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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HYPERFEED TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6200 36-3131704
(State or other jurisdiction (Primary Standard (I.R.S Employer Identification No.)
of Industrial
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
HYPERFEED TECHNOLOGIES, 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.
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. / /
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock......................... 190,476 $5.47(1) $1,041,904(1) $290
</TABLE>
(1) Estimated solely for purposes of computing the registration fee in
accordance with Rule 457 of the Securities Act of 1933 and based upon the
average of the high and low sales prices for HyperFeed Technologies common
stock on October 20, 1999, a date within five (5) days prior to the date of
initial filing of this registration statement, as reported on the Nasdaq
National Market.
HyperFeed Technologies 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.
If, as a result of stock splits, stock dividends or similar transactions, or
by reason of changes in the conversion price of the preferred stock, the number
of securities purported to be registered on this registration statement
increases, the provisions of Rule 416 shall apply, and this registration
statement shall be deemed to cover any such additional shares of common stock.
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The information in this prospectus is not complete and may be changed. The
selling security holders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 27, 1999
PROSPECTUS
HYPERFEED TECHNOLOGIES, INC.
190,476 SHARES OF COMMON STOCK
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These shares may be offered and sold from time to time by the security
holders of HyperFeed Technologies identified in this prospectus. The shares that
may be offered and sold in reliance on this prospectus consist of
190,476 shares of common stock, which were issued to four investors in a private
placement for $1,999,998 in cash on April 23, 1999.
The selling security holders will receive all of the proceeds and will pay
all underwriting discounts and selling commissions, if any, from the sale of the
shares.
------------------------
On September 23, 1999, our common stock commenced trading on the Nasdaq
National Market under the symbol "HYPR." Prior to that date, our common stock
was traded on the American Stock Exchange under the symbol "PQT." On
October 20, 1999, the last reported sale price of the common stock on the Nasdaq
National Market was $5.50 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 1 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 security holders
are offering to sell, and seeking offers to buy, shares of HyperFeed
Technologies 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.
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The date of this prospectus is , 1999
<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 $2.84 million for the six months ended June 30,
1999. We may continue to incur operating losses, which could hinder our ability
to operate our current business. As of June 30, 1999, we had an accumulated
deficit of approximately $30.39 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
through an equity financing could be costly to us and dilutive to our
stockholders.
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 indeterminate amount of time,
which would materially affect our revenue and funds for operations. We are in
the final stages 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 46.8% 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
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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 of Trade/Mid America Commodity Exchange;
- Chicago Mercantile Exchange;
- New York Board of Trade;
- 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/CBOE.
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;
- inadequate 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, PCQuote 6.0 RealTick, is licensed by us
from an unaffiliated third party. 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 an initial term ending December 4, 2000 and provides for automatic
one-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, our Chief Executive Officer and
Chairman of our Board of Directors, and Mr. John E. Juska, our 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
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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.
OUR CHIEF EXECUTIVE OFFICER WILL DEVOTE ONLY ONE-HALF OF HIS BUSINESS TIME
TO US, LIMITING HIS AVAILABILITY TO US.
Mr. Porter, our Chief Executive Officer and Chairman of our Board of
Directors, will devote one-half of his business time to our business and the
other half to the business of PCQuote.com. This limitation on Mr. Porter's
availability could impact our ability to expand our operations and develop our
business.
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 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.
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.
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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.
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RECENT DEVELOPMENTS
RECENT BUSINESS DEVELOPMENTS--APPROVAL OF LISTING ON THE NASDAQ NATIONAL MARKET.
On September 16, 1999, we publicly announced that we have received approval
for listing on the Nasdaq National Market. We commenced trading of our common
stock on the Nasdaq National Market on September 23, 1999 under the symbol HYPR.
Concurrent with the listing on the Nasdaq National Market, trading in our common
stock on the American Stock Exchange under the symbol PQT was suspended.
RECENT BUSINESS DEVELOPMENTS--PCQUOTE.COM.
In December 1998, we segregated our Internet related services into a
separate business unit, PCQuote.com, Inc., which was incorporated in March 1999
as a wholly-owned subsidiary. An outgrowth of our financial content web site,
WWW.PCQUOTE.COM, PCQuote.com's objective is to provide real-time financial data,
timely business news and comprehensive research and analytical tools in order to
allow users to make informed investment decisions. 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.
