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As filed with the Securities and Exchange Commission on November 9, 1998
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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ZAMBA CORPORATION
(formerly known as Racotek, Inc.)
(Exact name of Registrant as specified in its charter)
DELAWARE 3576 41-1636021
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Number)
organization)
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7301 OHMS LANE, SUITE 200
MINNEAPOLIS, MINNESOTA 55439
(612) 832-9800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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PAUL EDELHERTZ
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ZAMBA CORPORATION
7301 OHMS LANE, SUITE 200
MINNEAPOLIS, MINNESOTA 55439
(612) 832-9800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
Copies to:
MICHAEL J. SULLIVAN, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CALIFORNIA 94306
(650) 843-5000
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
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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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO REGISTERED(1) PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
BE REGISTERED
<S> <C> <C> <C> <C>
Common Stock, $.01 par value. 2,337,992 $1.6875(2) $3,945,361.50(2) $1,096.81
Common Stock, $.01 par value, 1,157,698(3) $1.8672(3) $2,161,653.71(3) $600.94
issuable upon conversion of notes
Common Stock, $.01 par value, 462,247 $1.6875(2) $780,041.81(2) $216.86
issuable upon exercise of warrants
Common Stock, $.01 par value, 1,000,000 $1.6875(2) 1,687,500(2) $481.13
issuable upon conversion of
preferred stock
Total 4,957,937 $2,383.74
</TABLE>
(1) In the event of a stock split, stock dividend, or similar transaction
involving the common stock of Zamba of shares registered
hereby shall be automatically increased pursuant to Rule 416 to cover
the additional shares of common stock required to prevent dilution.
(2) Estimated in accordance with Rule 457(c) solely for the purpose of
computing the amount of the registration fee based on the average of
the high and low prices of Zamba's common stock as reported on the
Nasdaq National Market on November 3, 1998.
(3) Estimated in accordance with Rule 457(c) solely for the purpose of
computing the amount of the registration fee. Includes such
indeterminate number of shares of common stock as may be issued at
indeterminable prices, should the notes be converted to common stock,
at Zamba's sole discretion, but with an aggregate initial value of
$2,161,674.82. This calculation uses the number of shares of common
stock that would have been issuable if all notes had requested
conversion on November 3, 1998, based on the average closing price of
Zamba's common stock as reported on the Nasdaq National Market for
the twenty (20) business days preceding the request.
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. We 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>
Registration No. 333-
PROSPECTUS
SUBJECT TO COMPLETION DATED NOVEMBER 9, 1998
ZAMBA CORPORATION
4,957,937 SHARES OF COMMON STOCK
This prospectus covers the offer and sale of an estimated 4,957,937
shares of Zamba common stock. The common stock is being offered and sold by
certain of our securityholders. Twenty of these selling securityholders were
formerly shareholders of QuickSilver Group, Inc. QuickSilver was acquired by
Zamba on September 22, 1998 in the QuickSilver merger. As part of the
QuickSilver merger, former QuickSilver shareholders received 2,337,992 shares
of Zamba common stock and notes with an aggregate principal value of
$2,161,674.82. The notes are convertible into common stock at the option of
the holder and with Zamba's consent. Zamba may withhold its consent in its
sole and absolute discretion. The notes convert based on the twenty day
average closing price, as reported on the Nasdaq National Market, preceding
the conversion request. As part of the QuickSilver merger, one
securityholder received warrants to purchase 462,247 shares of common stock
at an exercise price of $0.0066623 per share. One securityholder owns
1,000,000 shares of Series A Junior Participating Preferred Stock. The
preferred stock was issued and sold in a private placement. The shares of
preferred stock are convertible into 1,000,000 shares of common stock when
sufficient authorized common stock becomes available. Some or all of the
selling securityholders expect to sell their shares.
THE PROCEEDS AND DETERMINING THE OFFERING PRICE
All proceeds from the sale of the common stock under this prospectus
will go to the securityholders. Zamba will not receive any proceeds from
sales of the common stock. Zamba will, however, receive the exercise price
of the warrants at the time of conversion.
Zamba common stock is listed on the Nasdaq National Market under the
symbol: "ZMBA." Zamba anticipates that the common stock sold under this
prospectus will be listed on the Nasdaq National Market, although that
listing has not yet been approved. Transactions in the common stock may take
place on or off the Nasdaq National Market. The transactions may take place
at prevailing market prices or at privately negotiated prices. On November
5, 1998, the closing price of one share of Zamba common stock on the Nasdaq
National Market was $1.75.
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THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 4.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
No underwriting commissions or discounts will be paid by Zamba in
connection with this offering. Estimated expenses payable by Zamba in
connection with this offering are estimated to be $56,883.74. The aggregate
proceeds to the selling securityholders from the common stock will be the
purchase price of the common stock sold less the aggregate agents'
commissions and underwriters' discounts, if any, and other expenses of
issuance and distribution not borne by Zamba. See "Plan of Distribution."
