PROSPECTUS
15,639,172 SHARES OF COMMON STOCK
QUERYOBJECT SYSTEMS CORPORATION
We offered and sold shares of our Series A convertible preferred stock,
Series B convertible preferred stock and warrants to purchase our common stock
in private placements in October and November 1998. We also offered and sold
warrants to purchase shares of our common stock in a private placement in July
1997 and granted an option to purchase shares of our common stock to a
consultant in December 1997. The shares of preferred stock are convertible, and
the warrants and option are exercisable, into an aggregate of 15,639,172 shares
of our common stock. The selling stockholders listed in this prospectus are
offering and selling up to 15,639,172 shares of common stock issuable upon
exercise of the warrants and option and conversion of the preferred stock issued
in such private placements. All proceeds from the sale of the common stock under
this prospectus will go to the selling stockholders. We will not receive any
proceeds from the sale of such common stock. We will, however, receive the
exercise price of the warrants and option at the time their holders may exercise
them.
Our common stock is listed on the Nasdaq SmallCap Market under the
symbol "QUOB" and on the Boston Stock Exchange under the symbol "QOB." The last
reported sale price on the Nasdaq SmallCap Market for our common stock on
February 10, 1999 was $.97 per share.
The selling stockholders may offer and sell their shares of common
stock through public or private transactions on the Nasdaq SmallCap Market or
the Boston Stock Exchange, at prevailing market prices or at privately
negotiated prices. The selling stockholders may engage brokers or dealers who
may receive commissions or discounts from the selling stockholders. Any
broker-dealer acquiring the common stock from the selling stockholders may sell
such securities in its normal market making activities, through other brokers on
a principal or agency basis, in negotiated transactions, to its customers or
through a combination of such methods. See "Plan of Distribution." We will bear
all expenses in connection with the preparation of this prospectus.
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THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING AT PAGE 5.
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Neither the Securities and Exchange Commission nor any State securities
commission has determined whether this prospectus is truthful or complete. They
have not made, nor will they make, any determination as to whether anyone should
buy these securities. Any representation to the contrary is a criminal offense.
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The date of this Prospectus is February 11, 1999.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document we file at the SEC's public reference room
located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You
may obtain further information on the operation of the public reference room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the
public over the Internet at the SEC's web site at http://www.sec.gov. You may
also request copies of such documents, upon payment of a duplicating fee, by
writing to the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Our common
stock is listed on the Nasdaq SmallCap Market and the Boston Stock Exchange and
such reports and other information may also be inspected at the offices of
Nasdaq at 1735 "K" Street, N.W., Washington, D.C. 20006-1500 and the Boston
Stock Exchange at One Boston Place, Boston, Massachusetts 02108.
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION...........................................2
INCORPORATION BY REFERENCE....................................................4
ABOUT THIS PROSPECTUS.........................................................4
RISK FACTORS..................................................................5
Negative Working Capital; Uncertainty Regarding Receipt of Funds From
Private Placements; Need For Additional Funding
Accumulated Deficit; Historical and Projected Future Operating Losses;
Going Concern Qualification in Independent Accountants' Report
Limited Operating History; Lack of Substantial Revenue
Dependence Upon New Products; Uncertain Market Acceptance
Possible Nasdaq Delisting; Potentially Limited Trading Market
Use of Indirect Channel Partners to Increase Sales
Need to Enhance Existing Products, Develop New Products and Adapt to
Rapid Technological Change
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Dependence on Significant Customers
Competition
Dependence Upon Key Personnel; Need to Increase Sales, Marketing,
Development and Technical Personnel
Lack of Proprietary Technology Protection; Risks of Infringement
Potential Fluctuations in Periodic Results
Risk of Product Defects; Product Liability
International Operations
Possible Volatility of Securities Prices
Possible Adverse Market Effect of Shares Eligible for Future Sale
Issuance of Preferred Stock; Anti-Takeover Provisions
No Dividends.
Outstanding Options, Warrants and Convertible Preferred Stock
Forward Looking Statements and Associated Risks
Year 2000 Compliance
THE COMPANY..................................................................13
USE OF PROCEEDS..............................................................14
SELLING STOCKHOLDERS.........................................................14
PLAN OF DISTRIBUTION.........................................................21
LEGAL MATTERS................................................................22
EXPERTS ....................................................................22
ADDITIONAL INFORMATION.......................................................22
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INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be a part of this prospectus and information that we file later
with the SEC will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"):
(1) Our Annual Report on Form 10-KSB for the year ended December
31, 1997;
(2) Our Quarterly Reports on Form 10-QSB for the quarterly periods
ended March 31, 1998, June 30, 1998 and September 30, 1998;
and
(3) Our Application for Registration of our common stock on Form
8-A dated November 7, 1997.
You may request a copy of these filings (excluding the exhibits to such
filings which we have not specifically incorporated by reference in such
filings) at no cost, by writing or telephoning us at the following address:
QueryObject Systems Corporation
60 Charles Lindbergh Boulevard
Uniondale, New York 11553
Attention: Chief Financial Officer
(516) 228-8500
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information provided or incorporated by
reference in this prospectus or any related supplement. We have not authorized
anyone else to provide you with different information. The Selling Stockholders
will not make an offer of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any other date than the date on the front of those
documents.
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RISK FACTORS
The purchase of our common stock involves a high degree of risk. You
should carefully consider the following risk factors and the other information
in this Prospectus before deciding to invest in our common stock.
NEGATIVE WORKING CAPITAL; NEED FOR ADDITIONAL FUNDING
At September 30, 1998, we had negative working capital of $1,743,864.
We have had a limited operating history as a software product company, have not
made significant sales of our products and our revenues are difficult to
predict.
We sold securities in private placements in October and November 1998
so that we could continue operations. In the private placements, we received
conditional commitments to purchase $4,500,000 of units consisting of
convertible preferred stock and warrants to purchase common stock, of which
payment for all of the units had been made as of February 1999. We received net
proceeds of $4,121,000 from such private placements. However, given our
continued operating losses, we will need additional financing to continue
operations. Our current projections indicate that if our forecasts are achieved,
we will have enough cash to continue operations until June 1999. As of the date
of this Prospectus, we have no commitments, agreements or understandings
regarding additional financings and we may be unable to obtain additional
financing.