On June 9, 1999, PCQuote.com filed a registration statement with the
Securities and Exchange Commission relating to a proposed initial public
offering of 7,750,000 shares of its common stock, consisting of 5,800,000 shares
to be issued by PCQuote.com and 1,950,000 shares to be sold by us as selling
stockholder.
On August 30, 1999, we formally separated the business of PCQuote.com and
its associated assets and liabilities from our other businesses and operations.
We have entered into a number of agreements with PCQuote.com, effective
March 31, 1999, providing for its separation from us and governing interim and
ongoing relationships between PCQuote.com and us. These agreements include a
Contribution and Separation Agreement, Maintenance Agreement, DataFeed License
Agreement, Services Agreement, Non-Competition Agreement, Registration Rights
Agreement and Tax Indemnification and Allocation Agreement. Under the
Contribution and Separation Agreement, we transferred assets related to our
Internet operations to PCQuote.com and PCQuote.com assumed the liabilities
related to those Internet operations. Under the Services Agreement, we agreed to
perform transitional services for, and provide office space to PCQuote.com for
$213,500 per month through September 1999, $163,500 per month thereafter through
December 1999, $138,500 per month thereafter through March 2000 and $113,500 per
month thereafter through June 30, 2000. Under the Maintenance Agreement,
PCQuote.com will receive software features, upgrades and enhancements to PCQuote
Orbit and will pay us 3% of gross revenues obtained from use or sublicensing of
PCQuote Orbit. Under the Data Feed Agreement, PCQuote.com will be entitled to
use HyperFeed 2000 for a monthly fee based on the number of users and quotes
accessed.
Management believes that formally separating the two entities will permit
the parent and subsidiary to focus on their relative strengths. In management's
opinion, the separation will permit each entity to better (i) attract and retain
key employees by relating compensation to relevant business development, (ii)
enter into strategic relationships with business partners, and (iii) permit each
entity to pursue its own financing avenues.
On October 18, 1999, PCQuote.com announced that it will postpone its initial
public offering of common stock due to market conditions.
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RECENT BUSINESS DEVELOPMENTS--TOWNSEND ANALYTICS.
In connection with the formation and transfer of our Internet business to
our subsidiary, PCQuote.com, on May 28, 1999, we entered into an agreement with
Townsend Analytics, Ltd. to terminate the Software Distributor Agreement dated
December 4, 1995. Pursuant to the terms of the termination agreement, we paid
Townsend Analytics one million dollars. We and PCQuote.com entered into separate
new license agreements with Townsend Analytics for the right to use the LAN and
Internet versions, respectively, of the software application which is marketed
as PCQuote 6.0 RealTick. The new agreements replaced the prior agreement between
Townsend Analytics and us. The initial term of the agreements ends December 4,
2000. Pursuant to the terms of the new agreements, we and PCQuote.com are each
required to pay a minimum royalty to Townsend Analytics of $220,000 per month
and a cumulative minimum royalty of $5,000,000 each over the initial term of the
agreements. Under the terms of our new agreement with Townsend Analytics, we
guarantee the obligation of our subsidiary, PCQuote.com, and receive a credit
towards our minimum commitment obligations to the extent that PCQuote.com's
actual royalty payments exceed its minimum commitments.
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ABOUT HYPERFEED TECHNOLOGIES
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.
In December 1998, we segregated our Internet related services into a separate
business unit, PCQuote.com, Inc., which was incorporated in March 1999 as a
wholly-owned subsidiary. We approved a change of our corporate name to HyperFeed
Technologies, Inc., in April 1999. This name change was approved by our
stockholders at our annual meeting held on June 16, 1999. On June 9, 1999,
PCQuote.com filed a registration statement with the Securities and Exchange
Commission relating to a proposed initial public offering. On October 18, 1999,
PCQuote.com announced that it will postpone its initial public offering due to
market conditions. We plan to sell shares, owned by us, in the offering that
would reduce our ownership of PCQuote.com to 64.5%. We cannot assure you,
however, that PCQuote.com will complete the initial public offering.
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. PCQuote.com licenses
HyperFeed from us for distribution to its customers 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
PCQuote.com's computers, accessible to its 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 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 HyperFeed
Technologies, 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 256 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.