November 9, 1998
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TABLE OF CONTENTS
THE COMPANY..................................................................3
ADDITIONAL INFORMATION.......................................................3
WHERE YOU CAN GET MORE INFORMATION...........................................3
RISK FACTORS.................................................................4
USE OF PROCEEDS..............................................................8
DIVIDEND POLICY..............................................................8
SELLING SECURITYHOLDERS......................................................9
DESCRIPTION OF WARRANTS.....................................................10
DESCRIPTION OF PREFERRED STOCK..............................................10
DESCRIPTION OF NOTES........................................................10
PLAN OF DISTRIBUTION........................................................10
LEGAL MATTERS...............................................................12
EXPERTS.....................................................................12
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THE COMPANY
Zamba is a national dedicated customer care consulting company. Our
services are designed to assist clients in building lasting relationships with
customers, increase the effectiveness of customer service and sales operations
and improve overall communications with customers. We deliver our services
using a unique combination of accumulated expertise in the customer care field,
existing technology and client knowledge and guarantee on time/on budget
delivery of our services. Our offices are located in Cupertino and Pleasanton,
California, Boston, Dallas, Minneapolis and other satellite locations.
Our services include the design, implementation and integration of several
enterprise level applications to facilitate sales force automation, call center
management, marketing automation and automated field service and sales. We have
successfully implemented more than 75 customer care solutions for industry
leading clients. Representative clients include: Ameritech, Bay Networks,
Cisco, 3-Com, Compaq, Compucom, Hertz, Hewlett-Packard, Honeywell, MCI,
Progressive, SHL, Symbol, Qualcomm, Wang and Xerox. We have also established
key partnerships with leading customer care providers such as Calico Technology,
Clarify and CrossWorlds, to provide integrated solutions to our clients.
Zamba Corporation, formerly Racotek, Inc., was originally incorporated in
Minnesota in March 1989 and reincorporated in Delaware in August 1990. Unless
otherwise indicated, "Zamba" and the "Company" refer to Zamba Corporation, a
Delaware corporation, its wholly-owned subsidiary and predecessors. Our
principal executive offices are located at 7301 Ohms Lane, Suite 200,
Minneapolis, Minnesota 55439. Our telephone number is (612) 832-9800.
ADDITIONAL INFORMATION
We have filed with the SEC (the "SEC" or the "Commission") a
registration statement on Form S-3 under the Securities Act, with respect to
the re-sale of common stock issued in the QuickSilver merger, the exercise of
the warrants, and the conversion of the notes and preferred stock. This
prospectus, which constitutes a part of that registration statement, does not
contain all the information contained in that registration statement and its
exhibits. For further information with respect to us and the our common
stock, you should consult the registration statement and its exhibits.
Statements contained in this prospectus concerning the provisions of any
documents are necessarily summaries of those documents, and each statement is
qualified in its entirety by reference to the copy of the document filed with
the SEC. The registration statement and any of its amendments, including
exhibits filed as a part of the registration statement or an amendment to the
registration statement, are available for inspection and copying through the
entities listed below. See "Where You Can Get More Information."
WHERE YOU CAN GET MORE INFORMATION
We are subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Thus, we file
annual and quarterly reports, proxy statements and other information with the
Securities and Exchange Commission. You may read, inspect, and copy any
documents we file at the Commission's public reference facilities, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 or in the Commission's Regional
Offices at Seven World Trade Center, 13th Floor, New York, New York 10048; and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of our filings can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Our SEC filings are also available to the public from
the SEC's Website at "http://www.sec.gov." Our common stock is listed on The
Nasdaq National Market and reports and other information concerning Zamba may be
inspected at the offices of The Nasdaq Stock Market at 1735 "K" Street, N.W.,
Washington, D.C. 20006-1500.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below as (1), (2), (3) and (4):
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(1) Zamba's Current Report on Form 8-K filed with the Commission on
October 7, 1998;
(2) Zamba's Annual Report on Form 10-K for the year ended December 31,
1997;
(3) Zamba's Quarterly Reports on Form 10-Q for quarters ended March 31,
1998 and June 30, 1998; and
(4) The description of the Zamba's common stock set forth in Zamba's
Registration Statement on Form 8-A filed with the Commission on
October 26, 1993.
Each document filed after the date of this prospectus under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act and before the termination of
the offering is also incorporated by reference into this prospectus and is
made a part of this prospectus from the date of its filing. Any statement
contained in this prospectus or a document incorporated or deemed to be
incorporated by reference in this prospectus, shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained herein or in any subsequently-filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
You may request a copy of these filings, except the exhibits to such
documents (unless the exhibits are specifically incorporated by reference into
such documents) at no cost. Such requests should be directed to the Secretary
of the Company, at Zamba's principal executive offices at 7301 Ohms Lane, Suite
200, Minneapolis, MN 55439, or telephone number (612) 832-9800.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS. WE HAVE AUTHORIZED NO ONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE
DOCUMENT.
RISK FACTORS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE KNOWN
AND UNKNOWN RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS, PERFORMANCE, OR
ACHIEVEMENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN, THESE
FORWARD-LOOKING STATEMENTS. YOU SHOULD CAREFULLY CONSIDER THE RISKS
DESCRIBED BELOW, ELSEWHERE IN THIS DOCUMENT AND IN THE DOCUMENTS INCORPORATED
HEREIN BY REFERENCE IN MAKING AN INVESTMENT DECISION. THE RISKS DESCRIBED
BELOW MAY NOT BE THE ONLY RISKS FACING ZAMBA.
RISKS RELATING TO THE MERGER
INTEGRATION RISKS
On September 22, 1998, we acquired QuickSilver Group, Inc. ("QuickSilver").
