<PAGE>
SUBJECT TO COMPLETION
As filed with the Securities and Exchange Commission on April 2, 1999
Registration No. 333-68141
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
PRE-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
PC QUOTE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 6200 36-3131704
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S Employer Identification No.)
incorporation or organization) Classification Code Number)
</TABLE>
300 South Wacker Drive, Suite 300
Chicago, Illinois 60606
(312) 913-2800
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Jim R. Porter
Chief Executive Officer
PC Quote, Inc.
300 South Wacker Drive, Suite 300
Chicago, Illinois 60606
(312) 913-2800
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. X
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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. / /
PC Quote 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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
2
<PAGE>
Subject To Completion, Dated April 2, 1999
Prospectus
PC Quote, Inc.
118,000 Shares of Common Stock
-----------------
These shares may be offered and sold from time to time by two of PC Quote's
stockholders, Wildman, Harrold, Allen & Dixon and High Ridge Partners. They will
receive all of the proceeds and will pay all underwriting discounts and
selling commissions, if any, from the sale of the shares.
Our common stock is traded on the American Stock Exchange under the symbol
"PQT." On March 30, 1999, the last reported sale price of the common stock on
the American Stock Exchange was $9.4375 per share.
We have experienced significant operating losses, which have adversely
affected our current results of operations and liquidity. These conditions
raise doubt about our ability to continue as a going concern.
-----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-----------------
You should read the entire prospectus carefully before you make your
investment decision. You should rely only on the information contained in
this prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus. The selling
stockholders are offering to sell, and seeking offers to buy, shares of PC
Quote common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as
of the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of the shares.
-----------------
The SEC and state regulatory authorities have not approved or disapproved
these securities, or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
-----------------
Information contained herein is subject to completion or amendment. A
registration statement for these securities has been filed with the SEC.
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 any offer to buy nor
shall there be any sale of these securities in any state in which an offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
The date of this prospectus is April , 1999
3
<PAGE>
RISK FACTORS
You should consider carefully the following risk factors, and the
other information contained or incorporated by reference in this prospectus
in deciding whether to buy our common stock. These factors may cause actual
results, events or performance to differ materially from those expressed in
any forward-looking statements we made in this prospectus.
WE HAVE EXPERIENCED RECENT OPERATING LOSSES AND MAY NOT OPERATE
PROFITABLY IN THE FUTURE. We incurred a net loss of approximately $6.4 million
and reported a net loss available to common stockholders of approximately
$7.5 million for the year ended December 31, 1998. We may continue to incur
operating losses, which could hinder our ability to operate our current
business. As of December 31, 1998, we had an accumulated deficit of
approximately $27.6 million and deficit working capital of approximately $3.5
million. These conditions raise doubt about:
- our ability to continue as a going concern
- our ability to operate profitably in the future.
IF WE ARE NOT ABLE TO GENERATE A POSITIVE CASH FLOW, WE MAY REQUIRE
ADDITIONAL FINANCING TO CONTINUE AS A GOING CONCERN, WHICH MAY NOT BE READILY
AVAILABLE OR AVAILABLE ON FAVORABLE TERMS TO US. If generated cash flow is
not sufficient to fund operations, we may have to raise additional capital
externally. We have explored, and continue to explore, multiple alternatives
that may be available for the purpose of enhancing stockholder value. These
alternatives include a merger, a spin-off or sale of part of our business, a
strategic relationship or joint venture with another technology or financial
services firm and future equity financings. There can be no assurances,
however, that we will conclude a transaction. If we are unable to raise
necessary additional capital, we may be materially adversely affected and may
not be able to continue as a going concern. In addition, any capital raised
thorugh an equity financing could be costly to us and dilutive to our
stockholders.
4
<PAGE>
OUR COMMON STOCK MAY BE DE-LISTED FROM THE AMERICAN STOCK EXCHANGE,
WHICH MAY MAKE IT MORE DIFFICULT TO DISPOSE OF OUR COMMON STOCK. Our common
stock is listed with the American Stock Exchange, and due to our financial
condition and recent operating performance, our common stock may be de-listed.
If our common stock is de-listed, trading, if any, would be conducted on an
electronic bulletin board established for securities that do not meet listing
requirements or in what is commonly referred to as the "pink sheets." As a
result, you may find it more difficult to dispose of, or obtain accurate
quotations as to the price of, our common stock.
The American Stock Exchange takes into account many factors when
considering whether a security should continue to be listed. Among other
things, they consider:
- The degree of investor interest in the company;
- Its prospects for growth;
- The reputation of its management;
- The degree of commercial acceptance of its products; and
- Whether the company's securities have suitable characteristics for
auction market trading like:
- Value of securities;
- Amount available for market trading; and
- Number of holders of securities.
The decision to continue to list a security for trading is at the sole
discretion of the Board of Governors of the Exchange. They may consider
suspending dealings in, or removing from the list, securities of a company
which:
(a) has stockholders' equity of less than $2.0 million and the company has
had losses in two of its three most recent fiscal years;
(b) has stockholders' equity of less than $4.0 million and the company has
had losses in three of its four most recent fiscal years;
(c) has sustained losses in its five most recent fiscal years; or
(d) has sustained substantial losses in relation to its operations or
existing financial resources, or its financial condition has become so
impaired that in the opinion of the Exchange it appears questionable
whether the company will be able to continue operations and/or meet
its obligations when they come due.
Our operating results for the last four years were:
1995 - net income available to our common stockholders of $1.5 million;
1996 - net loss available to our common stockholders of $3.3 million; and
1997 - net loss available to our common stockholders of $11.1 million.
1998 - net loss available to our common stockholders of $6.4 million.
At December 31, 1998, we had stockholders' equity of $2.9 million, and
negative working capital of $3.5 million.
The Exchange may suspend or delist our securities since we have
losses in three of the last four years and stockholders' equity below $4.0
million. If necessary, we would try to raise additional capital to meet the
Exchange's requirements. There can be no assurances that we will be able to
raise additional capital.
WE MAY BE ADVERSELY AFFECTED IF WE ARE NOT YEAR 2000 COMPLIANT. If we,
or our data suppliers, are not Year 2000 compliant by December 31, 1999, we
may have to suspend our services for an indefinite amount of time, which
would materially affect our revenue and funds for operations. We are in the
process of testing our internal information technology systems to determine
Year 2000 compliance. We are also in the process of surveying our principal
suppliers and customers, to identify our potential exposure in the event they
are not Year 2000 compliant in a timely manner.