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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.
To complement the HyperFeed database, we have high-end applications and
programming tools that we license to HyperFeed subscribers.
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 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.
PC Quote 6.0 RealTick 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 RealTick 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 RealTick for Windows is available with our satellite and landline
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.
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
HyperFeed Technologies 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 HyperFeed Technologies.
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 HyperFeed Technologies 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 and Data Broadcasting Corporation. Many
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of these competitors have significantly greater financial, technical and
marketing resources and greater name recognition than we do.
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;
- HyperFeed Technologies 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.
"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.
9
<PAGE>
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 in the final stages of the Remediation and Testing
phases. This includes verifying Year 2000 compliance of 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
companies and ISPs' distribution network, in addition to some ISPs that our
customers may use.
The number of our processing plant and communications network equipment and
systems that are Y2K compliant as of October 25, 1999, are as follows:
<TABLE>
<CAPTION>
AREAS EQUIPMENT/SYSTEMS COMPLIANT
- ----- ----------------- ---------
<S> <C> <C>
Processing Plant.................................. 301 301
Communications.................................... 35 34
</TABLE>
On May 1, 1999, we participated in the Year 2000 Market Data Test sponsored
by the Financial Information Forum in conjunction with the Securities Industry
Association, which tested our production Processing Plant and Communications
Network with quotes dated in the future to January 3, 2000. This data was
transmitted to us from all of the major exchanges. We have passed this Y2K test
on our "mission critical" software and hardware. We have finished the upgrades
of all other hardware and software to match the tested components. We have one
remaining internal communications upgrade in process and expect to be completed
by November 30, 1999.
HYPERFEED TECHNOLOGIES RETAIL APPLICATIONS
Our retail applications include our proprietary and third 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.
We have participated in the full "end-to-end" Year 2000 scenario test
sponsored by the Financial Information Forum in conjunction with the Securities
Industry Association. This industry-wide test provided securities, options and
futures exchanges and market data providers with the ability to test their
systems under simulated Year 2000 conditions. Time was essentially moved forward
to January 3, 2000 for that test day. During this test we had a large Y2K team
in-house monitoring all of our major products. This testing was performed on
several different operating systems, data servers, and methods of transmission.
We compared all final data and reported our results to the SIA/FIF, which
informed us that we had passed the test. We have released the Y2K simulated data
to our customers so they may do their own internal testing.
All of our retail applications are Y2K compliant:
<TABLE>
<CAPTION>
APPLICATIONS COMPLIANT
------------ ---------
<S> <C> <C>
HyperFeed Technologies Customer Applications........... 14 14
3rd Party Customer Applications........................ 5 5
</TABLE>
All major end user applications have been tested and are compliant.
OPERATIONAL INFRASTRUCTURE
We have assessed 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 upgraded, at
10
<PAGE>
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, as of October 25, 1999, have spent approximately $124,000 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 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. We have completed approximately 99% of the testing
related to the Processing Plant/Communications Network and Retail Applications.
All Testing, including internal infrastructure, is scheduled to be completed by
November 30, 1999. We have started contingency planning and, as a first step,
have scheduled additional personnel for the Y2K weekend.
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.
11
<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 September 30, 1999, we employed 139 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.
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.
12
<PAGE>
The following documents of HyperFeed Technologies 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
Quarterly Report on Form 10-Q Quarter ended March 31, 1999
Quarter ended June 30, 1999
Current Report on Form 8-K Filed October 6, 1998
Filed January 12, 1999
Filed June 22, 1999
Filed September 22, 1999
</TABLE>
You may request a copy of these documents, at no cost, by writing to:
HyperFeed Technologies, 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.
13
<PAGE>
USE OF PROCEEDS
All of the 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
On September 23, 1999, our common stock commenced trading on the Nasdaq
National Market under the symbol "HYPR." Prior to that date, our common stock
was 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 (through September 22, 1999) and by the Nasdaq National
Market (from September 23, 1999 through October 20, 1999).