Integrating Zamba and QuickSilver will be a complex, time-consuming and
expensive process. Before the merger, Zamba and QuickSilver operated
independently, each with its own business, business culture, clients, employees
and systems. After the merger, Zamba and QuickSilver must operate as a combined
organization utilizing common (1) information and communication systems, (2)
operating procedures, (3) financial controls and (4) human resource practices,
including benefit, training and professional development programs. There may be
substantial difficulties, costs and delays involved in integrating Zamba and
QuickSilver. These may include:
- Distracting management from the business of the combined company
- Potential incompatibility of business cultures
- Perceived adverse change in client service standards, business focus,
billing practices, or service offerings available to clients
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- Perceived uncertainty in career opportunities, benefits and the long-
term value of stock options held by employees
- Costs and delays in implementing common systems and procedures
- Potential inefficiencies in delivering services to the clients of the
combined company
- Potential inability to obtain consents of third parties required
because of the merger
- Potential inefficiencies in managing operations in Massachusetts and
California from the Minnesota headquarters
Any one or all of these factors may cause increased operating costs, lower
than anticipated financial performance or the loss of clients and employees.
Some of these factors are also outside the control of either company. The
failure to the integrate Zamba and QuickSilver would have a material adverse
effect on the business, financial condition and results of operations of the
combined company.
RISKS RELATING TO THE BUSINESS OF ZAMBA
POTENTIAL INABILITY TO ATTRACT AND RETAIN EMPLOYEES.
Our business is labor-intensive and requires highly skilled employees.
Most of our employee consultants possess extensive expertise in information
technology, sales and marketing and consulting fields. To serve a growing
client base, we must continue to recruit and retain qualified personnel with
expertise in each of these three fields. Competition for such personnel is
intense. We compete for such personnel with management consulting firms,
software firms and other businesses. Many of these entities have
substantially greater financial and other resources than we do. Zamba from
time to time has difficulty recruiting a sufficient number of qualified
personnel to serve existing and new clients. If we fail to recruit and
retain a sufficient number of qualified personnel, our ability to expand our
client base or services could be impaired and our business, financial
condition and results of operations could be adversely affected.
FLUCTUATION IN OPERATING RESULTS
Our net revenue and operating results may fluctuate significantly because
of a number of other factors, some of which are outside our control. These
factors may include:
- Losing key personnel and other employees
- Consummating an acquisition
- Costs of integrating acquired operations
- Fluctuations in market demand for our services, consultant hiring
and utilization
- Uncertainty and changes in our sales cycle
- Costs of obtaining or losing customers and accounts
- Increased competition and pricing pressures
- Changes in our or our competitor's business strategy, pricing and
billing policies of Zamba and its competitors
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A substantial portion of our expenses, particularly personnel and
related costs, depreciation, office rent and occupancy costs, are relatively
fixed. One or more of the foregoing factors may cause our operating expenses
to be disproportionately high during any given period. Based on the
preceding factors, we may experience a shortfall in revenue or earnings or
otherwise fail to meet public market expectations, which could materially
adversely affect our business, financial condition and the market price of
our common stock.
RISKS ASSOCIATED WITH NEW BUSINESS FOCUS
We focus on selling system integration services to clients in a small
number of vertical markets, such as sales force automation, call centers,
marketing automation, customer care, field service and sales. Although we
believe that this specialization will increase our market presence, customer
base and profitability, we may fail to obtain customers, effectively deliver
services or meet customer demands in one or more of these markets. If we
fail in any of these respects, such failure could have a material adverse
impact on our financial condition and results of operations. In addition,
part of our strategy involves divesting certain technology and products. For
example, we recently completed the transfer of our NextNet technology to a
44% owned entity. We may not realize any return on such divestiture.
The new focus of Zamba presents several risks, many of which are outside
of our control. Redefining a company is a complex, time-consuming and
expensive process. It involves changing strategies, aligning services and
product categories, changing management and employees, and focusing on new
markets and customers. We could spend considerable amounts of money and
commit resources, but ultimately receive little or no return on our
investment. Customers may not be receptive and competitors may already be
established in the new markets, making it difficult for us to gain a
sustainable market share or acquire new customers.
CLIENT CONCENTRATION
We derive a substantial part of our revenues from a small number of
clients. The loss of one or more of these clients will materially adversely
affect our financial condition and results of operations.
Our services often involve the implementation of complex information
systems and software which are critical to the clients' operations. Our failure
to meet client expectations in the performance of our services may damage our
reputation and adversely affect our ability to attract and retain clients. If a
client is not satisfied with our services, we will generally spend additional
human and other resources at our own expense to ensure client satisfaction.
Such expenditures will typically result in a lower margin on such engagements
and could materially adversely effect our business, financial condition and
results of operations.
In the course of providing services, we will recommend the use of other
software and hardware products. These products may not perform as expected
or may contain defects. If this occurs, our reputation could be damaged and
we could be subject to liability. We attempt to limit our exposure to
potential liability claims. Such limitations may not be effective. A
successful liability claim brought against us may adversely affect our
reputation and could have a material adverse effect on our business,
financial condition and results of operations. Our inability to obtain new
clients or large-scale implementation and integration projects could
materially and adversely affect the growth of our business.
COMPETITION
Competition in the systems implementation industry is intense. We have
competitors that provide some or all of the services we provide. Our
principal competitors include: (1) international consulting firms, (2)
regional and specialty consulting firms, consulting firms, including
information technology consulting firms, such as Cambridge Technology
Partners and Sapient and (3) the consulting groups of international
accounting firms such as Andersen Consulting, Ernst & Young, KPMG and
PricewaterhouseCoopers. Many of our current and possible direct competitors
have substantially greater financial, technical, marketing, sales, and other
resources than we have. Such competitors may be able to respond more
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quickly to new and emerging technologies and changes in customer demands.