ACCUMULATED DEFICIT; HISTORICAL AND PROJECTED FUTURE OPERATING LOSSES; GOING
CONCERN QUALIFICATION IN INDEPENDENT ACCOUNTANTS' REPORT
At September 30, 1998, our accumulated deficit was $31,971,100. For the
fiscal years ended December 31, 1996 and 1997, and for the nine months ended
September 30, 1998, we incurred net losses of $4,917,953, $10,563,484 and
$6,104,114, respectively. We have incurred a net loss in each year of our
existence, and have financed our operations primarily through sales of equity
and debt securities. Our expense levels are high and our revenues are difficult
to predict. The independent accountants' report on our financial statements for
the year ended December 31, 1997 states that our recurring losses from
operations and negative cash flow from operating activities raise substantial
doubt about our ability to continue as a going concern. We expect that the
independent accountants' report on our financial statements for the year ended
December 31, 1998 will contain the same qualification.
We expect to incur net losses for the foreseeable future. We may never
achieve or sustain significant revenues or profitability on a quarterly or
annual basis in the future. Our future operating results will depend on many
factors, including:
o product demand
o product and price competition in our industry
o our success in expanding our direct sales force and
establishing indirect channel partners
o our ability to develop and market products and control costs
o the percentage of our revenues that is derived from indirect
channel partners
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LIMITED OPERATING HISTORY; LACK OF SUBSTANTIAL REVENUE
We have a limited operating history as a software product company and
have made only limited sales of our products. Our total revenues for the year
ended December 31, 1997 and for the nine months ended September 30, 1998 were
$1,012,159 and $398,590, respectively. Prior to 1997, our revenues were derived
primarily from contract data analysis services, which we no longer provide.
DEPENDENCE UPON NEW PRODUCTS; UNCERTAIN MARKET ACCEPTANCE
Substantially all of our revenues for the foreseeable future are
expected to be derived from sales of QueryObject System. Between January 1, 1995
and September 30, 1998, we had software product revenue from only 12 QueryObject
System installations (including those sold pursuant to reseller agreements for
their own internal use), one of which (sold in 1995) was a pre-production beta
version. We only recently commenced an integrated marketing effort for our
products. Our future financial performance will depend upon the successful
introduction and customer acceptance of QueryObject System and the development
of new and enhanced versions of the product. If we fail to achieve broad market
acceptance of QueryObject System, it would materially adversely affect our
business, operating results and financial condition.
POSSIBLE NASDAQ DELISTING; POTENTIALLY LIMITED TRADING MARKET
Our common stock is listed on the Nasdaq SmallCap Market and the Boston
Stock Exchange. To remain eligible for listing on the Nasdaq SmallCap Market we
must comply with the following:
o our common stock must have a minimum bid price of $1.00;
o we must have minimum tangible net assets of $2,000,000 or a
market capitalization of $35,000,000 or net income of $500,000
in two of the three prior years; and
o we must have a public float of at least 500,000 shares with a
market value of at least $1,000,000; at least 300 stockholders
must hold our common stock; and at least two market makers
must make a market in it.
Nasdaq has notified us that our common stock will be delisted. We have
requested a hearing to appeal the delisting. The hearing will be held on
February 19, 1999. Our common stock will continue to be listed on Nasdaq at
least until the date of the hearing. We are unable to predict the outcome of the
hearing, but based on our review of the delisting notice, we believe that,
absent additional financing, our common stock will be delisted and that our
common stock may be delisted even if we obtain additional financing.
The Nasdaq notification is based in part on reservations that Nasdaq
has about our ability to regain and sustain compliance with its net tangible
asset requirements. As of September 30, 1998, we had a deficiency of $1,456,798
in net tangible assets. Subsequent to September 30, 1998, we received net
proceeds of $4,121,000 from the October and November 1998 private placements.
Due to actual and anticipated losses subsequent to September 30, 1998, however,
we do not expect to be able to maintain for any sustained period at least
$2,000,000 in net tangible assets. We would be required to enter into a
transaction or transactions to raise additional equity capital to maintain at
least $2,000,000 in net tangible assets. Such additional financing may be
unavailable to us on acceptable terms or at all.
Nasdaq has also advised us that the October and November 1998 private
placements did not receive the requisite approval of the Company's stockholders.
While our stockholders approved a proposal in August 1998 whereby we could issue
an unlimited amount of common stock (and securities exercisable for such common
stock) in a private placement, the purchasers in the October and November 1998
private placements required that we issue
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preferred stock, which issuance was not approved by our stockholders. Nasdaq
also believes that the issuance of the common stock underlying the preferred
stock was not specifically approved by our stockholders. Moreover, Nasdaq
believes that our stockholders lacked sufficient information to determine the
effect that the October and November 1998 private placements could have on their
voting rights and investment in the Company. Accordingly, our common stock could
be delisted from Nasdaq even if we are able to satisfy the net tangible asset
requirement.
If our common stock is delisted from Nasdaq, trading, if any, therein
would thereafter be conducted on the OTC Bulletin Board and the Boston Stock
Exchange. The Boston Stock Exchange will delist our common stock if we have less
than $500,000 in net tangible assets. We will not be able to maintain at least
$500,000 in net tangible assets without additional financing or revenues. If our
common stock is delisted from Nasdaq and the Boston Stock Exchange, the common
stock could be considered a penny stock. SEC regulations generally define a
penny stock to be an equity security that is not listed on Nasdaq or a national
securities exchange and that has a market price of less than $5.00 per share,
subject to certain exceptions. The regulations of the SEC would require
broker-dealers to deliver to a purchaser of common stock a disclosure schedule
explaining the penny stock market and the risks associated with it. Various
sales practice requirements are also imposed on broker-dealers who sell penny
stocks to persons other than established customers and accredited investors
(generally institutions). In addition, broker-dealers must provide the customer
with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. If the common stock is traded on the OTC Bulletin Board and becomes
subject to the regulations applicable to penny stocks, investors may find it
more difficult to obtain timely and accurate quotes and execute trades in the
common stock.
