million for the
fiscal year ended September 30, 1996. The loss was primarily a result of charges
associated with acquisitions and restructuring, lower demand for memory
management products, additional reserves for product returns and higher general
and administrative expenses resulting from redundancies relating to acquisitions
which were not integrated as quickly as expected. Continued weakness in sales of
the Company's memory management products and/or communications products could
have a material adverse effect on future revenues. The Company also suffered a
net loss of approximately $832,000 for the fiscal quarter ended March 31, 1997
after a write-down of approximately $1.6 million with respect to the Company's
investment in Infonautics, Inc. Primarily as a result of such losses, the
Company suffered a significant decrease in its cash position and has experienced
working capital deficits.
During fiscal 1996, the Company implemented a comprehensive,
corporate-wide restructuring plan. This restructuring focused the Company in the
utilities and communications software categories. The Company is currently
attempting to evolve its core utilities and communication product lines into a
set of products designed to enhance user performance, simplify system management
and reduce the ongoing cost of ownership for networked personal computing. As
part of this effort, the Company has made and may continue to make strategic
acquisitions and divestitures. In connection with the implementation of these
strategic transactions and the restructuring generally, the Company may take
additional charges and write-downs which could have a material adverse effect on
the Company's financial results.
In April 1997, the Company established a new credit facility
with Greyrock Business Credit with a maximum borrowing amount of $12 million
(subject to a borrowing base). The Company may in the future explore various
other financing alternatives, if necessary, in order to finance the core
business of the Company and help provide adequate working capital for
operations. There can be no assurance that the Company will not suffer
additional losses in the future (including additional write-downs of assets),
that adequate operating funds will be internally generated, or that additional
financing, if necessary, will be available, or if available, will be available
on acceptable terms.
MANAGEMENT OF ACQUISITIONS
Since June 1995, the Company has consummated a number of
acquisitions. The Company may make additional acquisitions in the future. While
these acquisitions have broadened the Company's product portfolio and sales
distribution channels, the acquisitions have resulted in the Company competing
with companies and in markets where it has not previously competed. There are
significant business risks associated with acquisitions, including the
successful integration of the companies in an efficient and timely manner, the
coordination of research and development and sales efforts, the retention of key
personnel, the diversion of management's attention from day to day matters and
the integration of acquired products. Additionally, there may be an adverse
impact on the revenues of acquired companies due to the transition of products
sales and marketing and research and development activities. The Company's
results for fiscal 1996 were negatively impacted by slower than anticipated
integration including slower elimination of redundancies resulting from
acquisitions. The Company's future success will depend, in part, on its ability
to integrate the operations of acquired companies and effectively utilize the
acquired intellectual property.
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SUBSTANTIAL DEPENDENCE ON DISTRIBUTION CHANNELS
A substantial portion of the Company's domestic and
international sales are made through a limited number of personal computer
hardware and software distributors which represent the Company on a
non-exclusive basis. If the Company were to lose all or a significant portion of
the revenue attributable to any of its principal distributors, or if its
principal distributors were to lose sales of the Company's products to any of
their principal accounts, the loss could have a material adverse affect on the
Company's operating results. In addition, there has been a trend toward
consolidation of distributors of personal computer hardware and software
products. A reduction in the number of software distributors will increase the
Company's dependence upon its major distributors and could affect their
willingness to distribute and promote products of the Company.
"CHANNEL FILL" AND PRODUCT RETURNS
The Company's pattern of revenues and earnings were affected
during prior periods and may be affected in the future by the phenomenon known
as "channel fill." Channel fill occurs following the introduction of a new
product or a new version of a product as distributors buy significant quantities
of the new product or version in anticipation of sales of such product or
version. Following such purchases, the rate of distributors' purchases often
declines, depending on the rates of purchases by end users or "sell-through."