We believe that our information technology systems and services will
be Year 2000 compliant. We are not currently aware of any material impact on
our business, operations or financial condition due to Year 2000
non-compliance by any of our suppliers or major customers. Although we are
testing our systems and surveying our suppliers and major customers, there is
no assurance that our systems, or those of our suppliers or major customers,
will function correctly after December 31, 1999. Any malfunction in our
information technology systems, or those of our suppliers or major customers,
could cause us to incur significant costs and have a material adverse effect
on our business, financial condition and results of operations.
TWO OF OUR PRINCIPAL STOCKHOLDERS ARE IN A POSITION TO CONTROL
MATTERS REQUIRING STOCKHOLDER VOTE, WHICH MAY IMPAIR INVESTORS FROM REALIZING
MAXIMUM RETURNS ON THEIR INVESTMENT IN OUR COMPANY. As of the date of this
prospectus, two of our principal stockholders, PICO Holdings, Inc. and its
wholly-owned subsidiary Physicians Insurance Company of Ohio, own or have the
right to acquire approximately 48% of our shares of common stock that would
be outstanding after they exercised their rights to acquire additional
shares. They are in a position to control the outcome of matters requiring a
stockholder vote, including the election of directors. Such control could
have the effect of discouraging, or making more difficult, an unsolicited
acquisition of us by means of a tender offer, a proxy contest or otherwise,
even though an unsolicited acquisition could have resulted in our
stockholders receiving a premium for their shares or be otherwise
economically beneficial to them.
OUR AGREEMENTS WITH EXCHANGES, ENTITLING US TO RECEIVE
INFORMATION WHICH IS NECESSARY FOR US TO CONDUCT OUR BUSINESS, COULD BE
TERMINATED. We have agreements in place with the following exchanges, which
permit us to gather the information we need for our services:
- Canadian/Toronto;
- Chicago Board Options Exchange;
- Chicago Board of Trade/Mid America Commodity Exchange;
- Chicago Mercantile Exchange;
- Commodity Exchange Order;
- Kansas City Board of Trade;
- Minneapolis Grain Exchange;
- NASDAQ;
- New York Mercantile Exchange/Commodity Exchange;
- New York Stock Exchange/American Stock Exchange; and
- Options Price Reporting Authority.
Our agreement with NASDAQ expires on August 2nd of each year, with
automatic one-year renewals. However, either party may terminate the
agreement for any reason whatsoever, upon 90-days written notice. Our
agreements with all of the other exchanges listed above have a perpetual
duration. However, each of those agreements may be terminated, for any reason
whatsoever, upon 30-days written notice. All of our agreements with the
exchanges listed above may be terminated by such exchanges if any of the
following events occur:
- non-payment of amounts due;
- inadeqate control systems over dissemination of data; or
- failure to report the proper number of our subscribers.
The termination, expiration or non-renewal of any of these agreements
could inhibit our ability to provide high quality services to our clients and
have a material adverse effect upon our business, financial condition and
results of operations.
WE RELY ON A SOFTWARE LICENSING AGREEMENT WHICH COULD BE TERMINATED OR
ALLOWED TO EXPIRE. A significant software application which is offered to
subscribers for our financial data quotations and news services, PC Quote
6.0, is licensed by us from an unaffiliated third party.
5
<PAGE>
The termination of the license agreement by the unaffiliated third
party could have a material adverse effect on our business, financial
condition and results of operations. The license agreement is for a two-year
term and provides for automatic two-year renewals unless terminated by
delivering ninety days' notice prior to the renewal date.
WE RELY HEAVILY ON EXECUTIVE OFFICERS WHO DO NOT HAVE EMPLOYMENT
CONTRACTS. Our success is highly dependent upon the efforts and abilities of
our executive officers, particularly Mr. Jim Porter, the Chairman of the
Board and Chief Executive Officer, and Mr. John E. Juska, the Chief Financial
Officer. The loss of services of one or more of our executive officers for
any reason could have a material adverse effect upon our business, financial
condition and results of operations. Although our executive officers have
entered into agreements with us which contain nondisclosure covenants, those
agreements do not guarantee their continued employment with us.
WE COMPETE WITH CORPORATIONS WHO HAVE GREATER FINANCIAL, TECHNICAL AND
MONETARY RESOURCES THAN WE DO, WHICH COULD RESULT IN ADDITIONAL PRICING
PRESSURES ON US AND REDUCE OUR PROFITABILITY. Competition for the on-line
provision of financial information through services and software applications
similar to ours is intense. Such competition may impose additional pricing
pressures on us. We believe our primary competitors include Bridge
Information Systems, Bloomberg, the Comstock unit of Standard & Poors, the
ILX unit of Thomson Corporation, Reuters, Quote.com and Data Broadcasting
Corporation. Many of these competitors have significantly greater financial,
technical and marketing resources and greater name recognition than we do.
There can be no assurance that we will be able to compete successfully with
our existing competitors or with any new competitors.
OUR SUBSCRIPTION CONTRACTS FOR SERVICES AND SOFTWARE APPLICATIONS MAY
SUBJECT US TO LITIGATION, WHICH MAY BE COSTLY FOR US TO DEFEND. Many of our
subscription contracts are for services and software applications which are
critical to the operations of our customers' businesses. The failure or
inability to deliver services and software to our customers' satisfaction
could have a material adverse effect on their operations and could
consequently subject us to litigation. Any litigation could cause us to incur
legal fees and use management resources, which could have a material adverse
effect on our business, financial condition and results of operations.
OUR SUBSCRIPTION CONTRACTS ARE OF RELATIVELY SHORT DURATION, AND THEIR
TERMINATION OR NON-RENEWAL COULD ADVERSELY AFFECT OUR BUSINESS. Substantially
all of our subscription contracts are of relatively short duration. The
unexpected termination or non-renewal of contracts by a significant number of
customers could have a material adverse effect on our business, financial
condition and results of operations.
6
<PAGE>
WE MAY NOT BE ABLE TO KEEP IN PACE WITH CONTINUING CHANGES IN
INFORMATION PROCESSING TECHNOLOGY, EVOLVING INDUSTRY STANDARDS AND CLIENT
PREFERENCES. The information industry has experienced and is continuing to
experience rapid technological advances and developments. We are actively
engaged in research and development activities to try to meet our clients'
needs and preferences. There can be no assurance that we will be successful
in addressing technological advances and developments on a timely basis or
that, if addressed, we will be successful in the marketplace. A delay or
failure to address technological advances and developments could have a
material adverse effect on our results of operations. In addition, there can
be no assurance that technologies developed by others will not render our
services noncompetitive or obsolete.