USE OF INDIRECT CHANNEL PARTNERS TO INCREASE SALES
As part of our sales and marketing efforts we are seeking to develop
strategic relationships with indirect channel partners, such as original
equipment manufacturers and value-added resellers, to increase the number of our
customers. We currently are investing, and intend to continue to invest,
significant resources to develop indirect channel partners. Our results of
operations will be adversely affected if we are unable to attract indirect
channel partners to market our products effectively and provide timely and cost
effective customer support and service. If we successfully sell products through
these sales channels, the lower unit prices we expect to receive for such sales
will result in our gross margins being lower than if we had sold those products
through our direct sales force.
NEED TO ENHANCE EXISTING PRODUCTS, DEVELOP NEW PRODUCTS AND ADAPT TO RAPID
TECHNOLOGICAL CHANGE
The market for our software is characterized by rapid technological
change, frequent new product introductions and evolving industry standards. The
introduction of products embodying new technologies and the emergence of new
industry standards can render existing products obsolete and unmarketable. We
cannot easily estimate the life cycles of our products. Our future success will
depend upon our ability to:
o enhance existing products
o develop and introduce new products that keep pace with
technological developments and emerging industry standards
o address the increasingly sophisticated needs of customers
We may be unable to accomplish these tasks. Any delays in the commencement of
commercial shipments of new products and enhancements could cause potential
customers to delay their decision to purchase our products or to choose to not
purchase our products, which would result in delays in or loss of product
revenues. In such event, our business, operating results and financial condition
would be materially adversely affected.
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DEPENDENCE ON SIGNIFICANT CUSTOMERS
For the fiscal year ended December 31, 1997, one customer accounted for
65%, and for the nine months ended September 30, 1998, one customer accounted
for 55%, of our total revenues. We are unsure if we will realize significant
future revenues from either of these customers. We also expect that for the
foreseeable future a relatively small number of customers and value added
resellers will account for a significant percentage of our revenues. The loss of
any such customer would have a material adverse effect on our operating results
and financial condition.
COMPETITION
The market for our products is intensely competitive and subject to
rapid technological change. Our competitors include Hyperion Solutions, Corp.,
HNC Software Inc., Red Brick Systems, Inc., Informix Corp., Oracle Corp., IBM,
and Cognos Inc. Because there are relatively low barriers to entry into the
software market, we expect additional competition from other established and
emerging companies if the business intelligence data delivery software market
continues to develop. Our competitors have:
o longer operating histories
o significantly greater financial, technical and marketing
resources
o greater name recognition
o a larger installed base of customers and products
o well-established relationships with our current and potential
customers
o extensive knowledge of the relational database industry
Our competitors may also be able to offer an integrated hardware and/or software
product that could be more attractive to potential customers. Our competitors
may respond more quickly to new or emerging technologies and changes in customer
requirements, or devote greater resources to the development, promotion and sale
of their products. We also expect that software industry consolidations may
create more formidable competitors, resulting in price reductions that would
reduce gross margins and erode any market share we may attain, any of which
could materially adversely affect our business, operating results and financial
condition.
DEPENDENCE UPON KEY PERSONNEL; NEED TO INCREASE SALES, MARKETING, DEVELOPMENT
AND TECHNICAL PERSONNEL
Our future performance depends in significant part upon the continued
service of key technical, sales and senior management personnel. The loss of the
services of one or more of our key employees, in particular, Robert Thompson,
our President and Chief Executive Officer or Daniel M. Pess, our Chief Operating
Officer and Chief Financial Officer, could have a material adverse effect on our
business, operating results and financial condition. We have an employment
agreement with Mr. Thompson that expires in October, 1999, and an employment
agreement with Mr. Pess that expires in May, 1999. We are unsure if we will be
able to agree with either of Messrs. Thompson or Pess on the terms of extensions
to their employment agreements prior to the expiration of these agreements.
Our future success also depends on our continuing ability to attract,
train and retain highly qualified technical, sales, marketing, development and
managerial personnel. Competition for such personnel is intense, and we may be
unable to retain key technical, sales, development and managerial employees or
attract, assimilate or retain other highly qualified technical, sales,
development and managerial personnel in the future. If we are unable
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to hire such personnel on a timely basis, our business, operating results and
financial condition could be materially adversely affected.
LACK OF PROPRIETARY TECHNOLOGY PROTECTION; RISKS OF INFRINGEMENT
We rely primarily on a combination of trade secrets, confidentiality
agreements and contractual provisions to protect our proprietary technology. We
license rather than sell our software and require licensees to enter into
license agreements that impose certain restrictions on their ability to utilize
the software. In addition, we seek to avoid disclosure of our trade secrets,
including but not limited to requiring those persons with access to our
proprietary information to execute confidentiality agreements and restricting
access to our source code. These steps afford only limited protection. We have
no patents or patent applications pending. Despite our efforts to protect our
proprietary rights, unauthorized parties may attempt to copy aspects of our
products or obtain and use information that we regard as proprietary. Policing
unauthorized use of our products may be difficult and costly, and software
piracy may become a persistent problem. In addition, the laws of some foreign
countries do not protect our proprietary rights to as great an extent as do the
laws of the United States. We are unable to predict whether our means of
protecting our proprietary rights will be adequate or whether competitors will
independently develop the same technology.
From time to time, third parties may assert patent, copyright and other
intellectual property claims against us. If we are unable to license protected
technology that may be used in our products, we could be prohibited from
manufacturing and marketing such products. We also could incur substantial costs
to redesign our products, to defend any legal action taken against us or to pay
damages to any infringed party. Litigation, which could result in substantial
cost to and diversion of our resources, may be necessary to enforce our other
intellectual property rights or to defend ourselves against claimed infringement
of the rights of others.
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POTENTIAL FLUCTUATIONS IN PERIODIC RESULTS
Our revenues may vary significantly from period to period due to the
discretionary nature of business intelligence data delivery software purchases,
and will be difficult to predict. Sales prices of our products range from
$50,000 to over $275,000. As a result, the timing of the receipt and shipment of
a single order can significantly impact our revenues and results of operations
for a particular period. We anticipate that product revenues in any quarter will
be substantially dependent on orders booked and shipped in that quarter, and we
are unable to predict revenues for any future quarter with any significant
degree of certainty.