The phenomenon of "channel fill" may also occur in anticipation of price
increases or in response to sales promotions or incentives, some of which may be
designed to encourage customers to accelerate purchases that might otherwise
occur in later periods. Channels may also become filled simply because the
distributors are unable to, or do not, sell their inventories to retail
distribution or end users as anticipated. If sell-through does not occur at a
sufficient rate, distributors will delay purchases or cancel orders in later
periods or return prior purchases in order to reduce their inventories. In
addition, between the date the Company announces a new version or new product
and the date of release, distributors, dealers and end users often delay
purchases, cancel orders or return products in anticipation of the availability
of the new version of the product. Such order delays or cancellations can cause
material fluctuations in revenues from one quarter to the next. Net revenues may
be materially affected favorably or adversely by these effects. Like other
manufacturers of package software products, the Company is exposed to the risk
of product returns from distributors and reseller customers. Quarterdeck's
return policy generally allows its distributors, subject to certain limitations,
to return purchased products in exchange for new products or for credit toward
future purchases. However, competitive factors and/or market conditions often
require the Company to offer expanded rights of return for products that
distributors or retailers are unable to sell. The Company also provides price
protection rights to its distributors which generally give distributors credit
for price decreases on products remaining in the distributors' inventory and on
products remaining in retail customers' inventory. The Company estimates and
maintains reserves for product returns. In addition to detailed historical
return rates, the Company's estimate of return reserves takes into account
future product upgrades and new releases, current market conditions and customer
inventories, as well as any other known factors that could impact anticipated
returns. There can be no assurance that actual returns in excess of recorded
allowances will not occur. If such returns occur, they will result in a material
adverse effect on business, operating results and financial condition.
DEPENDENCE ON AND INTENSE COMPETITION FOR KEY PERSONNEL
Recruitment of personnel in the computer software industry is
highly competitive. The Company's success depends to a significant extent upon
the performance of its executive officers and other key personnel. The loss of
the services of key individuals could have a material adverse effect on the
Company. The Company's future success will depend in part upon its continued
ability to attract and
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retain highly qualified personnel. The Company's ability to attract and retain
highly qualified personnel may be adversely affected by the Company's recent
restructurings and resulting financial performance. There can be no assurance
that the Company will be successful in attracting and retaining such personnel.
PATENTS AND PROPRIETARY INFORMATION
The Company relies on a combination of trade secret, patent,
copyright and trademark laws and license agreements to protect its rights to its
products. The Company holds two United States patents relating to memory
management, one of which expires in 2010 and the other of which expires in 2011
and one of its subsidiaries holds a patent relating to virtual screen overlays
that expires in 2013. The Company believes that its software products are
proprietary and protects them with copyrights, trade secrets and non-disclosure
agreements. The Company provides its products to end users under a non-exclusive
license that by its terms limits the warranties provided by and liability of the
Company. The ability of software companies to enforce such licenses has not been
finally determined by the U.S. Supreme Court. The Company's trademark and
service mark rights include rights associated with its use of its trademarks and
servicemarks, and rights obtained by registrations of its trademarks and
servicemarks ("marks"). The Company has applied for or obtained United States
trademark registrations for certain marks and has applied for or obtained
registrations in various international jurisdictions. The use and registration
by the Company of its marks do not assure that the Company has superior rights
to others that may have registered or used identical or related marks on related
goods or services, nor that such registrations or uses by others will not be
used to attempt to foreclose use of a particular mark by the Company.
The extent to which U.S. and foreign copyright and patent laws
protect software has not been fully determined. In addition, changes in the
interpretation of copyright and patent laws could expand or reduce the extent to
which the Company or its competitors are able to protect their software and
related intellectual property.
Because the computer industry is characterized by
technological changes, the policing of the unauthorized use of computer software
is a difficult task. Software piracy is expected to continue to be a persistent
problem for the packaged software industry. Despite steps taken by the Company
to protect its software products, third parties still make unauthorized copies
of the Company's products for their own use or for sale to others. These
concerns are particularly acute in certain international markets.
