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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 2000
REGISTRATION STATEMENT NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ZAMBA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 41-1636021
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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)
------------------------
PAUL EDELHERTZ
PRESIDENT AND CEO
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)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.
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. [ ] 333- .
<PAGE>
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. [ ] 333- .
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 200,000 $14.75(1) $2,950,000(1) $1,017.24
par value per share
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon the average of the high
and low prices on the Nasdaq National Market on March 6, 2000.
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),
SHALL DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED 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.
SUBJECT TO COMPLETION, DATED MARCH 8, 2000
PROSPECTUS
ZAMBA CORPORATION
7301 OHMS LANE, SUITE 200
MINNEAPOLIS, MINNESOTA 55439
(612) 832-9800
200,000 SHARES OF COMMON STOCK
In December 1999, Zamba Corporation issued 1,000,000 shares of common
stock to the former stockholders of Camworks, Inc. in connection with our
acquisition of that company. This prospectus relates to resales of some of those
shares by certain former stockholders of Camworks, Inc. We will not receive any
of the proceeds from the sale of the shares.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the selling stockholders for brokerage,
accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the shares. We will bear all other costs, fees and
expenses incurred in effecting the registration of the shares covered by this
prospectus, including, without limitation, all registration and filing fees,
Nasdaq listing fees and fees and expenses of our counsel and our accountants.
The selling stockholders, or their pledgees, donees, transferees or
other successors-in-interest, may offer the shares from time to time through
public or private transactions at prevailing market prices, at prices related to
prevailing market prices or at privately negotiated prices. Our common stock is
traded on the Nasdaq National Market under the symbol ZMBA. On March 6, 2000,
the closing sale price of our common stock on Nasdaq was $14.75 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is March 8, 2000.
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TABLE OF CONTENTS
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PAGE
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WHERE TO FIND MORE INFORMATION...........................................................................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..........................................................3
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION.......................................................4
RISK FACTORS.............................................................................................5
SUMMARY DESCRIPTION OF OUR BUSINESS.....................................................................11
USE OF PROCEEDS.........................................................................................11
THE CAMWORKS ACQUISITION................................................................................11
SELLING STOCKHOLDERS....................................................................................12
PLAN OF DISTRIBUTION....................................................................................13
LEGAL MATTERS...........................................................................................14
EXPERTS.................................................................................................14
</TABLE>
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THE SELLING
STOCKHOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF OUR
COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS
PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE
OF COMMON STOCK.
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WHERE TO FIND MORE INFORMATION
We file reports, proxy statements, and other documents with the
Securities and Exchange Commission and with Nasdaq. Here are ways you can access
this information:
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<CAPTION>
WHAT IS AVAILABLE WHERE TO GET IT
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<S> <C>
Paper copies of information SEC's Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
The Nasdaq Stock Market, Inc.
1735 K Street, N.W.
Washington, D.C. 20006
On-line information SEC's Internet website at
http://www.sec.gov
Information about the Call the SEC at
SEC's Public Reference Room 1-800-SEC-0330
</TABLE>
This prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
prospectus regarding us and our common stock, including certain exhibits and
schedules. You can obtain a copy of the registration statement from the sources
listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information
that we file with the SEC in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus. Information contained in this prospectus and information
that we file with the SEC in the future and incorporate by reference in this
prospectus automatically updates and supercedes previously filed information. We
are incorporating 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 prior to the sale of all the shares covered by this
prospectus:
(i) Our Annual Report on Form 10-K for the year ended December 31,
1999, filed with the SEC on March 8, 2000;
(ii) Our Current Reports on Form 8-K, filed with the SEC on
January 12, 2000, (as amended by Form 8K/A filed on March 3,
2000) and on January 21, 2000;
(iii) All of our filings pursuant to the Exchange Act after the date
of filing the initial registration statement and prior to
effectiveness of the registration statement; and
(iv) The description of our common stock contained in our
Registration Statement on Form 8-A, filed with the SEC on
October 25, 1993.