RISK OF PRODUCT DEFECTS; PRODUCT LIABILITY
Any new products we develop would be subject to significant technical
risks. Our software products are complex and may contain undetected errors or
failures when we first introduce them or when we release new versions of them.
Although we have not experienced material adverse effects resulting from any
errors to date, our products could contain errors. If our products contain
errors, we could experience a loss of or delay in market acceptance. While we
have not experienced product liability claims to date, our product licensing and
support may entail the risk of such claims. A significant product defect or a
successful product liability claim brought against us could have a material
adverse effect on our business, operating results and financial condition.
INTERNATIONAL OPERATIONS
We intend to expand our international operations and to enter
additional international markets, which will require significant management
attention and financial resources and could adversely affect our business,
operating results of financial condition. To expand international sales
successfully, we must establish additional foreign operations, hire additional
personnel and recruit additional international resellers and distributors. If we
are unable to do so in a timely manner, our growth, if any, in international
sales will be limited, and our business, operating results and financial
condition could be materially adversely affected. We anticipate that our
international sales, if any, will be denominated in U.S. dollars. An increase in
the value of the U.S. dollar relative to foreign currencies
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could make our products more expensive and, therefore, potentially less
competitive in those markets. Additional risks inherent in our future
international business activities generally include:
o unexpected changes in regulatory requirements
o tariffs and other trade barriers
o costs of localizing products for foreign countries
o longer accounts receivable payment cycles
POSSIBLE VOLATILITY OF SECURITIES PRICES
The market price of our common stock has in the past been, and may in
the future continue to be, volatile. For instance, between January 1, 1998 and
February 3, 1999, the closing price of our common stock has ranged between $.50
and $5.50. A variety of events may cause the market price of our common stock to
fluctuate significantly, including:
o quarter to quarter variations in operating results
o adverse news announcements
o the introduction of new products
o market conditions in the industry
In addition, the stock market in recent years has experienced
significant price and volume fluctuations which have particularly affected the
market prices of equity securities of many companies that service the software
industry and which often have been unrelated to the operating performance of
such companies. These market fluctuations may adversely affect the price of our
common stock.
ISSUANCE OF PREFERRED STOCK; ANTI-TAKEOVER PROVISIONS
Our Board of Directors has the authority, without further action by the
stockholders, to issue 9,000 shares of preferred stock on such terms and with
such rights, preferences and designations, including, without limitation
restricting dividends on our common stock, dilution of the voting power of our
common stock and impairing the liquidation rights of the holders of our common
stock, as the Board may determine without any vote of the stockholders. Issuance
of such preferred stock, depending upon the rights, preferences and designations
thereof may have the effect of delaying, deterring or preventing a change in our
control. In addition, certain "anti-takeover" provisions of the Delaware General
Corporation Law, among other things, may restrict the ability of our
stockholders to authorize a merger, business combination or change of control.
NO DIVIDENDS.
We have never paid cash dividends on our common stock. We expect to
incur net losses for the foreseeable future.
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OUTSTANDING OPTIONS, WARRANTS AND CONVERTIBLE PREFERRED STOCK
We have outstanding options to purchase an aggregate of 5,001,037
shares of our common stock at a weighted average exercise price of $1.63 per
share (including options to purchase 2,614,492 shares at an exercise price of
$.94 per share which are subject to the approval of our stockholders of a
proposal to an increase the number of shares reserved for issuance under our
stock option plan) and outstanding warrants to purchase an aggregate of
3,494,757 shares of common stock at a weighted average exercise price of $4.09
per share. As a result of the October and November 1998 private placements, we
also have outstanding shares of convertible preferred stock that are convertible
into an aggregate of 9,900,000 shares of common stock and outstanding warrants
to purchase an aggregate of 6,187,500 shares of common stock at a conversion
price of $.50 per share. The exercise of all of outstanding warrants and options
and/or the conversion of the outstanding convertible preferred stock would
dilute the then-existing stockholders' percentage ownership of the common stock,
and any sales in the public market of the common stock issuable upon such
exercise and conversion could adversely affect prevailing market prices for the
common stock. Moreover, the terms upon which we would be able to obtain
additional equity capital could be adversely affected because the holders of
such securities can be expected to exercise or convert them at a time when we
would, in all likelihood, be able to obtain any needed capital on terms more
favorable to than those provided by such securities.
FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS
Certain forward-looking statements, including statements regarding our
expected financial position, business and financing plans are contained in this
prospectus or are incorporated in documents annexed as exhibits to this
prospectus. These forward-looking statements reflect our views with respect to
future events and financial performance. The words, "believe," "expect," "plans"
and "anticipate" and similar expressions identify forward- looking statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from such expectations are disclosed in this prospectus. All
subsequent written and oral forward-looking statements attributable to us are
expressly qualified in their entirety by the cautionary statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of their dates. We undertake no obligations to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
YEAR 2000 COMPLIANCE
We have commenced an assessment of the readiness of our internal
business information systems for handling the Year 2000 and the Year 2000
compliance of our products. We believe that we will need to modify or replace
portions of our internal business information systems to ensure Year 2000
compliance and we expect that we will successfully address Year 2000 issues
relating to our internal business information systems by the end of fiscal 1999.
We believe that our current products are Year 2000 compliant. However,
it is possible that current or future customers will assert claims against us
with respect to Year 2000 issues and, in the event such claims are asserted and
adjudicated in favor of these customers, our liability could be material. We are
taking steps to identify affected customers and assist them in assessing risks
that may be associated with our products. We may incur increasing costs
regarding customer service related to these actions over the next few years. As
our customer service programs are currently ongoing, we are unsure of the scope
of any resulting Year 2000 issues and potential liability resulting from such
issues. We do not know the potential impact on our business, operating results
and financial condition with respect to these matters.
We have had discussions with our significant vendors, service providers
and large customers to evaluate Year 2000 issues, if any, relating to the
interaction of their systems with our internal systems. We have not yet
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received written compliance information from these third parties and we cannot
currently determine when we will receive all of this information. Thus, despite
the initiation of these discussions, we lack the information necessary to
estimate the potential impact of Year 2000 compliance issues relating to these
third parties and their interaction with us and are unsure of when we will
receive such information.