OUR SOFTWARE MAY INFRINGE ON INTELLECTUAL PROPERTY RIGHTS OF OTHERS,
WHICH MAY SUBJECT US TO LITIGATION. We believe that our services and software
applications do not infringe upon the intellectual property rights of others
and that we have all rights necessary to utilize the intellectual property
employed in our business. However, we are subject to the risk of litigation
alleging infringement of third-party intellectual property rights. We
typically license the software we develop for use by our customers, and we
generally agree to indemnify our customers against potential third-party
intellectual property rights claims. Any claims could require us to:
- spend significant sums in litigation;
- pay damages;
- develop non-infringing intellectual property; and/or
- acquire licenses to the intellectual property which is the subject of
asserted infringement.
7
<PAGE>
OUR ANTI-TAKEOVER PROVISIONS MAY NOT BE IN THE BEST INTERESTS OF
OUR STOCKHOLDERS. Our Certificate of Incorporation and By-laws, the Delaware
General Corporation Law and the Exchange Act contain certain provisions that
could have the effect of discouraging or making more difficult the acquisition
of us by means of a tender offer, a proxy contest or otherwise, even
though an acquisition might be economically beneficial to our stockholders.
Our anti-takeover provisions include:
- only the Board of Directors or an authorized special committee of
the Board of Directors may call meetings of stockholders; and
- stockholders must comply with certain advance notice procedures to
nominate candidates for election as directors and to submit
proposals for consideration at stockholders' meetings.
These provisions may make the removal of management more difficult, even in
cases where such removal would be favorable to the interests of our
stockholders.
A DECREASE IN THE ACTIVITY IN FINANCIAL MARKETS COULD NEGATIVELY AFFECT
OUR SUBSCRIPTION REVENUE, WHICH WOULD REDUCE OUR PROFITABILITY. Our revenue is
derived from supplying financial data and quotations related to U.S.
financial exchanges and markets. Any significant downturn or other negative
development with respect to those exchanges and markets could adversely
effect our revenue.
8
<PAGE>
RECENT DEVELOPMENTS
RECENT FINANCIAL DEVELOPMENTS - INCREASE IN WORKING CAPITAL. In
February 1999 we increased our stockholders' equity and working capital by
approximately $550,000 through the exercise of previously issued warrants and
employee options and concurrent sale of common shares.
In November and December 1998, we increased our stockholders' equity and
working capital by approximately $7.9 million through the following
transactions:
1. In November 1998, we issued 100,000 shares of our common stock to our
legal counsel, Wildman, Harrold, Allen & Dixon, as consideration for
the legal services rendered to us in 1998. Also in November 1998, we
issued 18,000 shares to High Ridge Partners, as compensation for
ongoing financial consulting services provided by them to us. The
shares were issued at the fair market value of the shares, as
determined by the closing sale price of the shares on the AMEX on
Monday, November 16, 1998. The shares were issued in reliance on a
private placement exemption under the securities laws.
2. On December 17, 1998, our stockholders approved an agreement to convert
$6.7 million of our debt owned by PICO Holdings, Inc. and its
affiliate, Physicians Insurance Company of Ohio, into convertible
preferred stock and a warrant to purchase shares of our common stock.
The following day, we completed the conversion of the $6.7 million
debt, and issued:
(a) 19,075 shares of our Series A preferred stock, convertible into
a minimum of 1,907,500 shares of our common stock, to
Physicians Insurance Company of Ohio;
(b) 28,791 shares of our Series B preferred stock, convertible into
a minimum of 2,879,100 shares of our common stock, to PICO
Holdings, Inc.; and
(c) a warrant expiring April 30, 2005 to purchase up to
3,106,163 shares of our common stock at $1.575 per share, to
PICO Holdings, Inc.
In addition, we extended the expiration date of warrants to purchase
949,032 shares of our common stock previously acquired by PICO
Holdings, Inc. to April 30, 2005.
3. On December 30, 1998, we issued to three investors in a private
placement for $1.0 million in cash:
(a) 640,000 shares of our common stock; and
(b) warrants expiring December 30, 2001 to purchase up to 320,000
shares of our common stock at $1.875 per share.
Prior to the conversion of the $6.7 million debt, PICO Holdings, Inc. and
Physicians Insurance Company of Ohio owned or had the right to acquire
approximately 30.9% of our then outstanding common stock. After the completion
of the transactions described above, PICO Holdings, Inc. and Physicians
Insurance Company of Ohio own or have the right to acquire approximately 48%
of our presently outstanding common stock.
RECENT BUSINESS DEVELOPMENTS - NEW INTERNET DIVISION. In December, 1998 we
formed an internal Internet division, PCQuote.com. An outgrowth of our
financial content web site, www.pcquote.com, the new division's objective is to
provide a comprehensive array of investment tools to empower the growing
sophistication of the individual investor.
Continued growth in page views, increasing attractive demographics and
subsequent increase in advertising revenue led to our decision to segregate the
web site into its own business unit. As a distinct business unit, the new
division will afford us more flexibility in considering opportunities that are
available solely to the Internet web site business.
RECENT BUSINESS DEVELOPMENTS - HYPERFEED 2000. In March 1999 we announced
the introduction of HyperFeed 2000, the next generation of market-data
delivery technology. HyperFeed 2000 is designed to address two issues in the
dissemination of real-time market data-volume and price. Record volume and
record peak transactional volume experienced by securities markets over the
last year has made it increasingly difficult to deliver the massive amounts
of real-time market data. HyperFeed 2000 combines advanced IP Multicast
technology with a new proprietary compression technique to allow our
customers to receive a complete T-1 HyperFeed at a fraction of the current
communications cost. HyperFeed 2000 is being offered as a new service
offering to our new and existing customers.
RECENT BUSINESS DEVELOPMENTS - JB OXFORD. In October, 1998, we entered
into an agreement with JB Oxford & Co. (NASDAQ: JBOH) to private-label our PC
Quote 6.0 for Windows. We and JB Oxford released the private-labeled version,
named ORQA, to JB Oxford's customers in February 1999. With the addition of
ORQA, JB Oxford customers will have instant access to a wider variety of
investment tools, including real-time streaming quotes, intra-day charting,
time and sales and technical analysis. PC Quote will be paid a monthly fee
determined by the number of JB Oxford's clients that subscribe to the
service.
RECENT BUSINESS DEVELOPMENTS - DOUBLECLICK DART. In December, 1998, we
selected DoubleClick's DART technology as our new ad serving solution for our
web site, www.pcquote.com. DART, or Dynamic Advertising Recording and
Targeting, will provide us with drastically increased efficiency in ad
inventory management and the ability to dynamically target advertisements to
visitors to our website.