<TABLE>
<CAPTION>
HIGH LOW
1999 QUARTERLY INFORMATION ---- ---
<S> <C> <C>
First............................................. 11 7/8 1 7/8
Second............................................ 15 1/2 6 1/2
Third............................................. 11 1/2 4 5/16
Fourth (through October 20, 1999)................. 8 5/16 4 11/16
</TABLE>
<TABLE>
<CAPTION>
HIGH LOW
1998 QUARTERLY INFORMATION ---- ---
<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
</TABLE>
<TABLE>
<CAPTION>
HIGH LOW
1997 QUARTERLY INFORMATION ---- ---
<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 Nasdaq
National Market on October 20, 1999 was $5.50.
As of September 30, 1999, we had 426 common stockholders of record.
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 declared 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 September 30, 1999
is $84,461 per quarter.
14
<PAGE>
SELLING SECURITY HOLDERS
The following table sets forth the names of the selling security holders,
the number of shares of common stock owned beneficially by each selling security
holder as of October 20, 1999 and the number of shares that may be offered
pursuant to this prospectus. This information is based upon information provided
by the selling security holders.
No estimate can be given as to the amount of shares that will be held by the
selling security holders 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 security holders named below.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES SHARES
BENEFICIALLY PERCENT OF REGISTERED
OWNED PRIOR OUTSTANDING FOR
NAME OF SELLING SECURITY HOLDER TO THE OFFERING SHARES(1) SALE(2)
- ------------------------------- ---------------- ----------- ----------
<S> <C> <C> <C>
Longwood Partners, L.P......................... 95,238 0.6% 95,238
Howard Todd Horberg............................ 115,000 0.8% 35,714
Steve Levy..................................... 182,500 1.2% 35,714
Cranshire Capital, LP.......................... 23,810 0.2% 23,810
------- -------
Total........................................ 416,548 2.7% 190,476
</TABLE>
- ------------------------
(1) The percent of the outstanding shares is based upon the number of common
shares outstanding as of October 20, 1999 (15,175,031).
(2) 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 our
outstanding shares of common stock.
PLAN OF DISTRIBUTION
The selling security holders have indicated they are acting independently
from us in determining the manner and extent of sales of the shares of our
common stock.
Although all of the shares are being registered for public sale, the sale of
any or all of such shares by the selling security holders may depend on the sale
price of such shares and market conditions generally prevailing at the time. The
selling security holders 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 Nasdaq
National Market, 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
15
<PAGE>
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.
The selling security holders 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 security
holder 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 security holders against certain civil liabilities,
including liabilities under the Securities Act, in connection with the shares
described in this prospectus.
The shares of common stock described in this prospectus may also be sold by
the selling security holders pursuant to Rule 144 of the Securities Act.
EXPERTS
The financial statements and schedule of valuation and qualifying accounts
of HyperFeed Technologies for the years ended December 31, 1998 and
December 31, 1997, included in its 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 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
HyperFeed Technologies has experienced significant operating losses, which have
adversely affected its current results of operations and liquidity. These
conditions raise substantial doubt about our 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 HyperFeed Technologies for the
year ended December 31, 1996, included in our 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
16
<PAGE>
of such firm as experts in accounting and auditing. The report of McGladrey and
Pullen, LLP contains an explanatory paragraph that states that HyperFeed
Technologies has experienced significant operating losses, which have adversely
affected its current results of operations and liquidity. These conditions raise
substantial doubt about our 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 HyperFeed Technologies by Wildman, Harrold, Allen & Dixon, 225 West Wacker
Drive, Suite 2800, Chicago, Illinois 60606-1229. Wildman, Harrold, Allen & Dixon
owns 83,900 shares of the common stock of HyperFeed Technologies.
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
HyperFeed Technologies, 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
HyperFeed Technologies 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.
17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Risk Factors.......................... 1
Recent Developments................... 5
About HyperFeed Technologies.......... 7
Documents Incorporated By Reference... 12
Forward-Looking Information........... 13
Use Of Proceeds....................... 14
Price Range Of Common Stock........... 14
Dividend Policy....................... 14
Selling Security Holders.............. 15
Plan Of Distribution.................. 15
Experts............................... 16
Legal Matters......................... 17
Where You Can Find More Information... 17
</TABLE>
HYPERFEED
TECHNOLOGIES, INC.