While we have not incurred any material expenditures in connection with
identifying or evaluating Year 2000 compliance issues, there can be no assurance
that our Year 2000 compliance costs will continue at this level. Most of our
expenses have related to the opportunity cost of time spent by our employees
evaluating our internal business information systems, our products and the
interaction of our internal business information systems with the internal
systems of third parties. Although we are unaware of any material operational
issues or costs associated with preparing our internal business information
systems and products for the Year 2000, we are unsure that we will avoid serious
unanticipated negative consequences and/or material costs caused by undetected
errors or defects in our technology. Such unanticipated negative consequences
and/or material costs, if incurred, could have a material adverse effect on our
business, operating results or financial condition.
Because we are unaware of any material Year 2000 compliance issues, we
lack a Year 2000-specific contingency plan. If Year 2000 compliance issues are
discovered, we will evaluate the need for one or more contingency plans relating
to such issues. If we are unable to develop and implement appropriate
contingency plans, as needed, in a timely manner, we may experience delays in,
or increased costs associated with, implementation of changes to address any
such issues, which could have a material adverse effect on our business,
operating results or financial condition.
THE COMPANY
We develop and market business intelligence software that helps
business managers to efficiently use data to make strategic decisions. Many
businesses generate, gather and store large amounts of data. This data contains
information that, if extracted effectively and efficiently, can be used to
enhance decisionmaking. While companies have invested heavily in capturing data,
they have only recently begun to focus significant resources on the management
and analysis of that data. We developed our products in response to businesses'
desire to analyze their data.
In the third quarter of 1996, we shifted our focus from using the
software we developed for providing contract data analysis services to selling
the software itself. We have not yet made significant sales of our software
product.
In September 1998, we implemented a plan to reduce our monthly
operating costs, which included the termination of approximately 20% of our
employees.
Our principal executive offices are located at 60 Charles Lindbergh
Boulevard, Uniondale, New York 11553. Our telephone number is (516) 228-8500.
-13-
<PAGE>
USE OF PROCEEDS
The shares of common stock offered hereby are being registered for the
account of the selling stockholders identified in this prospectus. See "Selling
Stockholders." All net proceeds from the sale of the common stock will go to the
stockholders who offer and sell their shares. We will not receive any part of
the proceeds from such sales of common stock. We will, however, receive the
exercise price of the warrants and options at the time of exercise. If all of
the warrants and options are exercised, we will realize proceeds in the amount
of $10,735,715. Such proceeds will be contributed to working capital and will be
used for general corporate purposes.
SELLING STOCKHOLDERS
The name, address, maximum number of shares of common stock to be sold
and total number of shares of common stock that each selling stockholder owns
that are set forth in the following table have been provided by the selling
stockholders. The selling stockholders may sell all or part of their shares of
common stock registered hereunder.
<TABLE>
<CAPTION>
Percent Maximum
Beneficially Number of Shares Percent
Shares Beneficially Owned Prior Shares to Beneficially Beneficially
Owned Prior to this to this be Offered Owned after Owned after
Offering Offering (1) for Resale this Offering this Offering
<S> <C> <C> <C> <C> <C>
Robert M. Adams 18,750 (2) * 18,750 0 --
American Friends of Hebron 37,500 (2) * 37,500 0 --
Yeshiva
George W. Aucott 6,250 (2) * 6,250 0 --
J.M.R. Barker Foundation 11,419 (2) * 11,419 0 --
Barker, Lee & Co. 21,309 (2) * 21,309 0 --
Ronald N. Beck 25,000 (2) * 25,000 0 --
Sonia B. Blanch 6,250 (2) * 6,250 0 --
Emil E. Braun 12,500 (2) * 12,500 0 --
J. Jeffrey Brausch 3,125 (2) * 3,125 0 --
Brentwood Associates, L.P. 530,206 (3) 10.2% 68,809 461,397 8.3%
VII
Stuart Berman 36,564 (4) * 26,350 10,214 *
Richard Manners 34,980 (4) * 23,850 11,130 *
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Charles R. Buckridge 25,000 (2) * 25,000 0 --
Revocable Trust
Herbert C. Clough 467 (2) * 467 0 --
Aaron Cywiak 6,250 (2) * 6,250 0 --
D. Stake Mill Inc. 6,250 (2) * 6,250 0 --
Phillip S. and Elayne Dauber, 1,818 (2) * 1,818 0 --
Trustees f/b/o PSERD Trust
Jerry A. Dusa Trust 1,818 (2) * 1,818 0 --
Steven H. & Dara M. David 6,250 (2) * 6,250 0 --
Penn W. Davidson 6,250 (2) * 6,250 0 --
Thomas R. Deakman 6,250 (2) * 6,250 0 --
Edwin K. Dimes 6,250 (2) * 6,250 0 --
Albert W. Duffield 6,250 (2) * 6,250 0 --
Andrew Feiner 46,875 (2) * 46,875 0 --
Harry Friedman Living Trust 6,250 (2) * 6,250 0 --