We believe DoubleClick's DART provides us with the functionality to realize
the full value of every page impression not only on our own web site, but also
on each page we co-brand for partners. New productivity gained through the
implementation of the DART system will allow www.pcquote.com to drastically
increase total web site space available for advertising.
In March 1999 we expanded our relationship with DoubleClick by joining
the DoubleClick Network. DoubleClick has been granted a non-exclusive right
to market a percentage of our www.pcquote.com advertising impression
inventory to its clients. DoubleClick's clients, advertising sponsors, will
have the ability to access our valuable audience that visits our popular web
site. In turn, we will gain access to a broader advertising base and one that
can essentially "test the waters" before making a targeted run on our site.
We will receive revenue from the advertising impressions sold by DoubleClick.
9
<PAGE>
ABOUT PC QUOTE
GENERAL DEVELOPMENT OF BUSINESS
PC Quote, Inc. was incorporated in the State of Illinois on June 23,
1980 as On-Line Response, Inc. and was incorporated in Delaware on August 12,
1987. We are a premier provider of securities market data. We collect
securities market activity and financial news directly from stock, options
and commodities exchanges and other sources. We use the information to create
a real-time database of last sale, bid/ask and historical prices of more than
325,000 issues. The database includes all North American equities, the most
comprehensive options data, major stock indices, Level 1 NASDAQ-quoted
stocks, Level 2 NASDAQ market-maker quotes, mutual funds, money market funds,
futures contracts and options on futures contracts. We process the database
into a single digital data-feed, "HyperFeed-TM-", at our primary
processing plant located at our executive offices in Chicago, Illinois. We
disseminate HyperFeed to our customers by satellite, digital data landlines
and over the Internet.
Software applications on our customers' computers access HyperFeed to
allow the user to monitor securities activity on an on-going real-time basis.
The applications also create a complete database of trading symbols,
continuously updated by the data feed. This database gives our customer
instant access to security prices. HyperFeed is used to create an equivalent
database on our computers, accessible to our Internet customers.
We derive our revenue from license fees charged for access to HyperFeed
and from license fees charged for a packaged HyperFeed plus analytical
software service. Our customer base consists primarily of professional
investors, securities brokers, dealers and traders, portfolio managers,
brokerage firms, other financial institutions, Internet web-sites,
application developers and redistributors of financial market data. Our
Internet service is utilized by individual and professional investors alike.
Our Internet division, PCQuote.com, sells advertising space on our web-site,
www.pcquote.com, in addition to subscriptions for delayed and real-time
market data. Its principal customers are financial web-site advertisers, other
internet web-sites, individuals, and businesses. Our customers are located
primarily in the United States and North America.
The following is a description of the principal services that we provide.
HYPERFEED-TM-
HyperFeed, the cornerstone of the services provided by PC Quote, is our
digital real-time market data feed. We use multiple redundant, high-speed
data circuits to gather information from securities exchanges and other
sources. At our production center in Chicago, these feeds are directed into
multiple real-time databases from which HyperFeed is generated. Data is
broadcast to our customers over dedicated digital data circuits at 1024
kilobytes per second and by satellite at 112 kilobytes per second. HyperFeed
contains all North American stock, options, and commodity exchange issues
including:
- Dynamic Nasdaq Level II market maker quotes;
- Dow Jones Composite News Service (up to 90-day retrieval of nine
wires "Broadtape", Professional Investor Report, Capital Markets
Report, International News Wire, World Equities Report, European
Corporate Report, Electronic Wall Street Journal, International
Petroleum Reports, Federal Filings); and
- Multiple levels of fundamental data.
HyperFeed underlies all of our other services, which capitalize on
HyperFeed to access, view and utilize data in a variety of ways.
An industry standard PC at our customer's site receives HyperFeed data
and creates real-time databases of securities activity, financial news and
fundamental information. Software applications supplied by us, by third
parties, or by our customer utilize our high-performance application program
interfaces, or APIs, to access the data. The data can then be used for
virtually any purpose, including third-party order execution systems,
analytical modeling, internal risk management, order matching or
redistribution via the Internet or wide area networks. Our customers pay
monthly HyperFeed licensing fees and per-user or per-unit charges.
We also provide access to HyperFeed via the Internet. Our Internet
services, like our satellite and landline services, support applications
developed by us, by third parties or by our customers, using Internet-enabled
versions of our APIs. We, and our customers, are able to benefit from the
Internet's substantially lower costs for service and communications, its ease
of access and its worldwide availability.
To complement the HyperFeed database, we have high-end applications and
programming tools that we license to HyperFeed subscribers.
10
<PAGE>
PC Quote 6.0 for Windows is a comprehensive suite of real-time
professional securities trading tools. Running under Microsoft-TM-
Windows-TM- 3.1 or Windows-TM- 95, or Windows NT-TM-, PC
Quote 6.0 offers unlimited quote pages, charting, technical analysis,
searchable news, time of sale and quote, Nasdaq Level II market maker
screens, options analytical tools, dynamic data exchange into
Microsoft-TM- Excel-TM-, tickers, alerts, baskets and more. PC
Quote 6.0 for Windows is available with our satellite, landline, and Internet
services.
Our "Quote Tools" are custom applications using robust and easy-to-use
APIs. The Quote Tools enable a customer to build anything from real-time
trading desktop interfaces to web-sites with portfolio management and the
latest in Internet push technology.
In 1995 we established an Internet web-site, www.pcquote.com, offering
free delayed quotes and other information to all visitors. We generate
revenue by selling advertising on our web-site's free quote pages, selling
subscriptions to real-time quote information, providing market information
for other web-sites, and offering development tools for Internet-based
applications. Our web-site also offers corporate profiles, financial news and
press releases, and information about our services.
PC Quote's Internet Business Services provide custom and template web-site
services and software development services to software vendors, financial
institutions, corporations, and Internet content providers. All of our
Internet services, including the web site, advertising, PC Quote 6.0 on the
Internet, and Quote Tools, can be wholesaled, private labeled, cloned or
customized to meet a customer's specific needs.
We are a quote service for the major office applications companies. In
Microsoft Excel's 1997 version Web Query technology features the ability
to access our data. In February 1997 Lotus Development Corporation also
featured PC Quote's data as the "in-the-box" feature for its SmartSuite
application.
PATENTS, TRADEMARKS AND LICENSES
We do not have patent protection for our proprietary software products.