Major software development companies, as well as computer, database and
communication companies, are possible sources of future direct competition
for Zamba's products and services. Competitive pressures may cause our
revenue and operating margins to decline or otherwise materially adversely
affect our business, financial condition and results of operations.
DEPENDENCE ON STRATEGIC PARTNERS
We are dependent upon the strategic relationships that we have formed
with various software and hardware providers and application companies. We
use the products developed by these companies in assembling customer based
solutions and integrate these applications into customer sites. Certain
partners and solutions may prove to be inappropriate for some or all of our
clients. Factors which could lead to the loss of a partner include: (1)
obsolescence of a partner's product or solution; (2) incompatibility of a
partner's product or solution with our client's systems; (3) poor customer
service or maintenance services performed by the partner; (4) introduction of
competing products; or (5) change in customer needs or demands. In addition,
a partner could be lost if the partner no longer wished to collaborate with
us, due to such factors as: (1) inability to negotiate acceptable strategic
agreements, (2) change in the partner's business focus, or (3) development of
other competing relationships. Any one or all of these events could result in
the loss of a partner. We may not be able to replace a partner, leading to
an ultimate inability to provide services on a timely basis, if at all, to
our customers.
YEAR 2000
Many computers and computer programs are designed with dates that
contain two digits instead of four digits, potentially causing "19XX" to be
the date for any year entered or processed. As a result, a date-sensitive
program with a year ending in "00" may be read by the computer as "1900"
instead of "2000." This may cause the computer or program to be unable to
process date information between the twentieth and twenty-first centuries.
This inability could cause the disruption or failure of processing by such
computer or program (the "Year 2000 Issue"). The Year 2000 Issue could affect
Zamba in numerous ways, including temporarily preventing us from sending
invoices to our clients, interfering with or damaging development work we do
for our clients, and causing our clients to lower their budgets for our
customer care solutions in order to fund resolution of their own Year 2000
issues.
We have conducted a limited review of our internal computer systems and
legacy proprietary hardware and software products that could be affected by
the Year 2000 Issue. Based on this limited review, technology changes for
potential Year 2000 issues are not currently expected to have a material
impact on our operations. We expect to complete our review of our internal
systems and legacy products by the first quarter of 1999. Because of
infrastructure improvements we are making, which include servers and
networking products that are Year 2000 compliant, we currently do not
anticipate significant risk to our internal operations because of the Year
2000 Issue. During the first quarter of 1999, we will also institute a
program to contact material vendors and customers to determine the impact of
Year 2000 issues on their products and businesses, respectively. However, if
our present and future efforts to address the Year 2000 issue are not
successful, or if vendors and other third parties with which we conduct
business do not successfully address the Year 2000 issue, our business,
financial condition and results of operations may be materially adversely
affected.
SHARES ELIGIBLE
Sales of substantial amounts of the Zamba's common stock in the public
market after this offering could adversely affect the market price of the
common stock. In addition to the estimated 4,957,937 shares offered hereby,
upon the closing of the offering, there will be 25,082,845 shares of common
stock outstanding, none of which are restricted shares ("Restricted
Shares") under the Securities Act of 1933, as amended (the "Securities Act").
Of the 4,957,937 shares covered by this registration statement, 145,580
shares, will be immediately salable. The Holder of the warrants, Tom Minick
and Todd Fitzwater have signed certain lock-up agreements that restrict the
resale of the their shares. The 462,247 warrant shares will be not be
eligible for sale in the public market until March 21, 1999. Tom Minick and
Todd Fitzwater hold 2,192,412 shares of common stock which will not be
eligible for sale in the public market until March 22, 1999. At that time
one eighth of these shares will be eligible for sale every three months. In
addition, the 1,000,000 shares of common stock issuable on the conversion of
the preferred stock will not be issued until there are sufficient authorized
shares of common stock. When sufficient additional shares are authorized,
these common shares could be issued and sold in the public market. The
estimated 1,157,698 shares issuable upon conversion of the notes will not be
issued unless note holders request a conversion, and we consent, at our sole
discretion. Sales in the public market of substantial amounts
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of common stock or the perception that such sales could occur could depress
prevailing market prices for the common stock.
LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY
We rely on a combination of copyright, trade secret and trademark laws,
and third party nondisclosure agreements to protect our intellectual property
rights. The laws of certain countries in which our services are or may be
performed may not protect our intellectual property rights to the same extent
as the laws of the United States. It may be possible for unauthorized third
parties to obtain and use information that we regard as proprietary or to
develop equivalent implementation methodologies independently. 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
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
the infringed party. Litigation, which could result in substantial cost to,
and diversion of our resources, may be necessary to enforce patents or our
other intellectual property rights or to defend ourselves against claimed
infringement of the rights of others.
VOLATILITY OF STOCK PRICE
Technology companies, including Zamba, frequently experience volatility in
their common stock prices. Factors creating such volatility include:
- quarterly fluctuations in results of operations
- announcements of technological innovations or the introduction of new
products
- macroeconomic conditions in the computer hardware, software, data
communication and wireless communication industries
- extreme price and volume fluctuations of the general stock market,
which have particularly affected the market price for many technology
companies, in some cases unrelated to the operating performance of
those companies. These broad market fluctuations may materially
adversely affect the market price of our stock.