Gadraz, Inc. 46,875 (2) * 46,875 0 --
Richard Gillett 1,529 (2) * 1,529 0 --
Stuart W. Gold 9,375 (2) * 9,375 0 --
Bruce Greenberg 6,250 (2) * 6,250 0 --
Jeffrey N. Greenblatt 18,750 (2) * 18,750 0 --
Stuart Greenstein 6,250 (2) * 6,250 0 --
Richard L. Grossman 6,250 (2) * 6,250 0 --
Andrew Gyenes 6,250 (2) * 6,250 0 --
Richard Hantke 6,250 (2) * 6,250 0 --
Harsac, Inc. 25,000 (2) * 25,000 0 --
Sara D. Hauser 6,250 (2) * 6,250 0 --
John J. Healy 6,250 (2) * 6,250 0 --
Andrew and Mary Ann Heller 909 (2) * 909 0 --
Terrence Hutton 6,250 (2) * 6,250 0 --
Alan Jablon 37,500 (2) * 37,500 0 --
</TABLE>
-15-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Ralph & Rosalie Joel 6,250 (2) * 6,250 0 --
Frank T. Juranich, Jr. 6,250 (2) * 6,250 0 --
Owen L. Kilgannon 25,000 (2) * 25,000 0 --
Charles Kleinberg 6,250 (2) * 6,250 0 --
Winthrop Knowlton 16,395(2)(17) * 16,395 0 --
Ronald N. Krinick 6,250 (2) * 6,250 0 --
Marc Lasry 125,000 (2) 2.4% 125,000 0 --
Scott Leach 6,250 (2) * 6,250 0 --
Dwight E. Lee 77,690(2)(18) 1.5% 1,529 0 --
Lenny Corp. 12,500 (2) * 12,500 0 --
Kirk M. Loevner 9,393 (2) * 9,393 0 --
Paul Matusow 9,188 (2) * 9,188 0 --
John McMaster 6,250 (2) * 6,250 0 --
Jonathan Medved 6,250 (2) * 6,250 0 --
Michael Menkin 6,250 (2) * 6,250 0 --
William J. Motto 3,125 (2) * 3,125 0 --
Howard W. Muchnick 43,750 (2) * 43,750 0 --
William L. Musser 1,529 (2) * 1,529 0 --
Sheila Nagar 6,250 (2) * 6,250 0 --
Namakagon Associates, L.P. 31,199 (2) * 31,199 0 --
Joseph Neuman 25,000 (2) * 25,000 0 --
Ned F. Parson 25,000 (2) * 25,000 0 --
Phoenix Leasing Inc. 2,337 (2) * 2,337 0 --
A.C. Providenti 18,750 (2) * 18,750 0 --
Malladi S. Reddy 18,750 (2) * 18,750 0 --
Lawrence Rothberg 6,250 (2) * 6,250 0 --
Steven R. Rothstein 12,500 (2) * 12,500 0 --
Eric C.Rudin 25,000 (2) * 25,000 0 --
Jerry L. Ruyan 7,250 (2) * 7,250 0 --
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Wayne Saker 6,250 (2) * 6,250 0 --
Sargent Capital Ventures, LLC 18,750 (2) * 18,750 0 --
George T. Schirripa 37,500 (2) * 37,500 0 --
Michael Schwartzbard 6,250 (2) * 6,250 0 --
Arthur A. Sharples 909 (2) * 909 0 --
Richard D. Siegal 6,250 (2) * 6,250 0 --
Arthur B. Steinberg & Co. 12,500 (2) * 12,500 0 --
Lionel N. Sterling 16,364 (2) * 16,364 0 --
Jerry W. Stoker 12,500 (2) * 12,500 0 --
Ramie A. Tritt 6,250 (2) * 6,250 0 --
Upland Associates, L.P. 12,234 (2) * 12,234 0 --
US Data Capture, Inc. 6,250 (2) * 6,250 0 --
Jeffrey S. Wilks 6,250 (2) * 6,250 0 --
Donald C. Wright 6,250 (2) * 6,250 0 --
Z/Cross Partnership 3,125 (2) * 3,125 0 --
Zee Consulting West Inc. 50,000 (2) * 50,000 0 --
Defined Benefit Pension Plan
Sanra Zipper 12,500 (2) * 12,500 0 --
Frank C. and Jane M. Zozzorra 6,250 (2) * 6,250 0 --
David M. Nussbaum 70,000 (6) 1.3% 250,000 0 --
Robert Gladstone 70,000 (6) 1.3% 250,000 0 --
Roger Gladstone 70,000 (6) 1.3% 250,000 0 --
Barington Capital Group, L.P. 125,000 (5) 2.4% 125,000 0 --
Rev-Wood Merchant Partners 200,000 (7) 3.8% 200,000 0 --
Stanley H. Blum 325,000 (8) 6.0% 325,000 0 --
Bulldog Capital Partners, L.P. 650,000 (8) 11.3% 650,000 0 --
Kenneth D. Cole 325,000 (8) 6.0% 325,000 0 --
Dalewood Associates, L.P. 312,500 (8) 5.7% 812,500 0 --
Kenneth Endelson 162,500 (8) 3.1% 162,500 0 --
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Alan W. Kaufman 425,000 (9) 7.7% 325,000 100,000 1.9%
Michael F. Kremins 162,500 (8) 3.1% 162,500 0 --
Amy L. Newmark 386,000 (10) 7.0% 325,000 61,000 1.2%
Eli Oxenhorn 556,250 (11) 9.8% 525,000 31,250 *
PAW Partners 1,625,000 (8) 24.1% 1,625,000 0 --
Richard J. Rosenstock 162,500 (8) 3.1% 162,500 0 --
Barry Rubenstein 5,822,156 (12) 57.1% 5,010,000 812,156 15.6%
Seneca Ventures 336,106 (13) 6.2% 292,500 43,606 1.0%
Carl E. Siegel 325,000 (8), 6.0% 325,000 0 --
(14)
David Thalheim 325,000 (8) 6.0% 325,000 0 --
Triple M Realty Corp. 162,500 (8) 3.1% 162,500 0 --
Wheatley Foreign Partners 4,393,594 (15) 48.7% 3,900,000 493,594 9.6%
Wheatley Partners 4,393,594 (15) 48.7% 3,900,000 493,594 9.6%
Woodland Venture Fund 349,600 (13) 6.5% 292,500 57,100 1.1%
Craig Effron 162,500 (14) 3.1% 162,500 0 --
Lloyd Goldman 162,500 (14) 3.1% 162,500 0 --
Eleanor C. Groetch 81,250 (14) 1.6% 81,250 0 --
Hudson Capital 1,625,000 (14) 24.1% 1,625,000 0 --
Dr. Steven B. Landman 162,500 (14) 3.1% 162,500 0 --
Pension Trust
William R. Rouhana 81,250 (14) 1.6% 81,250 0 --
Roberta S. & Samuel M. 81,250 (14) 1.6% 81,250 0 --
Sorkin
Stourbridge Investments Ltd. 81,250 (14) 1.6% 81,250 0 --
Richard Warren 162,500 (14) 3.1% 162,500 0 --
Steven Wolosky 65,000 (14) 1.3% 65,000 0 --
</TABLE>
- ----------------------------------
* Less than one percent
-18-
<PAGE>
(1) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after the date hereof
upon the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants or convertible securities that are held by such
person (but not those held by any other person) and that are currently
exercisable (i.e., that are exercisable within 60 days from the date
hereof) have been exercised. Unless otherwise noted, the Company
believes that all persons named in the table have sole voting and
investment power with respect to all shares beneficially owned by them.