190,476 SHARES OF COMMON STOCK
---------------------
PROSPECTUS
---------------------
, 1999
<PAGE>
- -------------------------------------------
- -------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee............................... $ 290
Accounting Fees and Expense........................ $ 8,000
Legal Fees and Expenses............................ $ 5,000
Miscellaneous...................................... $ 3,000
-------
Total............................................ $16,290
</TABLE>
All fees and expenses other than the SEC registration fee are estimated. The
expenses listed above will be paid by HyperFeed Technologies.
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) 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.
Our 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 of
incorporation provides that to the fullest extent permitted by Delaware law, a
director shall not be liable to HyperFeed Technologies or its stockholders for
breach of fiduciary duty as a director.
II-1
<PAGE>
HyperFeed Technologies has entered into indemnification agreements with each
director providing for indemnification to the fullest extent permitted by
Delaware law.
ITEM 16. LIST OF EXHIBITS
<TABLE>
<S> <C>
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
</TABLE>
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 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
II-2
<PAGE>
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
HyperFeed Technologies 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, HyperFeed Technologies 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, HyperFeed
Technologies 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
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in Chicago, Illinois as of October 26, 1999.
<TABLE>
<S> <C> <C>
HYPERFEED TECHNOLOGIES, INC.
By: /s/ JIM R. PORTER
-----------------------------------------
Jim R. Porter
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated as of October 26, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JIM R. PORTER
------------------------------------------- Chairman of the Board and
Jim R. Porter Chief Executive Officer
/s/ JOHN E. JUSKA
------------------------------------------- Chief Financial Officer
John E. Juska
/s/ JOHN R. HART
------------------------------------------- Director
John R. Hart
/s/ RONALD LANGLEY
------------------------------------------- Director
Ronald Langley
/s/ LOUIS J. MORGAN
------------------------------------------- Director
Louis J. Morgan
/s/ KENNETH J. SLEPICKA
------------------------------------------- Director
Kenneth J. Slepicka
</TABLE>
II-4
<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)
24 Power of Attorney in favor of John E. Juska
</TABLE>
<PAGE>
EXHIBIT 5
[WILDMAN, HARROLD, ALLEN & DIXON LETTERHEAD]
HyperFeed Technologies, 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 HyperFeed Technologies, 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 190,476 shares of common stock, par value $.001, of the
Company (the "Shares").
The Shares will be sold from time to time by the selling security holders
(the "Selling Security Holders") named in the Registration Statement, on the
Nasdaq National Market 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 Security Holders 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: October 25, 1999
Very truly yours,
/s/ WILDMAN, HARROLD, ALLEN & DIXON
<PAGE>
EXHIBIT 23.1
CONSENT OF KPMG LLP
The Board of Directors and Stockholders
HyperFeed Technologies, Inc.:
We consent to the use of our reports dated March 12, 1999, included in the
HyperFeed Technologies, Inc. (formerly 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 registration statement.
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. These 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
October 25, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to incorporation by reference in the Registration Statement on
Form S-3 of HyperFeed Technologies, Inc. (previously known as 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
October 25, 1999
Schaumburg, Illinois
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned directors and officers of HYPERFEED TECHNOLOGIES, INC.
hereby constitute and appoint John E. Juska, their true and lawful
attorney-in-fact and agent, for each of them and in their name, place and stead,
in any and all capacities (including without limitation, as Director and/or
principal Executive Officer, principal Financial Officer, principal Accounting
Officer or any other officer of the Company), to sign and execute a registration
statement on Form S-3 and any amendment or amendments, including post-effective
amendments thereto, for the registration under the Securities Act of 1933, as
amended, of up to 190,476 shares of common stock of HyperFeed
Technologies, Inc. and do hereby grant unto said attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done, and hereby ratifying and confirming all that said
attorney-in-fact and agent may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
25th day of October, 1999.
<TABLE>
<S> <C> <C>
SIGNATURE
- ----------------------------------------------------------
By: /s/ JIM R. PORTER Chairman of the Board and
------------------------------------------- Chief Executive Officer
Jim R. Porter
By: /s/ JOHN R. HART Director
-------------------------------------------
John R. Hart
By: /s/ RONALD LANGLEY Director
-------------------------------------------
Ronald Langley
By: /s/ LOUIS J. MORGAN Director
-------------------------------------------
Louis J. Morgan
By: /s/ KENNETH J. SLEPICKA Director
-------------------------------------------
Kenneth J. Slepicka
</TABLE>