Although applicable software is readily duplicated illegally by anyone having
access to appropriate hardware, we attempt to protect our proprietary software
through license agreements with customers and common law trade secret
protection and non-disclosure contract provisions in our agreements with our
employees. We use security measures, including a hardware key, which restricts
access to our on-line services unless proper password identification from a
PC Quote user is provided. As an additional safeguard, we provide only the
object code on our diskette and retain the source code.
HyperFeed-TM- is a servicemark of PC Quote.
COMPETITION
The market for the on-line provision of financial information such as
equities, commodities, futures and options quotations and news through services
and software applications similar to those PC Quote provides includes a large
number of competitors and is subject to rapid change. We believe our primary
competitors include Bridge Information Systems, Bloomberg, the Comstock unit of
Standard & Poors, the ILX unit of Thomson Corporation, Reuters, Quote.com and
Data Broadcasting Corporation. Many of these competitors have significantly
greater financial, technical and marketing resources and greater name
recognition than we do.
11
<PAGE>
YEAR 2000 ISSUES
This section contains historical information, as well as forward-looking
statements regarding our expectations with respect to:
- our plans and objectives for assessment and remediation of Year 2000
issues;
- the expected costs associated with assessment, remediation and
testing;
- our contingency plans;
- our expectations with respect to our operations at Year 2000.
You can generally identify forward looking-statements by the use of
words like "may," "will," "expect," "intend," "estimate," "anticipate,"
"believe," or "continue," or similar language. We base our statements on our
current expectations. Forward-looking statements are subject to or may be
impacted by a number of factors, risks and uncertainties that could cause
actual results to differ materially from those described in the forward-
looking statements. Give careful consideration to the cautionary statements
made in this section.
A. OVERVIEW. We do not have or use mainframe computers in our internal
operations. Consequently, we do not have the extent of Y2K issues that many
other companies have that depend on what is known as "legacy" systems. We use
PC's and "server class" computers in our operations. Our end-user applications
also run on the same type of hardware. These systems still may have Y2K
issues. We have implemented a plan to attempt to assess, remediate, and
correct any Year 2000 critical issues. A "Year 2000" problem will occur
where date-sensitive software uses two digit year date fields, sorting the
year 2000 ("00") before the year 1999 ("99"). The Year 2000 problem may result
in data corruption and processing errors occurring where software, technology
equipment, or any other equipment or process uses date dependent software.
Our plan has been structured to address the following areas:
- Processing Plant and Communications Network;
- PC Quote Retail Applications; and
- Operational Infrastructure
B. STATE OF READINESS. We have approached each of the above areas in four
phases:
1. Assessment;
2. Remediation;
3. Testing; and
4. Contingency planning.
PC Quote is preparing to participate in the full "end-to-end" Year 2000
scenario test sponsored by the Financial Information Forum in conjunction
with the Securities Industry Association. This is an industry-wide test to
provide securities, options and futures exchanges and market data providers
with the ability to test their systems under simulated Year 2000 conditions.
Time will essentially be moved forward into the Year 2000. We are in
preliminary testing that uses test data from participating exchanges to
identify non-compliant components that will need to be replaced prior to
the full test. This full "end-to-end" test, from the exchanges through market
data vendors to the end-user software application, is scheduled for May 1,
1999.
"Assessment" summarizes the process of issue identification. "Remediation"
refers to the process of taking corrective action to best mitigate identified
Year 2000 risks. "Testing" is the process of validating one of our specific
remediation efforts or confirming a third party's capability or certification of
Year 2000 compliance. "Contingency planning" means the process by which we
identify an alternate course of action and/or procedures in the event we cannot
or fail to remediate or mitigate a known Year 2000 risk. We may or may not
engage in Contingency Planning for individual subproject components where
successful Year 2000 remediation has been validated through the testing process
or other methods.
PROCESSING PLANT AND COMMUNICATIONS NETWORK
The Assessment phase has been completed. A full inventory has been taken
of the processing plant, our datafeed input, consolidation and output process,
and communications areas. We are currently in the Remediation and Testing
phases. This includes checking with outside vendors and suppliers and testing
all mission critical items. Testing also includes all PC's, routers, modems,
phone lines, Internet service providers, known as ISPs, and production
computers, known as servers, used internally in the communications room. We
are also checking our outbound satellite, phone circuit and our ISPs'
distribution network, in addition to some ISPs that our customers may use.
The processing plant and communications network percentages completed
as of 3/1/99 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
AREAS EQUIPMENT/SYSTEMS COMPLIANT
Processing plant 301 164
Communications 35 14
</TABLE>
12
<PAGE>
PC QUOTE RETAIL APPLICATIONS
Our retail applications include our proprietary and 3rd party software
applications, licensed to our customers for use only with our datafeed. These
applications include Internet web-site and browser-based applications, local
area network based applications, and Windows NT client/server applications. One
OS/2 based application will become obsolete in 2000. Customers using this
application will be converted to a compliant application.
<TABLE>
<CAPTION>
<S> <C> <C>
APPLICATIONS COMPLIANT
PC Quote Customer 14 12
Applications
3rd Party Customer 5 3
Applications
</TABLE>
OPERATIONAL INFRASTRUCTURE
We are checking our main facility and field offices for compliance in the
security systems, HVAC systems, pagers, phone system, utility providers and
other mission critical systems. We have started to upgrade, at minimal cost,
non-compliant equipment.
Based upon currently available information, we believe we will be able to
meet our Y2K compliance goals.
C. COSTS. As part of the ordinary course of our business, we continually
develop major enhancements to our operating systems and applications. For
instance, we spent three years developing the first 100% Windows NT-based ticker
plant that was put into production in 1998. In addition to many other benefits,
it is fully Y2K compliant. In the past, we have not separately tracked the cost
of Y2K remediation, as these efforts were incorporated into our on-going
maintenance and equipment replacement program. We have started to track costs
in 1999 and have spent approximately $27,000 so far this year on the cost of
Year 2000. This includes internal personnel resources, hardware, software and
equipment replacement and upgrades necessary to be Y2K compliant. We will be
upgrading various administrative systems that use commercial third party
software for accounting, billing and customer management. The total remaining
cost of software, replacement equipment, and internal resources for remediation
and testing to become Y2K compliant is not expected to exceed $500,000.
Based upon currently available information, we do not believe that the cost
of Y2K compliance will have a material impact on our financial condition,
results of operations or liquidity.