(2) Consists of shares of common stock that are issuable upon the exercise
of warrants (the "Bridge Warrants") issued in connection with a bridge
financing consummated in July 1997 (the "Bridge Financing") or private
placements consummated in 1995 and 1996.
(3) Based on information contained in a report on Schedule 13D (the
"Brentwood 13D") filed jointly by John Walecka and Brentwood Associates
L.P., VII with the Securities and Exchange Commission (the "SEC") on
December 10, 1997. Includes (i) 6,309 shares of common stock that are
issuable upon the exercise of warrants (the "Interim Financing
Warrants") issued in connection with an interim financing consummated
in June 1997 and (ii) 62,500 shares of common stock that are issuable
upon the exercise of Bridge Warrants.
(4) Includes 23,850 shares of common stock that are issuable upon the
exercise of Interim Financing Warrants.
(5) Includes 68,750 shares of common stock that are issuable upon the
exercise of a purchase option (the "Underwriters Purchase Option")
issued in connection with the Company's initial public offering in
November 1997.
(6) Consists of 70,000 shares of common stock that are issuable upon the
exercise of warrants (the "Series A Warrants").
(7) Consists of shares of common stock that are issuable upon the exercise
of options.
(8) Consists of shares of common stock that are issuable upon exercise of
Series A Warrants.
(9) Consists of (i)100,000 shares of common stock that are issuable upon
the exercise of options, (ii) 200,000 shares common stock that are
issuable upon the conversion of Series A Preferred Stock and (iii)
125,000 shares of common stock that are issuable upon the exercise of
Series A Warrants. Mr. Kaufman has been the Company's Chairman of the
Board since October 1997 and was President and Chief Executive Officer
of the Company from October 1997 to December 1998.
(10) Includes (i) 35,000 shares of common stock that are issuable upon the
exercise of options, (ii) 200,000 shares common stock that are issuable
upon the conversion of Series A Preferred Stock and (iii) 125,000
shares of common stock that are issuable upon the exercise of Series A
Warrants. Ms. Newmark has been a Director of the Company since 1998.
(11) Based upon information contained in a report on Schedule 13D filed by
Eli Oxenhorn with the SEC. Includes (i) 31,250 shares of common stock
issuable upon the exercise of options held by Mr. Oxenhorn, (ii)
200,000 shares of common stock that are issuable upon the exercise of
options held by Rev-Wood Merchant Partners, an entity of which Mr.
Oxenhorn is a general partner, (iii) 200,000 shares common stock that
are issuable upon the conversion of Series A Preferred Stock and (vi)
125,000 shares of common stock that are issuable upon the exercise of
Series A Warrants.
(12) Based upon information contained in a report on Schedule 13D (the
"Wheatley 13D") filed jointly by Barry Rubenstein, Wheatley Foreign
Partners, L.P. ("Wheatley Foreign"), Wheatley Partners, L.P.
("Wheatley"), Seneca Ventures, Woodland Venture Fund, Woodland
Partners, Rev-Wood Merchant Partners and certain other entities with
the SEC and certain other information. Includes (i) 56,250 shares of
common stock issuable upon exercise of options, (ii) 200 shares of
common stock issuable upon exercise of Series A Warrants and (iii)
125,000 shares of common stock issuable upon conversion of shares of
Series A Preferred Stock held by Mr. Rubenstein. Also includes (a)
3,125 shares of common stock issuable upon exercise of warrants held by
Woodland Partners, (b)(i) 112,500 shares of common stock issuable upon
exercise of warrants, (ii) 62,500 shares of common stock issuable upon
conversion of shares of Series A Preferred Stock and (iii) 80,000
shares of common stock issuable upon conversion of shares of Series B
Preferred Stock, all of which is held by Woodland Fund, (c)(i) 112,500
shares of common stock issuable upon exercise of warrants, (ii) 62,500
-19-
<PAGE>
shares of common stock issuable upon conversion of shares of Series A
Preferred Stock and (iii) 80,000 shares of common stock issuable upon
conversion of shares of Series B Preferred Stock, all of which is held
by Seneca, (d)(i) 1,380,000 shares of common stock issuable upon
exercise of warrants and (ii) 2,208,000 shares of common stock issuable
upon conversion of shares of Series A Preferred Stock, all of which is
held by Wheatley, (e)(i) 120,000 shares of common stock issuable upon
exercise of warrants and (ii) 192,000 shares of common stock issuable
upon conversion of shares of Series A Preferred Stock, all of which is
held by Wheatley Foreign, and (f) 200,000 shares of common stock
issuable upon exercise of options held by Rev-Wood Merchant Partners.
Mr. Rubenstein disclaims beneficial ownership of the securities held by
Woodland Partners, Woodland Fund, Seneca, Wheatley, Wheatley Foreign
and Rev-Wood Merchant Partners, except to the extent of his respective
equity interest therein.
(13) Based upon information contained in the Wheatley 13D and certain other
information. Includes (i) 100,000 shares of common stock issuable upon
conversion of shares of Series A Preferred Stock, (ii) 62,500 shares of
common stock issuable upon the exercise of Series A Warrants, (iii)
80,000 shares of common stock issuable upon conversion of shares of
Series B Preferred Stock, (iv) 50,000 shares of common stock issuable
upon the exercise of Series B Warrants and (v) 3,125 shares of common
stock issuable upon the exercise of warrants.
(14) Consists of shares of common stock that are issuable upon (i)
conversion of shares of Series B Preferred Stock and (ii) exercise of
Series B Warrants.
(15) Based upon information contained in the Wheatley 13D and certain other
information. Includes (a)(i) 2,208,000 shares of common stock issuable
upon conversion of shares of Series A Preferred Stock, (ii) 1,380,000
shares of common stock issuable upon the exercise of Series A Warrants
and (iii) 5,879 shares of common stock issuable upon the exercise of
warrants, all of which is held by Wheatley, and (b)(i) 192,000 shares
of common stock issuable upon conversion of shares of Series A
Preferred Stock, (ii) 120,000 shares of common stock issuable upon the
exercise of Series A Warrants and (iii) 371 shares of common stock
issuable upon the exercise of warrants, all of which is held by
Wheatley Foreign. Wheatley Foreign disclaims beneficial ownership of
the securities held by Wheatley.