These factors may have a significant adverse impact on the market price of
our stock. If revenues or earnings in any quarter fail to meet the expectations
of the investment community, there could be an immediate impact on our stock
price. In addition, our issued shares and stock options which if sold directly
or exercised and sold on the open market in large concentrations, could cause
our stock price to decline in the short term.
USE OF PROCEEDS
If all of the warrants (with an exercise price of $.0066623 per share) are
exercised, we will realize proceeds in the amount of $3,079.63. Such proceeds
will be contributed to our working capital and used for general corporate
purposes. We will not receive any proceeds from the sale of common stock by the
selling securityholders.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock and we
intend to retain all available funds for use in the operation and expansion
of our business. We do not anticipate that any cash dividends will be
declared or paid in the foreseeable future.
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SELLING SECURITYHOLDERS
The following list of selling securityholders includes the twenty-two
securityholders that received Zamba shares, notes or warrants though the
QuickSilver merger and in a private financing. The common stock listed below
represents all of the Zamba common stock that each Selling Securityholder owned
beneficially as of November 4, 1998, and the number of shares which may be
offered pursuant to this Prospectus. This information is based upon information
provided by the selling securityholders. The selling securityholders may sell
all, some or none of their common stock being offered.
<TABLE>
<CAPTION>
ADDITIONAL SHARES OWNED
PRIOR TO OFFERING IF NOTES NUMBER
SHARES OWNED ARE CONVERTED, OF SHARES
PRIOR TO OFFERING(1) WITH CUMULATIVE PERCENT
----------------------------- BENEFICIAL OWNERSHIP
-------------------------------
SELLING SECURITYHOLDER NUMBER PERCENT(2) NUMBER(3) PERCENT(2)(4) BEING OFFERED(5)
- ------------------------------ ------------- ------------ --------------- --------------- --------------------
<S> <C> <C> <C> <C> <C>
Keith Allaun 10,882 * 5,388 * 16,270
Peggy Apodaca 2,499 * 1,237 * 3,736
William Bamford 512 * 253 * 765
Chinmoy Bhagawat 5,029 * 2,490 * 7,519
Mary Brennock 2,667 * 1,320 * 3,987
Todd Fitzwater 1,092,024 3.84 540,740 5.62 1,632,764
Zamba Corporation
7301 Ohms Lane, Suite 200
Minneapolis, MN 55439
Robert Gahagan 890 * 440 * 1,330
Anthony Hart 6,212 * 3,075 * 9,287
Sandra Hunter 3,596 * 1,780 * 5,376
Aarij Khan 5,545 * 2,743 * 8,290
Victor Kremer 1,884 * 932 * 2,816
Pete Kushmeider 1,783 * 882 * 2,665
Cameron Lewis 43,016 * 21,300 * 64,316
Patrick Lewis 47,051 * 23,298 * 70,349
Tom Minick 1,100,388 3.87 544,881 5.47 1,645,269
Zamba Corporation
7301 Ohms Lane, Suite 200
Minneapolis, MN 55439
Wendy Novakovich 1,953 * 967 * 2,920
Heather Plep 26 * 12 * 38
Cynthia Sass 602 * 298 * 900
Joe Schlesinger 594 * 293 * 887
Tracy Slap 2,237 * 1,107 * 3,344
Steven Stolle 8,603 * 4,260 * 12,863
Petra Capital,LLC(6) 462,247 1.63 462,247
Joseph Costello(7) 2,522,000 8.62 1,000,000
Cad.Lab, Inc.
2880 Lakeside Drive, Suite 250
Santa Clara, CA 95054
</TABLE>
* Less than one percent.
- ------------------------------
(1) Unless otherwise indicated below, the persons named in the table have
sole voting and investment power with respect to all shares
beneficially owned by them, subject to community property laws where
applicable. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission and includes
sole or shared voting or investment power with respect to shares
shown as beneficially owned.
9
<PAGE>
(2) The apllicable percentage of ownership is based on 27,420,837 shares
of common stock outstanding on November 4, 1998.
(3) The number of notes is based on an assumption that the holder
requests conversion, Zamba agreed, and the average closing
price as reported on the Nasdaq National Market for twenty days was
$1.8672 per share, the average closing market price for the twenty
days preceding November 3, 1998.
(4) The percentage of shares of common stock owned by the noteholders
prior to the offering is based on the total number of shares
outstanding on November 4, 1998 plus the shares issuable upon
potential conversion of the notes at an assumed conversion price of
$1.8672 per share.
(5) Assumes the sale of all shares offered hereby.
(6) Represents 462,247 shares issuable upon exercise of the warrants.
(7) Mr. Costello is Chairman of the Board of Directors of Zamba. His
ownership consists of 1,039,000 shares of common stock, options to
purchase 483,000 shares of common stock, and 1,000,000 shares of
common stock issuable upon the conversion of 1,000,000 shares of
preferred stock.
DESCRIPTION OF WARRANTS
As part of the QuickSilver merger, we issued warrants to purchase
462,247 shares of our common stock to Petra Capital, LLC. The warrants may
be exercised, at the option of the holder, at any time after the grant date
of September 18, 1998. The exercise price is $.0066623 per share. The
warrants contain provisions for the adjustment of the exercise price or the
aggregate number of shares issuable upon exercise of the warrants under
certain circumstances, including stock dividends, stock splits, combinations,
mergers, consolidations, recapitalizations, reclassifications, and sales
below the exercise price. The warrants will expire on March 9, 2008. We also
agreed to register the common stock issuable upon the exercise of the
warrants.