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You may request a copy of these documents, which will be provided to
you at no cost, by contacting:
ZAMBA CORPORATION
7301 OHMS LANE, SUITE 200
MINNEAPOLIS, MINNESOTA 55439
ATTENTION: INVESTOR RELATIONS
(612) 832-9800
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus contains or incorporates "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. You can identify these forward-looking
statements by our use of the words "believes," "anticipates," "plans,"
"expects," "may," "will," "would," "intends," "estimates" and similar
expressions, whether in the negative or affirmative. We cannot guarantee that we
actually will achieve these plans, intentions or expectations. Actual results or
events could differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements that we make. We have included
important factors in the cautionary statements contained or incorporated by
reference in this prospectus, particularly under the heading "Risk Factors" that
we believe could cause actual results to differ materially from the
forward-looking statements that we make. We do not assume any obligation to
update any forward-looking statements that we make.
When used in this prospectus, the words "may," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "intends,"
"potential," or "continue" and similar expressions are generally intended to
identify forward-looking statement. Because these forward-looking statements
involve risks and uncertainties, actual results could differ materially from
those expressed or implied by these forward-looking statements. We assume no
obligation to update any forward-looking statements. These statements are only
predictions. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, and/or performance of achievements.
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RISK FACTORS
You should carefully consider the risks described below before you
decide to buy our common stock. The risks and uncertainties described below are
not the only ones facing our company. Additional risks and uncertainties may
also impair our business operations. If any of the following risks actually
occur, our business, financial condition, or results of operations would likely
suffer. In such case, the trading price of our common stock could fall, and you
may lose all or part of the money you paid to buy our common stock.
WE MAY NOT BE ABLE TO MANAGE GROWTH SUCCESSFULLY
Our growth has placed significant demands on our management and other
resources. Our revenues increased approximately 202% in 1999 from $9.4 million
in 1998 to $28.3 million in 1999. Our staff increased from 95 full-time
employees at January 1, 1999, to 185 at January 1, 2000. Our future success will
depend on our ability to manage our growth effectively, including by:
- Developing and improving our operational, financial and other
internal systems;
- Integrating and managing acquired businesses, joint ventures
and strategic investments;
- Training, motivating and managing our employees;
- Estimating fixed-price fees and project timeframes accurately;
- Maintaining high rates of employee utilization; and
- Maintaining project quality and client satisfaction.
Our management has limited experience managing a business of Zamba's
current size. If we are unable to manage our growth and projects effectively,
the quality of our services and products, our ability to retain key personnel
and our business, financial condition and results of operations may be
materially adversely affected.
THE FOCUS OF OUR BUSINESS MAY NOT RECEIVE MARKET ACCEPTANCE
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,.results of operations and cash flows.
The technology consulting industry in general presents several risks,
many of which are outside of our control. As the market changes, we will need to
constantly redefine our company, which 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.
WE MAY FAIL TO SUCCESSFULLY COMPLETE AND INTEGRATE COMPANIES THAT WE ACQUIRE
On December 29, 1999, we acquired Camworks, Inc. ("Camworks") and on
January 10, 2000, we acquired Fusion Consulting, Inc. ("Fusion"). Integrating
Camworks and Fusion will be a complex, time-consuming and expensive process.
Before the acquisitions, Camworks and Fusion operated independently,
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each with its own business, business culture, clients, employees and systems.
After the merger, Camworks and Fusion must operate together with Zamba 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
Camworks and Fusion. 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;
- 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; and
- Potential inability to obtain consents of third parties
required because of the merger.
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 successfully integrate Camworks and Fusion into Zamba would have
a material adverse effect on our business, financial condition and results of
operations.
We could also experience financial or other setbacks if any of the
acquired businesses experienced problems in the past of which our management
does not yet know. For example, if an acquired business had dissatisfied
customers or had any performance problems, our reputation could suffer as a
result of our association with that business. We are not aware of any material
legal claims against the acquired companies. However, to the extent any customer
or other third party asserts any material legal claims against any of the
acquired companies, our business, financial condition, results of operations and
cash flows could suffer material harm.