D. RISKS. Achieving Y2K compliance depends on many factors. Some factors may
be beyond our control, because we use services of others. Should our internal
systems or the internal system of one of our critical vendors fail to achieve
Y2K compliance and fail in the year 2000, our business and results of operations
could be adversely affected. The following are examples of how we might be
adversely affected by Y2K non-compliance:
- A piece of communications equipment has an internal clock that is not
Y2K compliant. Although end-to-end testing is done, for some reason we or
our vendor fail to detect the non-compliance. Y2K comes and the clock
shuts down, causing an inability to transmit over that channel. Our
customers on that channel do not receive our service. We or our vendor
have the cost of finding and fixing the problem. Our customer could make a
claim against us for the lost service. Many of our customers have back-up
systems in place with us which could mitigate any damage caused by the
disruption. In the event that there are claims for damages, our contracts
with our customers limit our liability in such instances. However, if
there were a large number of customers affected for a prolonged period of
time, we could be put in a position of either granting credits or risk
losing the customers and our reputation could be adversely effected.
- We have customers that use our Quote Tools to access our
datafeed for software applications. Quote-Tools is a set of programmer
tools known as application programming interfaces or APIs for short.
Quote-Tools was written and tested to be Y2K compliant. If for some
reason Y2K came and Quote-Tools did not function properly because of the
date change, we would have to spend money and resources to fix the bug.
If the bug could not be fixed, and we had no alternative solution for our
customers using the service, we could lose the customers and related
revenue. Our contracts with our customers generally limit our liability
to total fees paid over the preceding year, which in 1998 was under
$200,000 for Quote-Tools' customers.
E. CONTINGENCY PLANS. All Testing, including internal infrastructure, is
scheduled to be completed by 6/30/99. We have not started extensive contingency
planning because we are concentrating our efforts on remediation and testing.
We believe effective contingency planning should not begin until after these
phases are complete. We expect to begin comprehensive contingency planning at
the start of the third quarter of 1999.
SEASONALITY
We have not experienced any material seasonal fluctuations in our business.
Barring any prolonged period of investor inactivity in trading securities, we do
not believe that seasonality is material to our business activities.
13
<PAGE>
RESEARCH AND DEVELOPMENT
Our systems development personnel expend their time and effort
developing new software programs and high-speed data delivery systems and
expanding or enhancing existing ones. Development efforts focus on providing
a solution to the informational and analytical needs of both the professional
and private investors. Development activity has increased with the
implementation of high-level design and prototyping tools. Our continuing
investment in software development consists primarily of:
- enhancements to our existing Windows-based private network and Internet
products and services;
- development of new data analysis software and programmer tools; and
- application of new technology to increase the data volume and delivery
speed of our distribution system and network.
ENVIRONMENT
Compliance with federal, state, and local provisions with respect to the
environment has not had a material adverse effect on our capital expenditures,
earnings, or competitive position.
EMPLOYEES
As of December 31, 1998, we employed 119 people, none of whom are
represented by a collective bargaining unit. We believe we have a satisfactory
relationship with our employees. From time to time we retain the services of
outside consultants on an hourly basis.
GOVERNMENT CONTRACTS
We have no material contracts with the Government.
BACKLOGS
Due to the nature of the business, backlogs are not a typical occurrence in
the industry.
MAJOR CUSTOMERS
We did not have any customers that accounted for 10% or more of total
revenue in either 1998 or 1997.
On January 1, 1997, we terminated an agreement with Global Financial
Services, formerly Bridge Information Systems. For the fiscal year ended
December 31, 1996, Global accounted for revenue approximating $3,414,000. In
December 1996, we discontinued providing services to Charles Schwab and
Company, that accounted for revenue approximating $1,693,000 for the fiscal
year ended December 31, 1996.
14
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information may include documents filed after the date of this
prospectus which update and supersede the information you read in this
prospectus. We incorporate by reference the documents listed below, except to
the extent information in those documents is different from the information
contained in this prospectus, and all future documents filed with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until we terminate the
offering of these shares.
The following documents of PC Quote which have been filed with the SEC are
hereby incorporated by reference in this prospectus:
<TABLE>
<CAPTION>
SEC Filing Period / Filing Date
---------- --------------------
<S> <C>
Annual Report on Form 10-K Year ended December 31, 1998
Current Report on Form 8-K Filed October 6, 1998
Filed January 12, 1999
</TABLE>
You may request a copy of these documents, at no cost, by writing to:
PC Quote, Inc.
300 South Wacker Drive, Suite 300
Chicago, Illinois 60606
Attention: John E. Juska
Telephone: (312) 913-2800.
FORWARD-LOOKING INFORMATION
Statements made in this prospectus or in the documents incorporated by reference
herein that are not statements of historical fact are forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act. A number of risks and uncertainties, including those discussed
under the caption "Risk Factors" above and the documents incorporated by
reference herein could affect such forward-looking statements and could cause
actual results to differ materially from the statements made.
15
<PAGE>
USE OF PROCEEDS
All 118,000 shares of common stock are being sold by the selling
stockholders for their own account. We will not receive any of the proceeds
from the sale of any shares. We have agreed to pay the expenses of
registration of the common stock, including a certain amount of legal and
accounting fees. See "Plan of Distribution."
PRICE RANGE OF COMMON STOCK
Our shares of common stock are traded on the American Stock Exchange
under the symbol "PQT." The following tables show for 1999, 1998 and 1997,
the high and low sales prices of our common stock for the periods
indicated, as reported by the American Stock Exchange.
<TABLE>
<CAPTION>
1999 QUARTERLY INFORMATION HIGH LOW
- -------------------------- ---- ---
<S> <C> <C>
First (through March 30, 1999) 11-7/8 1-7/8
<CAPTION>
1998 QUARTERLY INFORMATION HIGH LOW
- -------------------------- ---- ---
<S> <C> <C>
First 1-1/8 11/16
Second 4-15/16 11/16
Third 3-1/4 7/8
Fourth 3-3/4 1
<CAPTION>
1997 QUARTERLY INFORMATION HIGH LOW
- -------------------------- ---- ---
<S> <C> <C>
First 3-11/16 2-1/4
Second 2-1/2 1-1/8
Third 2-9/16 1-1/2
Fourth 2-1/4 7/8
</TABLE>
The closing market price for our common stock as reported by the American
Stock Exchange on March 30, 1999 was $9.4375
As of February 28, 1999, we had 459 stockholders of record.