LITIGATION
Shareholder complaints were filed in November and December
1996 and January 1997 in the Superior Court of the State of California, County
of Los Angeles, against the Company and one former and one current officer of
the Company. A shareholder complaint was filed in June 1997 in the United
States District Court of the Central District of California against the Company
and one former and one current officer of Quarterdeck alleging, among other
things, violations of certain provisions of federal securities laws relating to
statements made about Qaurterdeck. These complaints allege, among other things,
violations of certain provisions of California securities laws relating to
statements made about the Company and in June 1997 in United States District
Court alleging among other things violation of federal securities laws. The
suits are purportedly brought on behalf of all persons who purchased the
Company's common stock during the period January 26, 1996 through June 13, 1996
and seeks damages in an unspecified amount and other relief. To date the Company
has not filed a response to the complaints. Due to the early stage of the
litigation and the inherent uncertainty, management is unable to estimate the
impact on the Company's results of operations, financial condition, or
liquidity, if any. Accordingly, no provision for any liability that may result
from these suits has been made in the Company's consolidated financial
statements (other than with respect to the $250,000 deductible under the
Company's directors and officers insurance policy which has been utilized for
costs relating to the defense). However, no assurances can be given that the
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ultimate disposition of these cases will not have a material adverse effect on
the Company's results of operations and financial condition, or liquidity.
In March 1997, a purported class action lawsuit brought on
behalf of all licensees of MagnaRAM2 residing in the United States, Jack Abbott,
et al. v. Quarterdeck Corporation, Case No. 00709198, was filed in the Superior
Court of the State of California, County of San Diego. The complaint alleges,
among other things, that MagnaRAM2 fails to significantly increase Random Access
Memory or otherwise help Windows 95 and Windows 3.x users. The plaintiffs seek
compensatory damages and punitive damages in unspecified amounts, injunctive
relief, and attorney fees and costs. Quarterdeck intends to defend the case
vigorously and to oppose any effort to certify the claims for class resolution.
Quarterdeck is a defendant in various other pending claims and
lawsuits. Although there can be no assurances, management believes that the
disposition of such matters will not have a material adverse impact on the
results of operations or financial position of the Company.
FLUCTUATIONS IN OPERATING RESULTS AND STOCK PRICE
The Company's future operating results and stock price could
be subject to significant fluctuations and volatility. The Company's revenues
and quarterly operating results may experience significant fluctuations and be
unpredictable as the result of a number of factors including, among others,
introduction of new or enhanced products by the Company or its competitors,
rapid technological changes in the Company's markets, seasonality of revenues,
changes in operating expenses and general economic conditions. The Company's net
revenues and net income (loss) have fluctuated significantly from year to year
and from quarter to quarter since the Company's initial public offering June
1991.
The Company also has experienced wide fluctuations in its
stock price, which may be subject to significant fluctuations in the future over
a short period of time. The trading price of the Common Stock increased from
approximately $3.00 in January 1995 to a high of approximately $39.00 in
December 1995 to a low of approximately $2.00 in May 1997. Fluctuations may be
due to factors specific to the Company, to changes in analysts' estimates or to
factors affecting the computer industry or the securities markets in general. In
addition, the existence or conversion of any outstanding convertible securities,
any decline in revenues or quarterly operating results, or the failure to meet
market expectations, could have an immediate and significant effect on the
trading price of the Common Stock in any given period.
INTERNATIONAL OPERATIONS
The Company has operations in various foreign locations.
International operations are subject to certain risks common to international
activities, such as changes in foreign governmental regulations, tariffs and
taxes, export license requirements, the imposition of trade barriers,
difficulties in staffing and managing foreign operations, and political and
economic instability.
The Company conducts business in various foreign currencies
and is therefore subject to the transaction exposures that arise from foreign
exchange rate movements between the dates that foreign currency transactions are
recorded and the date that they are consummated. The Company is also subject to
certain exposures arising from the translation and consolidation of the
financial results of its foreign subsidiaries. There can be no assurance that
actions taken to manage such exposure will be successful or that future changes
in currency exchange rates will not have a material impact on the Company's
future operating results. The Company does not hedge either its translation risk
or its economic risk.
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DILUTION
The Company has issued a substantial number of shares of its
Common Stock (and securities convertible into shares of its Common Stock) over
the past two years in connection with acquisitions and financing transactions.