DESCRIPTION OF PREFERRED STOCK
On October 26, 1998 we sold 1,000,000 shares of our Series A Junior
Participating Preferred Stock, in a private offering. The shares were sold
at $2.00 per share to Joseph Costello, the Chairman of our Board of
Directors. The preferred stock enjoys the same dividend, liquidation and
voting rights as the common stock. The preferred stock is convertible into
shares of common stock when a sufficient number of authorized and unissued
shares of common stock becomes available. The actual number of shares of
common stock issuable upon conversion will be equal to the $2,000,000
purchase price (plus any declared dividends) divided by $2.00 per share, as
adjusted for any dilution. We also agreed to register the common stock
issuable upon the conversion of the preferred stock.
DESCRIPTION OF NOTES
As part of the QuickSilver merger, QuickSilver shareholders were issued
convertible promissory notes with an aggregate principal value of
$2,161,674.82. The notes accrue interest at the rate of 7% per annum and
principal and interest are payable on the last day of each quarter, beginning
on December 31, 1999 and concluding on December 31, 2003. The notes are
convertible at the request of the holder, and upon our consent. We may
withhold our consent in our sole and absolute discretion. If converted, the
actual number of shares of common stock issuable upon the conversion of the
notes will equal (i) the unpaid original value of the notes being converted,
plus accrued interest, divided by (ii) a Conversion Price equal to the
average of the closing prices of the common stock as reported on the Nasdaq
National Market during the twenty consecutive trading days preceding such
request. If converted, we agreed to register any common stock issuable upon
the conversion of the notes.
PLAN OF DISTRIBUTION
Selling securityholders received an aggregate of 2,337,992
reorganization shares of common stock from Zamba pursuant to the
reorganization agreement among Zamba, QuickSilver Acquisition Corp.,
QuickSilver and the former QuickSilver shareholders. We agreed to file a
10
<PAGE>
registration statement on Form S-3 for the reorganization shares pursuant to
the reorganization agreement. The reorganization shares are "restricted
securities" for purposes of the Act. A total of 2,192,412 of the
reorganization shares are subject to lock-up agreements that limit sales or
other distributions prior to March 22, 2000. One-eighth of these shares may
be sold after March 22, 1999. After March 22, 1999, an additional one-eighth
of these shares will be released from the provisions of the lock- up every
three months. We will not receive any proceeds from sales of the
reorganization shares.
The QuickSilver shareholders were also issued convertible promissory
notes with an aggregate principal value of $2,161,674.82 pursuant to the
reorganization agreement. The notes are convertible at the request of the
holder, and with our consent. We may withhold our consent in our sole and
absolute discretion. Accordingly, there may be no note shares issued or
available for sale. If the holders requested conversion on November 3, 1998,
and we did consent to conversion, 1,157,698 shares of common stock would be
issued upon such conversion. We agreed to file a registration statement on
Form S-3 for any common stock received upon conversion of the notes. We will
not receive any of the proceeds from sales of the note shares. Prior to the
effectiveness of this registration statement, any note shares are "restricted
securities" for purposes of the Act.
Joseph Costello, the Chairman of the Board of Directors of Zamba,
purchased 1,000,000 shares of Series A Junior Participating Preferred Stock
of Zamba in a private offering. When sufficient authorized and unissued
common stock is available, 1,000,000 shares of common stock will be issued to
Mr. Costello in exchange for the preferred stock. The trading of these
shares, prior to the effectiveness of this registration statement, is subject
to the restrictions of Rule 144. We agreed to register, under certain
circumstances, all of the shares issued upon conversion of the Series A
Preferred Stock. We will not receive any proceeds from the conversion of the
preferred stock or the resale of the conversion shares.
Petra Capital, LLC holds warrants to purchase 462,247 shares of common
stock of Zamba. The warrants may be exercised, at the option of the holder,
at an exercise price of $.0066623 per share. We agreed to register all of
the shares issuable upon exercise of the warrants. We will not receive any
of the proceeds from resale of the warrant shares. Prior to the effectiveness
of this registration statement, the warrant shares are "restricted
securities" for purposes of the Securities Act. Offers, sales or other
transfer of the warrants are not covered by this prospectus. The warrant
shares are subject to a lock-up agreement that prohibits their resale prior
to March 21, 2000.
The selling securityholders may offer their common stock at various times
in one or more of the following transactions:
- on any of the United States securities exchange where our common stock
is listed, including the Nasdaq National Market, or any other exchange
where our common stock may be listed in the future;
- in the over-the-counter market;
- in transactions other than on such exchanges or in the
over-the-counter market;
- in connection with short sales of the common stock;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options; or
- in a combination of any of the above transactions.
The selling securityholders may sell their common stock at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices.
The selling securityholders may use broker-dealers to sell their common
stock. If this happens, broker-dealers will either receive discounts or
commissions from the selling securityholders, or they will receive commissions
from purchasers of common stock for whom they acted as agents.
11
<PAGE>
This offering is primarily the result of a plan of acquisition, under
which we acquired all of the outstanding shares of QuickSilver. The general
effect of this acquisition is that QuickSilver became a wholly-owned
subsidiary of Zamba on September 22, 1998, pursuant to the reorganization
agreement outlined above. This offering also includes 1,000,000 Zamba shares
of common stock issuable upon conversion of the Series A Junior Participating
Preferred Stock. Upon approval of a listing by the Nasdaq National Market,
the common stock will be offered on that exchange, under the symbol "ZMBA."