FAILURE TO QUALIFY FOR POOLING-OF-INTERESTS ACCOUNTING TREATMENT FOR
ACQUISITIONS MAY HARM OUR FUTURE OPERATING RESULTS.
The acquisitions of Camworks and Fusion were accounted for under the
"pooling-of-interests" accounting treatment under U.S. generally accepted
accounting principles. Under pooling-of-interests accounting treatment, the
accounts of Camworks and Fusion will be combined with those of Zamba at their
historical carrying amounts, and Zamba's financial statements for all prior
periods will be restated to reflect its accounts as if Camworks and Fusion had
been combined for all periods.
If events subsequently occur that cause either of the mergers to no
longer qualify for pooling-of-interests accounting treatment, the purchase
method of accounting would apply. Under that method, we would record the
estimated fair value of our common stock issued in the mergers as the cost of
acquiring the businesses of Camworks or Fusion. That cost would be allocated to
the individual assets acquired and liabilities assumed according to their
respective fair values, with the excess of the estimated fair value of our
common stock over the fair value of net tangible and intangible assets acquired
recorded as goodwill, to be amortized over its estimated useful life. The
estimated fair value of our common stock issued in the mergers is much more than
the historical net book value at which Camworks and Fusion carried their assets
in their accounts. Therefore, purchase accounting treatment could have a
material adverse effect on the reported operating results of the combined
company compared to pooling-of-interests accounting treatment.
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WE NEED TO ATTRACT AND RETAIN QUALITY EMPLOYEES IN ORDER TO CONTINUE OUR GROWTH
Our business is labor-intensive and requires highly skilled employees.
Most of our consultants possess extensive expertise in information technology,
strategy, project management, sales and marketing fields. To serve a growing
client base, we must continue to recruit and retain qualified personnel with
expertise in each of these areas. 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. In addition, the Internet has created many
opportunities for people with the skills we seek to form their own companies or
join startup companies and these opportunities frequently offer the potential
for significant future financial profit through equity incentives which we
cannot match. 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, results of operations and cash flows could be adversely affected.
OUR OPERATING RESULTS MAY FLUCTUATE
A high percentage of our operating expenses, particularly personnel and
rent, are fixed in advance of any particular quarter. As a result, unanticipated
variations in the number, or progress toward completion, of our projects may
cause significant variations in operating results in any particular quarter and
could result in losses for that quarter. 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;
- The contractual terms and timing of completion of projects;
- Any delays incurred in connection with projects;
- The accuracy of our estimates of resources required to
complete projects;
- Uncertainty and changes in our sales cycle;
- The adequacy of provisions for losses;
- Costs of obtaining or losing customers and accounts;
- Increased competition and pricing pressures; and
- Changes in our or our competitor's business strategy, pricing
and billing policies.
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, results of operations, cash flows and the market
price of our common stock.
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WE FACE RISKS FROM OUR FIXED-PRICE, FIXED-TIMEFRAME BUSINESS MODEL
Most of our projects are performed on fixed-price, fixed-timeframe
contracts, rather than contracts in which payment to us is determined on a time
and materials basis. If we don't accurately estimate the resources required for
a project or fail to complete our contractual obligations in a manner consistent
with the project plan upon which our fixed-price, fixed-timeframe contract was
based, our overall profitability and our business, financial condition, results
of operations and cash flows could be adversely affected. We have been required
to commit unanticipated additional resources to complete projects in the past,
which has resulted in losses on those contracts. We recognize that we will
experience similar situations in the future and that the consequences could be
more severe than in the past due to the increased size and complexity of our
solutions. In addition, for some projects we may fix the price at an early stage
of the process, which could result in a fixed price that turns out to be too low
and therefore would adversely affect our profitability.
OUR REVENUES ARE DIFFICULT TO PREDICT BECAUSE THEY ARE GENERATED ON A PROJECT-
BY-PROJECT BASIS.