16
<PAGE>
DIVIDEND POLICY
We have not paid dividends on our common stock and do not currently plan
to do so in the near future. In December 1998, we issued preferred stock that
has a dividend rate of 5%. Preferred dividends are payable quarterly if, and
when, we declare a dividend payment. We have not, and currently do not plan
in the near future, to declare any preferred dividend payments. Preferred
dividends are cumulative and the entire accumulated dividend must be paid
prior to the payment of any dividends to common stockholders. The
accumulating dividend on preferred shares outstanding as of February 28, 1999
is $84,461 per quarter.
SELLING STOCKHOLDERS
The following table sets forth the number of shares owned by Wildman,
Harrold, Allen & Dixon, legal counsel to PC Quote, and High Ridge Partners.
We issued them shares of our common stock in separate private placements as
payment for services that were provided to us. We believe that the fair value
of the shares, as of the date they were issued, was approximately the fair
value of the services we received.
No estimate can be given as to the amount of shares that will be held by
such selling stockholders after completion of this offering because they may
offer all or some of the shares and because there currently are no
agreements, arrangements or understandings with respect to the sale of any of
the shares. The shares offered by this prospectus may be offered from time to
time by the selling stockholders named below.
<TABLE>
<CAPTION>
Name and Address of Number of Shares Owned Number of Shares
Selling Stockholder Prior to the Offering Registered for Sale(1)
------------------- --------------------- ----------------------
<S> <C> <C>
Wildman, Harrold, Allen & Dixon 100,000 100,000
225 W. Wacker Drive, Suite 3000
Chicago, Illinois 60610
High Ridge Partners 18,000 18,000
140 S. Dearborn St., Suite 320
Chicago, Illinois 60603
------- -------
Totals 118,000 118,000
</TABLE>
(1) This registration statement also shall cover any additional shares of
common stock which become issuable in connection with any stock divided,
stock split, recapitalization or other similar transaction effected without
the receipt of consideration which results in an increase in the number of PC
Quote's outstanding shares of common stock.
PLAN OF DISTRIBUTION
Wildman, Harrold, Allen & Dixon and High Ridge Partners have indicated
they are acting independently from us in determining the manner and extent of
sales of the shares of our common stock.
17
<PAGE>
Although all of the shares are being registered for public sale, the sale
of any or all of such shares by the selling stockholders may depend on the sale
price of such shares and market conditions generally prevailing at the time. The
selling stockholders reserve the right to reject any order in whole or in part.
The selling stockholders have advised us that:
- the shares may be sold by the selling stockholders or their
respective pledgees, donees, transferees or successors in
interest, on the American Stock Exchange, in sales occurring in
the public market, in privately negotiated transactions, through
the writing of options on shares, short sales or in a combination
of such transactions;
- each sale may be made either at market prices prevailing at the
time of such sale or at negotiated prices;
- some or all of the shares may be sold through brokers acting on
behalf of the selling stockholders or to dealers for resale by
such dealers; and
- in connection with such sales, such brokers and dealers may
receive compensation in the form of discounts and commissions from
the selling stockholders and may receive commissions from the
purchasers of shares for whom they act as broker or agent (which
discounts and commissions may be less than or exceed those
customary in the types of transactions involved). Any broker or
dealer participating in any such sale may be deemed to be an
"underwriter" within the meaning of the Securities Act and will be
required to deliver a copy of this prospectus to any person who
purchases any common stock from or through such broker or dealer.
We have been advised that, as of the date hereof, none of the
selling stockholders have made any arrangements with any broker
for the sale of their common stock.
In offering the common stock covered by this prospectus, the selling
stockholders and any broker-dealers and any other participating broker-
dealers who execute sales for the selling stockholders could be deemed
to be "underwriters" within the meaning of the Securities Act in connection
with such sales, and any profits realized by the selling stockholders and the
compensation of such broker-dealer may be deemed to be underwriting discounts
and commissions. In addition, any common stock covered by this prospectus
which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather
than pursuant to this prospectus.
In order to comply with certain states' securities laws, if applicable,
the shares of common stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states, the shares of
common stock may not be sold unless they have been registered or qualified
for sale in such state or an exemption from registration or qualification is
available and is complied with.
18
<PAGE>
The selling stockholders have agreed to indemnify and hold us and our
officers and directors harmless, with respect to any untrue statement in, or
omission from, this prospectus or the registration statement of which it is a
part, including amendments and supplements, if such statement or omission was
made in reliance upon information furnished to us by such selling stockholder
for use in the preparation of this prospectus or registration statement.
We will not pay selling or other expenses incurred in the offering,
including the discounts and commissions of broker-dealers. We have agreed to
indemnify the selling stockholders against certain civil liabilities,
including liabilities under the Securities Act, in connection with the shares
described in this prospectus.
EXPERTS
The financial statements and schedule of valuation and qualifying
accounts of PC Quote included in its Annual Report on Form 10-K, for the years
ended December 31, 1998 and 1997, incorporated by reference in this prospectus
and elsewhere in the registration statement, have been audited by KPMG LLP,
independent public accountants, as indicated in their reports with respect
thereto. Such financial statements and schedule are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing. The report of KPMG LLP covering the
December 31, 1998 and 1997, financial statements contains an explanatory
paragraph that states that PC Quote has experienced significant operating
losses, which have adversely affected its current results of operations and
liquidity. These conditions raise substantial doubt about PC Quote's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
The statements of operations, stockholders' equity and cash flows and
schedule of valuation and qualifying accounts of PC Quote for the year ended
December 31, 1996, included in PC Quote's Annual Report on Form 10-K, for the
year ended December 31, 1998, incorporated by reference in this prospectus
and elsewhere in the Registration Statement, have been audited by McGladrey
and Pullen, LLP, independent public accountants, as indicated in their
report with respect thereto. Such financial statements and schedule are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing. The report of
McGladrey and Pullen, LLP contains an explanatory paragraph that states that
PC
19
<PAGE>
Quote has experienced significant operating losses, which have adversely
affected its current results of operations and liquidity. These conditions raise
substantial doubt about PC Quote's ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
LEGAL MATTERS
The validity of the shares described in this prospectus has been
verified for PC Quote by Wildman, Harrold, Allen & Dixon, 225 West Wacker
Drive, Suite 2800, Chicago, Illinois 60606-1229. Such firm is a selling
shareholder of up to 100,000 shares of common stock as discussed in this
prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the SEC. You may read and copy any document we file at the SEC's
public reference room at Judiciary Plaza Building, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the public reference room. The SEC maintains an Internet site at
http://www.sec.gov where certain information regarding issuers, including PC
Quote, may be found. This prospectus is part of a registration statement that we
filed with the SEC, registration no. 333-68141. The registration statement
contains more information than this prospectus regarding PC Quote and its
common stock, including certain exhibits and schedules. You can get a copy of
the registration statement from the SEC at the address listed above or from
its Internet site. In addition, our common stock is listed on the American
Stock Exchange, and reports, proxy statements and other information
concerning our company can also be inspected at the offices of the American
Stock Exchange, 86 Trinity Place, New York, New York 10006.