The issuance of additional shares of Common Stock upon the conversion of
convertible securities or otherwise will reduce the percentage ownership of the
Company by each existing stockholder.
SHARES ELIGIBLE FOR FUTURE SALE
As of the date of this Prospectus, there are approximately 40
million shares of Common Stock and 150,000 shares of Series B Preferred Stock
issued and outstanding. Each share of Series B Preferred Stock is convertible
into the number of shares of Common Stock equal to the quotient of (i) $100.00
divided by (ii) the Conversion Price. The Conversion Price is the lesser of (A)
101% of the average of the daily volume-weighted average prices of the Common
Stock on the Nasdaq National Market System (or such national securities exchange
or other interdealer quotation system on which the Common Stock is then listed
or quoted) (the "Market Price") during the 40 trading day period ending two
trading days before the date on which the Company receives a notice of
conversion from a holder of the Series B Preferred Stock (the "Conversion
Date"), and (B) 125% of the average of the Market Price of Common Stock during
the first five trading days of the 40 trading day period ending two trading days
before the Conversion Date. All shares of Common Stock issuable upon conversion
of the Series B Preferred Stock are freely tradable. To date, 50,000 shares of
Series B Preferred Stock have been converted into 1,909,869 shares of Common
Stock. No prediction can be made as to effect, if any, that future sales of
Common Stock, or the availability of shares for future sale, will have on the
market price of Common Stock prevailing from time to time. Sales or issuances of
substantial amounts of Common Stock (including shares issued upon conversion of
Series B Preferred Stock or upon the exercise or conversion of stock options or
any warrants or debt securities), or the perception that such sales or issuances
could occur, could adversely affect prevailing market prices for the Common
Stock.
Documents incorporated by reference in this Prospectus contain
disclosure regarding certain risk factors with respect to the Company and an
investment therein. Potential investors are urged to consider such risk factors
prior to making an investment decision with respect to the Common Stock.
FORWARD LOOKING STATEMENTS
This Prospectus as well as documents incorporated by reference in this
Prospectus contain forward looking statements which are made pursuant to the
safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
Expressions of future goals and similar expressions reflecting something other
than historical fact are intended to identify forward-looking statements, but
are not the exclusive means of identifying such statements. These
forward-looking statements involve a number of risks and uncertainties,
including the timely development and market acceptance of products and
technologies, successful integration of acquisitions, the ability to secure
additional sources of financing, the ability to reduce operating expenses and
other factors described in such documents. The actual results that the Company
achieves may differ materially from any forward-looking statements due to such
risks and uncertainties. The Company undertakes no obligations to revise or
update any forward-looking statements in order to reflect events or
circumstances that may arise after the date of this Prospectus.
9
<PAGE> 11
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock offered hereby.
PLAN OF DISTRIBUTION
The Common Stock covered by this Prospectus will be issued from time to
time by the Company upon conversion of the Notes.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Gibson,
Dunn & Crutcher LLP, Los Angeles, California.
MISCELLANEOUS
NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, COMMON STOCK
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee $ 7,576
Nasdaq Application Fee 17,500
Legal fees and expenses* 12,500
Accounting fees and expenses* 10,000
Blue sky fees and expenses* 2,500
Miscellaneous* 5,000
-----------
TOTAL* $ 55,076
===========
</TABLE>
- -------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 145 of the Delaware General Corporation Law,
the Bylaws of the Registrant provide: (i) the Registrant is required to
indemnify its directors and officers and may indemnify its other employees and
agents, and persons serving in such capacities in other business enterprises
(including, for example, subsidiaries of the Registrant) at the Registrant's
request, to the fullest extent permitted by Delaware law, including those
circumstances in which indemnification would otherwise be discretionary; (ii)
the Registrant is required to advance expenses, as incurred, to such directors
and officers and may advance expenses to such other employees and agents in
connection with defending a proceeding (except that it is not required to
advance expenses to a person against whom the Registrant brings a claim for
breach of the duty of loyalty, failure to act in good faith, intentional
misconduct, knowing violation of law or deriving an improper personal benefit);
(iii) the rights conferred in the Bylaws are not exclusive and the Registrant is
authorized to enter into indemnification agreements with such directors,
officers, employees and agents; (iv) the Registrant may maintain director and
officer liability insurance to the extent reasonably available; and (v) the
Registrant may not retroactively amend the Bylaw provisions in a way that is
adverse to such directors, officers, employees and agents. The Registrant has
also entered into an agreement with its directors and certain of its officers
indemnifying them to the fullest extent permitted by the foregoing. These
indemnification provisions, and the Indemnification Agreements entered into
between the Registrant and its directors and certain of its officers, may be
sufficiently broad to permit indemnification of the Registrants, officers and
directors for liabilities arising under the Securities Act.