We derive our revenues primarily from fees for services generated on a
project-by-project basis. These projects vary in size and scope. Therefore, a
client that accounts for a significant portion of our revenues in a given period
may not generate a similar amount of revenues, if any, in subsequent periods. In
addition, after we complete a project, we can have no assurance that the client
will retain us in the future.
We have clients who may terminate their agreements with us, whether
time and materials or fixed-fee based, without any prior written notice. We
cannot give any assurances that a client will not terminate a project before its
completion. If our clients terminate existing agreements, our business,
financial condition, results of operations and cash flows could suffer material
harm.
THE LOSS OF A SIGNIFICANT CLIENT COULD IMPACT OUR OPERATIONS
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 that 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, results of operations and cash flows.
In the course of providing services, we may 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, results of
operations and cash flows. Our inability to obtain new clients or large-scale
implementation and integration projects could materially and adversely affect
the growth of our business.
WE ARE IN A COMPETITIVE MARKET
We compete in the information technology services market, which is
relatively new and intensely competitive. We expect competition to continue to
intensify as the market evolves. We compete with the following kinds of
companies:
. Internet service firms;
. Technology consulting firms;
. Technology integrators;
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. strategic consulting firms;
- The consulting divisions of "Big 5" accounting firms; and
. In-house information technology departments of our clients and
potential clients.
Many of our competitors have longer operating histories, larger client
bases, longer relationships with clients, greater brand or name recognition and
significantly greater financial, technical, marketing and public relations
resources than we have.
Relatively few barriers prevent competitors from entering the
information technology services market. As a result, new market entrants pose a
threat to our business. We do not own any patented technology that prevents or
discourages competitors from entering the information technology services
market. Existing or future competitors may develop or offer services that are
comparable or superior to ours at a lower price, which could materially harm our
business, results of operations and financial condition.
We believe that establishing and maintaining a good reputation and name
recognition is critical for attracting and expanding our targeted client base.
We also believe that the importance of reputation and name recognition will
increase due to the growing number of information technology service providers.
If our reputation is damaged or if potential clients do not know what services
we provide, we may become less competitive or lose our market share. Promotion
and enhancement of our name will depend largely on our success in providing high
quality services and digital communications solutions, which we cannot ensure.
If clients do not perceive our services to be effective or of high quality, our
brand name and reputation could be harmed and materially adversely affect our
business, financial condition, results of operations and cash flows.
WE NEED TO KEEP PACE WITH TECHNOLOGICAL CHANGES
Our markets and the technologies used in our solutions are
characterized by rapid technological change. Failure to respond in a timely and
cost-effective way to these technological developments would have a material
adverse effect on our business, financial condition, results of operations and
cash flows. We expect to derive a substantial portion of our revenues from
providing ecommerce and customer care solutions that are based upon leading
technologies and that are capable of adapting to future technologies. As a
result, our success will depend on our ability to offer services that keep pace
with continuing changes in technology, evolving industry standards and changing
client preferences. We may not be successful in addressing future developments
on a timely basis. Our failure to keep pace with the latest technological
developments would have a material adverse effect on our business, financial
condition, results of operations and cash flows.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL CAPITAL
We rely on a combination of copyright, trade secret and trademark laws,
and third party nondisclosure agreements to protect our intellectual property
rights. 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.
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.
WE MAY NOT BE ABLE TO REUSE TECHNOLOGY THAT WE DEVELOP FOR SPECIFIC CLIENTS
A portion of our business involves the development of technology
solutions for specific client engagements. Ownership of these solutions is the
subject of negotiation and is frequently assigned to the client, although we may
retain a license for certain uses. Some clients have prohibited us from
marketing the applications developed for them for specified periods of time or
to specified third parties and there can
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be no assurance that clients will not demand similar or other restrictions in
the future. Issues relating to the ownership of and rights to use solutions can
be complicated and there can be no assurance that disputes will not arise that
affect our ability to resell or reuse these solutions. Any limitation on our
ability to resell or reuse a solution could require us to incur additional
expenses to develop new solutions for future projects.