The selling securityholders and any agents, broker-dealers or
underwriters that participate in the distribution of the common stock may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Act"), and any commission received by them and any profit on
the resale of the common stock purchased by them may be deemed to be
underwriting discounts or commissions under the Act. We have agreed to
indemnify the selling securityholders and certain other persons against
certain liabilities, including liabilities under the Act.
To comply with the securities laws of certain jurisdictions, the securities
offered in this prospectus will be offered or sold in those jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the securities offered in this prospectus may not be offered or
sold unless they have been registered or qualified for sale in those
jurisdictions, or unless an exemption from registration or qualification is
available and is complied with. The rights under this registration statement
and prospectus are assignable to the distributees, pledgees or other transferees
of the selling securityholders.
We will maintain the effectiveness of the registration statement until
the earlier of (i) such time as all of the Shares have been disposed of in
accordance with the intended methods of disposition set forth in the
registration statement, (ii) the date the common stock is eligible for sale
in its entirety within a 90 day period under Rule 144 of the SEC (assuming
compliance by the selling securityholders with the provisions thereof) or
(iii) two years after the effective date of this registration statement. In
the event that any shares remain unsold at the end of such period, we may
file a post-effective amendment to the registration statement for the purpose
of deregistering the shares of common stock.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby will be
passed upon for Zamba by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The financial statements and related financial statement schedule of
Zamba as of December 31, 1997 and 1996 and for each of the three years in the
period ended December 31, 1997 incorporated herein by reference from Zamba's
Annual Report on Form 10-K for the year ended December 31, 1997 have been
audited by PricewaterhouseCoopers LLP, independent accountants, as stated in
their report, which is incorporated herein by reference. The financial
statements of QuickSilver Group, Inc. as of December 27, 1996 and December
26, 1997, and for each of the two years in the period ended December 26, 1997
have been audited by PricewaterhouseCoopers LLP, independent accountants, as
stated in their report, which is incorporated herein by reference. These
financial statements and financial statement schedule have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
----------------------------
12
<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 offer
or solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such 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. The information in this prospectus is current only as of November 9,
1998
4,957,937 SHARES
ZAMBA CORPORATION
COMMON STOCK
-------------
PROSPECTUS
-------------
November 9, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the common stock being registered. All the amounts shown are estimates
except for the registration fee.
<TABLE>
<S> <C>
Registration fee . . . . . . . . . . . . . . . . . $2,383.74
Legal fees and expenses. . . . . . . . . . . . . . $25,000
Accounting Fees and Expenses . . . . . . . . . . . $10,000
Miscellaneous (NASDAQ listing fees, printer fees). $19,500
Total. . . . . . . . . . . . . . . . . . . . $56,883.74
-------------
-------------
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation includes a provision that eliminates
the personal liability of its directors for monetary damages for breach or
alleged breach of their duty of care, except for liability (i) for any breach of
the director's duty of loyalty to the corporation or its securityholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. In addition, as permitted by Section 145 of the
Delaware General Corporation Law, the Bylaws of the Registrant provide that (i)
the Registrant is required to indemnify its directors and officers and persons
serving in such capacities in other business enterprises (including, for
example, subsidiaries of the Registrant) at the Registrant's request to the
fullest extent permitted by the Delaware General Corporation Law including those
circumstances in which indemnification would otherwise be discretionary; (ii)
the Registrant may, in its discretion, indemnify employees and agents where
indemnification is not required by law; (iii) upon receipt of an undertaking by
the indemnitee to repay all amounts advanced and if it is ultimately determined
that such indemnitee is not entitled to indemnification, the Registrant is
required to advance expenses, as incurred, to its directors and officers in
connection with defending a proceeding; (iv) the rights conferred in the Bylaws
are not exclusive and the Registrant is authorized to enter into indemnification
agreements with its directors, officers and employees; and (v) the Registrant
may not retroactively amend the Bylaw provisions in a way that is adverse to
such directors, officers and employees.
The Registrant's policy is to enter into indemnification agreements with
each of its directors and executive officers that provide the maximum indemnity
allowed to directors and executive officers by Section 145 of the Delaware
General Corporation Law and the Registrant's Bylaws, as well as certain
procedural protections. In addition, the indemnification agreements provide
that directors and executive officers will be indemnified to the fullest
possible extent not prohibited by law against all expenses including attorneys'
fees and settlement amounts paid or incurred by them in any action or
proceeding, including any derivative action by or in the right of the
Registrant, on account of their services as directors or executive officers of
the Registrant or as directors or officers of any other company or enterprise
when they are serving in such capacities at the request of the Registrant. The
Registrant will not be obligated pursuant to the agreements to indemnify or
advance expenses to an indemnified party with respect to proceedings or claims
initiated by the indemnified party and not by way of defense, except with
respect to proceeds specifically authorized by the Board of Directors or brought
to enforce a right to indemnification under the indemnification agreement, the
Registrant's Bylaws or any statute or law. Under the agreements, the Registrant
is not obligated to indemnify the indemnified party (i) for any amounts paid in
settlement of a proceeding unless the Registrant consents to such settlement;
(ii) for any amounts paid in settlement of a proceeding unless the
II-1.
<PAGE>
Registrant consents in advance to such settlement; and (iii) if a final decision
by a court having jurisdiction in the matter shall determine that such
indemnification is not lawful.