II-1
<PAGE> 13
ITEM 16. EXHIBITS
The following are filed as exhibits to this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- ---------------------- ----------------------------------------------------
<S> <C>
4.1* Note Agreement, dated as of March 1, 1996, between
Quarterdeck Corporation and The Northwestern Mutual
Life Insurance Company, as holder of the Notes.
5.1** Opinion and Consent of Gibson, Dunn & Crutcher LLP.
23.1** Consent of Gibson, Dunn & Crutcher LLP (contained in
Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP, independent certified
public accountants.
23.3 Consent of KPMG Peat Marwick LLP, independent certified
public accountants.
24.1** Power of Attorney.
</TABLE>
* Previously filed as an exhibit to the Company's Current Report on Form 8-K,
filed March 28, 1996.
** Previously filed as an exhibit to this Registration Statement on Form S-3
(File No. 333-22325) on February 25, 1997.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein and the
offerings of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matters have been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes:
II-2
<PAGE> 14
(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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee," table in the effective registration statement;
(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 imformation in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each 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.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on this 21st day of
July, 1997.
QUARTERDECK CORPORATION
By: /s/ Curtis A. Hessler
-----------------------------
Curtis A. Hessler
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Curtis A. Hessler President and Chief Executive Officer July 21, 1997
- ---------------------------------- and Director (Principal Executive Officer)
Curtis A. Hessler
* Senior Vice President and Chief Financial July 21, 1997
- ---------------------------------- Officer (Principal Financial and Accounting
Frank R. Greico Officer)
* Director July 21, 1997
- ----------------------------------
Frank W. T. LaHaye
* Director July 21, 1997
- ----------------------------------
Howard L. Morgan
* Director July 21, 1997
- ----------------------------------
King R. Lee
* Director July 21, 1997
- ----------------------------------
William H. Lane III
*By /s/ Curtis A. Hessler Attorney-in-fact July 21, 1997
- ----------------------------------
Curtis A. Hessler
</TABLE>
II-4
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- ----------------------------------------------------
<S> <C>
4.1* Note Agreement, dated as of March 1, 1996, between
Quarterdeck Corporation and The Northwestern Mutual
Life Insurance Company, as holder of the Notes.
5.1** Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1** Consent of Gibson, Dunn & Crutcher LLP (contained in
Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP, independent certified
public accountants.
23.3 Consent of KPMG Peat Marwick LLP, independent certified
public accountants.
24.1** Power of Attorney.
</TABLE>
- --------------
* Previously filed as an exhibit to the Company's Current Report on Form
8-K, filed March 28, 1996.
** Previously filed as an exhibit to this Registration Statement on Form
S-3 (File No. 333-22325), on February 25, 1997.
II-5
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-3 (No.
333-22325) of our report dated March 1, 1996, included in the form 10-K/A of
Quarterdeck Corporation dated August 14, 1997.
ARTHUR ANDERSEN LLP
St. Louis, Missouri
August 14, 1997
<PAGE> 1
Exhibit 23.3
The Board of Directors
Quarterdeck Corporation:
We consent to the use of our reports incorporated herein by reference.
KPMG PEAT MARWICK LLP
Los Angeles, California
August 11, 1997