20
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Risk Factors............................................................. 4
Recent Developments...................................................... 9
About PC Quote........................................................... 10
Documents Incorporated by Reference...................................... 15
Forward-Looking Information.............................................. 15
Use of Proceeds.......................................................... 16
Price Range of Common Stock.............................................. 16
Dividend Policy.......................................................... 17
Selling Shareholders..................................................... 17
Plan of Distribution..................................................... 17
Experts.................................................................. 19
Legal Matters............................................................ 20
Where You Can Find More Information...................................... 20
</TABLE>
21
<PAGE>
PC QUOTE, INC.
118,000 SHARES OF COMMON STOCK
-------------
PROSPECTUS
-------------
April __, 1999
22
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee................... $ 59
Accounting Fees and Expense............ $ 20,000
Legal Fees and Expenses................ $ 23,000
Miscellaneous.......................... $ 10,000
----------
Total.................................. $ 53,059
</TABLE>
All fees and expenses other than the SEC registration fee are estimated.
The expenses listed above will be paid by PC Quote.
Item 15. Indemnification of Officers and Directors
Section 145(a) of the General Corporation Law of Delaware (the "DGCL")
empowers a corporation 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 he is or was a director, employee or agent of the corporation or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or 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 cause to believe his conduct was unlawful.
Subsection 145(b) of the DGCL empowers a corporation 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 such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under similar standards, except that no
indemnification may be made in respect to 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 that despite the adjudication of liability
such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a)
23
<PAGE>
and (b) or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith, and that indemnification provided for
by Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled. It empowers the corporation to purchase and
maintain insurance on behalf of a director or officer of the corporation against
any liability asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
PC Quote's certification of incorporation provides that to the fullest
extent permitted by Delaware law, it shall indemnify and advance
indemnification expenses to all of its directors and officers. In addition, the
certificate incorporation provides that to the fullest extent permitted by
Delaware law, a director shall not be liable to PC Quote or its stockholders
for breach of fiduciary duty as a director.
PC Quote has entered into indemnification agreements with each director
providing for indemnification to the fullest extent permitted by Delaware law.
Item 16. List of Exhibits
5 Opinion of Wildman, Harrold, Allen & Dixon regarding legality of
the Shares
23.1 Consent of KPMG LLP
23.2 Consent of McGladrey & Pullen, LLP
23.3 Consent of Wildman, Harrold, Allen & Dixon (included in
Exhibit 5)
24 Power of Attorney
Item 17. 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 to such information 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 end of the
24
<PAGE>
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) under
the Securities Act if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change in the information set forth in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of PC
Quote 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, PC Quote 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.
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PC Quote
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 Pre-Effective
Amendment No. 2 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Chicago, Illinois on April 1, 1999.
PC QUOTE, INC.
By /s/ JIM R. PORTER
--------------------
Jim R. Porter
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on April 1, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
By: /s/ JIM R. PORTER Chairman of the Board and
------------------------- Chief Executive Officer
Jim R. Porter
By: /s/ JOHN E. JUSKA Chief Financial Officer and
------------------------- Principal Accounting Officer
John E. Juska
By: * Director
-------------------------
John R. Hart
By: * Director
-------------------------
Timothy K. Krauskopf
By: * Director
-------------------------
Ronald Langley
By: Director
-------------------------
Louis J. Morgan
*By: /s/ JOHN E. JUSKA Chief Financial Officer and
------------------------- Principal Accounting Officer
John E. Juska
Attorney-in-fact
</TABLE>
26
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
<S> <C>
5 Opinion of Wildman, Harrold, Allen & Dixon
23.1 Consent of KPMG LLP
23.2 Consent of McGladrey & Pullen, LLP
23.3 Consent of Wildman, Harrold, Allen & Dixon
(included in Exhibit 5)
</TABLE>
27
<PAGE>
EXHIBIT 5
[Wildman, Harrold, Allen & Dixon Letterhead]
PC Quote, Inc.
300 South Wacker Drive, Suite 300
Chicago, Illinois 60606
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to PC Quote, Inc., a Delaware corporation (the
"Company"), in connection with a registration statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission relating to the registration under the Securities Act of 1933, as
amended, of 118,000 shares (the "Shares") of common stock, par value $.001 per
share, of the Company. The Shares will be sold from time to time by the selling
shareholders (the "Selling Shareholders") named in the Registration Statement,
on the American Stock Exchange or otherwise, directly or through underwriters,
brokers or dealers.
We have examined such documents and have reviewed such questions of law as
we have considered necessary and appropriate for the purposes of our opinions
set forth below. In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of the Company and of public officials.
Based on the foregoing, we are of the opinion that the Shares to be sold by
the Selling Shareholders pursuant to the Registration Statement have been duly
authorized by all requisite corporate action and are validly issued, fully paid
and nonassessable.
Our opinions expressed above are limited to the laws of the State of
Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the prospectus constituting part of the Registration Statement.
Dated: March 31, 1999 Very truly yours,
/s/ Wildman, Harrold, Allen & Dixon
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
PC Quote, Inc.:
We consent to the use of our reports dated March 12, 1999, included in the PC
Quote, Inc. (the Company) 1998 Annual Report on Form 10-K, incorporated by
reference herein, and to the reference to our firm under the heading "Experts"
in the prospectus.
Our report on the financial statements contains an explanatory paragraph that
states that the Company has experienced significant operating losses which has
adversely affected the Company's current results of operations and liquidity.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements and financial statement schedule do
not include any adjustments that might result from the outcome of that
uncertainty.
/s/ KPMG LLP
Chicago, Illinois
March 31, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to incorporation by reference in the Registration Statement on
Form S-3 of PC Quote, Inc. of our report dated March 7, 1997, which includes
an emphasis paragraph relating to an uncertainty as to the Company's ability
to continue as a going concern, relating to the statements of operations,
stockholders' equity, and cash flows of PC Quote, Inc. for the year ended
December 31, 1996, which report appears in the December 31, 1998, Annual
Report on Form 10-K of PC Quote, Inc. and to the reference of our firm under
the heading "Experts" in the Registration Statement.
/s/ McGladrey & Pullen, LLP
March 31, 1999
Schaumburg, Illinois