The indemnification agreement requires a director or executive officer to
reimburse the Registrant for all expenses advanced only to the extent it is
ultimately determined that the director or executive officer is not entitled,
under Delaware law, the Registrant's Bylaws, the indemnification agreement or
otherwise to be indemnified for such expenses. The indemnification agreement
provides that it is not exclusive of any rights a director or executive officer
may have under the Certificate of Incorporation, the Registrant's Bylaws, other
agreements, any majority-in-interest vote of the securityholders or vote of
disinterested directors, Delaware law, or otherwise.
The indemnification provision in the Registrant's Bylaws, and the
indemnification agreements entered into between the Registrant and its directors
and executive officers, may be sufficiently broad to permit indemnification of
the officers and directors for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act").
The indemnification agreements require the Registrant to maintain director
and officer liability insurance to the extent reasonably available. As
authorized by the Registrant's Bylaws, the Registrant, with approval by the
Board, has purchased director and officer liability insurance.
ITEM 16. EXHIBITS.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney (see page II-4).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 15, or otherwise, the registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period during 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 Act;
II-2.
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or any 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 end
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) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(2) That, for purposes of determining liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities to be offered therein, and the offering of such
securities at that time shall be deemed to be an initial BONA FIDE offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which shall remain unsold at the
termination of the offering.
II-3.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis, State of Minnesota, on the 6th day of
November 1998.
ZAMBA CORPORATION
By /s/Paul Edelhertz
--------------------------------
Paul Edelhertz
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul Edelhertz and Ian Nemerov, or
either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitutes or substitute, may lawfully do or cause to be done
by virtue hereof.
II-4.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/Paul Edelhertz President and Chief Executive November 6, 1998
- -----------------------
Paul Edelhertz Officer and Director (Principal
Executive Officer)
/s/Michael H. Carrel Chief Financial Officer November 6, 1998
- -----------------------
Michael H. Carrel (Principal Financial
and Accounting Officer)
/s/Michael A. Fabiaschi Director November 6, 1998
- -----------------------
Michael A. Fabiaschi
/s/Joseph B. Costello Director November 6, 1998
- -----------------------
Joseph B. Costello
/s/Dixon R. Doll Director November 6, 1998
- -----------------------
Dixon R. Doll
/s/Thomas Minick Director November 6, 1998
- -----------------------
Thomas Minick
II-5.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- --------- -----------
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1
24.1 Power of Attorney (Reference is made to page II-4)
<PAGE>
EXHIBIT 5.1
November 6, 1998
Zamba Corporation
7301 Ohms Lane, Suite 200
Minneapolis, MN 55439
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Zamba Corporation (the "Company") of a Registration
Statement on Form S-3 on or about November 6, 1998 (the "Registration
Statement") with the Securities and Exchange Commission covering the offering
for resale of 4,957,937 shares of the Common Stock, par value $0.01 per
share, of the Company (the "Common Stock"), 2,337,992 of which are held by
certain of the Selling Security holders and were issued pursuant to the
Agreement and Plan of Reorganization, dated as of July 6, 1998, as amended,
(the "Reorganization Agreement"), among the Company, QuickSilver Acquisition
Corp., QuickSilver Group, Inc. and the former shareholders of QuickSilver
Group, Inc. (the "Reorganization Shares"). The Registration Statement also
covers the common stock issuable in the event the holders request, and the
Company consents to the conversion of $2,161,674.82 in Promissory Notes (the
"Notes"), granted pursuant to the Reorganization Agreement, to Common Stock
(the "Note Shares"). In addition, the Registration Statement covers 462,247
shares of Common Stock (the "Warrant Shares") issuable upon exercise of
warrants held by Petra Capital, LLC pursuant to the Reorganization Agreement
(the "Warrants"), and 1,000,000 shares of Common Stock (the "Conversion
Shares") issuable to Joseph Costello upon conversion of the Company's Series
A Junior Participating Preferred Stock (the "Preferred Stock").
In connection with this opinion, we have examined the Registration Statement
and related Prospectus, the Company's Third Amended and Restated Certificate
of Incorporation, as amended, and Bylaws, as amended, and such other
documents, records, certificates, memoranda and other instruments as we deem
necessary as a basis for this opinion. We have assumed the genuineness and
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and delivery are
a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that (i) the Reorganization Shares have been validly issued, and are fully
paid and nonassessable and (ii) the Warrant Shares, the Conversion Shares and
the Note Shares, when issued and sold after exercise or conversion of the
Warrants, the Preferred Stock or the Notes, pursuant to the respective terms
thereof, will be validly issued, fully paid, and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD LLP
/s/ Michael J. Sullivan
- --------------------------
Michael J. Sullivan
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated January 12, 1998, on our audits of the financial
statements and financial statement schedule of Zamba Corporation, formerly known
as Racotek, Inc. (the Company), as of December 31, 1997 and 1996, and for each
of the three years in the period ended December 31, 1997, which report is
included in the Company's 1997 Annual Report on Form 10-K, and our report dated
August 14, 1998, except for the sixth paragraph of Note 13 as to which the date
is September 22, 1998, of our audits of the financial statements of QuickSilver
Group, Inc., as of December 27, 1996 and December 26, 1997, and for each of the
two years in the period ended December 26, 1997, which report is included in the
Company's Form 8-K dated October 7, 1998. We also consent to the reference to
our firm under the caption "Experts."
/s/ PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
November 6, 1998