(16) Consists of (i) shares of common stock that are issuable upon the
conversion of shares of Series A Preferred Stock, (ii) shares of common
stock that are issuable upon the exercise of Series A Warrants, (iii)
shares of common stock that are issuable upon the conversion of shares
of Series B Preferred Stock and (iv) shares of common stock that are
issuable upon the exercise of Series B Warrants.
(17) Includes shares issuable upon the exercise of warrants held by Winthrop
and Erica Knowlton TTEE and PaineWebber CFN FBO Winthrop Knowlton IRA.
Mr. Knowlton disclaims beneficial ownership of all securities owned by
such entities, except to the extent of his equity interest therein.
(18) Mr. Lee served as a Director of the Company from August 1996 to August
1997. Includes shares issuable upon the exercise of warrants held by
Barker, Lee & Co., J.M.R. Barker Foundation, Namakagon Associates, L.P.
and Upland Associates. Mr. Lee is a general partner of Barker, Lee &
Co., Namagkagon Associates, L.P., and Upland Associates and an officer
of J.M.R. Barker Foundation. Mr. Lee disclaims beneficial ownership of
all securities owned by such entities, except to the extent of his
equity interest therein.
-20-
<PAGE>
PLAN OF DISTRIBUTION
This offering is self-underwritten; neither we nor the selling
stockholders have employed an underwriter for the sale of common stock by the
selling stockholders. We will bear all expenses in connection with the
preparation of this Prospectus. The selling stockholders will bear all expenses
associated with the sale of the common stock.
The selling stockholders may offer their shares of common stock
directly or through pledgees, donees, transferees or other successors in
interest in one or more of the following transactions:
o On any stock exchange on which the shares of common stock may
be listed at the time of sale
o In negotiated transactions
o In the over-the-counter market
o In a combination of any of the above transactions
The selling stockholders may offer their shares of common stock at any
of the following prices:
o Fixed prices which may be changed
o Market prices prevailing at the time of sale
o Prices related to such prevailing market prices
o At negotiated prices
The selling stockholders may effect such transactions by selling shares
to or through broker-dealers, and all such broker-dealers may receive
compensation in the form of discounts, concessions, or commissions from the
selling stockholders and/or the purchasers of shares of common stock for whom
such broker-dealers may act as agents or to whom they sell as principals, or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions).
Any broker-dealer acquiring common stock from the selling stockholders
may sell the shares either directly, in its normal market-making activities,
through or to other brokers on a principal or agency basis or to its customers.
Any such sales may be at prices then prevailing on Nasdaq or at prices related
to such prevailing market prices or at negotiated prices to its customers or a
combination of such methods. The selling stockholders and any broker-dealers
that act in connection with the sale of the common stock hereunder might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act; any commissions received by them and any profit on the resale of
shares as principal might be deemed to be underwriting discounts and commissions
under the Securities Act. Any such commissions, as well as other expenses
incurred by the selling stockholders and applicable transfer taxes, are payable
by the selling stockholders.
The selling stockholders reserve the right to accept, and together with
any agent of the selling stockholder, to reject in whole or in part any proposed
purchase of the shares of common stock. The selling stockholders will pay any
sales commissions or other seller's compensation applicable to such
transactions.
We have not registered or qualified offers and sales of shares of the
common stock under the laws of any country, other than the United States. To
comply with certain states' securities laws, if applicable, the selling
stockholders will offer and sell their shares of common stock in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the selling stockholders may not offer or sell
shares of common stock unless we have registered or qualified such shares for
sale in such states or we have complied with an available exemption from
registration or qualification.
The selling shareholders have represented to us that any purchase or
sale of shares of common stock by them will comply with Regulation M promulgated
under the Securities Exchange Act of 1934, as amended. In general, Rule 102
under Regulation M prohibits any person connected with a distribution of our
common stock (a "Distribution") from directly or indirectly bidding for, or
purchasing for any account in which he or she has a beneficial interest, any of
our common stock or any right to purchase our common stock, for a period of one
-21-
<PAGE>
business day before and after completion of his or her participation in the
distribution (we refer to that time period as the "Distribution Period").
During the Distribution Period, Rule 104 under Regulation M prohibits
the selling shareholders and any other persons engaged in the Distribution from
engaging in any stabilizing bid or purchasing our common stock except for the
purpose of preventing or retarding a decline in the open market price of our
common stock. No such person may effect any stabilizing transaction to
facilitate any offering at the market. Inasmuch as the selling shareholders will
be reoffering and reselling our common stock at the market, Rule 104 prohibits
them from effecting any stabilizing transaction in contravention of Rule 104
with respect to our common stock.
There can be no assurance that the selling shareholders will sell any
or all of the shares offered by them hereunder or otherwise.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the shares of
common stock offered hereby have been passed upon for the Company by Olshan
Grundman Frome Rosenzweig & Wolosky LLP, 505 Park Avenue, New York, New York
10022. Steven Wolosky, a member of such firm, beneficially owns 65,000 shares of
our common stock.
EXPERTS
The consolidated financial statements of QueryObject Systems
Corporation incorporated in this Prospectus by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1997 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants
given on the authority of said firm as experts in auditing and accounting.
ADDITIONAL INFORMATION
We have filed with the Commission a Registration Statement on Form S-3
under the Securities Act with respect to the Shares offered hereby. For further
information with respect to the Company and the securities offered hereby,
reference is made to the Registration Statement. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference.
-22-
<PAGE>
No dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this prospectus
and, if given or made, such other information and representations must not be
relied upon as having been authorized by us. This prospectus does not constitute
an offer or solicitation by anyone in any state in which such person is not
authorized, or in which the person making such offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such offer
or solicitation. The delivery of this prospectus at any time does not imply that
the information herein is correct as of any time subsequent to the date hereof.
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell or
buy any shares in any jurisdiction where it is unlawful.
15,639,172 SHARES
QUERYOBJECT SYSTEMS CORPORATION
COMMON STOCK
PROSPECTUS
February 11, 1999
-23-