ALTHOUGH WE PASSED THE YEAR 2000 DATE CHANGEOVER WITHOUT PROBLEMS, SUBSEQUENT
EVENTS COULD RESULT IN PROBLEMS SIMILAR TO THOSE ANTICIPATED FOR THE 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 reviewed our internal computer systems and legacy proprietary
hardware and software products that could be affected by the Year 2000 Issue.
Based on this review, technology changes for potential Year 2000 issues did not
have a material impact on our operations. However, if future defects arise
because of factors not revealed during our review and testing, including future
events that may impact our vendors or other third parties with which we conduct
business, our business, financial condition and results of operations may be
materially adversely affected.
OUR STOCK PRICE IS VOLATILE
Technology companies, including Zamba, frequently experience volatility
in their common stock prices. Factors creating such volatility include:
- Quarterly fluctuations in results of operations and
achievement of key business metrics;
- Changes in earnings estimates by securities analysts;
- Announcements of technological innovations or the introduction
of new products;
- Market reaction to any acquisitions, joint ventures or
strategic investments announced by us or our competitors; and
- 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.
In the past, securities class action litigation has often been
instituted against companies following periods of volatility in the market price
of their securities. This type of litigation could result in substantial costs
and a diversion of management attention and resources.
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SUMMARY DESCRIPTION OF OUR BUSINESS
ZAMBA is a national customer care consulting company. According to the
Gartner Group, customer care is expected to grow at a cumulative average growth
rate of 54% per year through 2002. 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 communication with
customers. We deliver our services using a unique combination of accumulated
expertise in the customer care field, existing technology, and client knowledge.
Typically, we perform our services on a fixed-bid, fixed-timetable basis. Rapid
development and significant client involvement are key aspects to our
methodologies. We offer our clients end-to-end assistance with their
implementations, including business case evaluation, system planning and design,
software implementation, modification and development, training, installation,
change management, network management, and post-implementation support. Our
services include the design, implementation and integration of enterprise level
applications to facilitate sales automation, call center management, marketing
automation and automated field service and sales. We also own approximately 35%
of the equity in NextNet, Inc., a private corporation engaged in the development
of wireless data products targeted at wireless DSL. The chairman of ZAMBA,
Joseph B. Costello, is also the chairman of NextNet.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholders.
THE CAMWORKS ACQUISITION
We acquired all of the outstanding common stock of Camworks on December
29, 1999 through a merger agreement. On that date, the operations of Camworks
were combined with those of Zamba. The acquisition of Camworks has been treated
as a "tax-free reorganization" for U.S. federal income tax purposes and has been
accounted for as a pooling-of-interests for financial reporting purposes under
U.S. GAAP.
In exchange for the Camworks stock, we issued an aggregate of 1,000,000
shares of Zamba common stock, which were valued at approximately $18.9 million
based on the last sale price of Zamba common stock on the Nasdaq National Market
on December 29, 1999. 100,000 of the shares were placed in escrow to secure the
indemnification obligations of certain of the selling stockholders.
We agreed to use our best efforts to register 200,000 of the shares for
resale by the former Camworks stockholders following the acquisition.
11
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth, to our knowledge, certain information
about the selling stockholders as of March 8 2000.
Beneficial ownership is determined in accordance with the rules of the
SEC, and includes voting or investment power with respect to shares. Unless
otherwise indicated below, to our knowledge, all persons named in the table have
sole voting and investment power with respect to their shares of common stock,
except to the extent authority is shared by spouses under applicable law. The
inclusion of any shares in this table does not constitute an admission of
beneficial ownership for the person named below.
<TABLE>
<CAPTION>
------------------- ----------------- ---------------- ----------------- ----------------- -----------------
Number of Percentage of Number of Percentage of
Shares of Shares of Shares of Shares of
Common Stock Common Stock Number of Common Stock Common Stock
Beneficially Beneficially Shares of Beneficially Beneficially
Name of Selling Owned Prior to Owned Prior to Common Stock Owned After Owned After
Stockholder Offering (1) Offering (1) Offered Hereby Offering (1) (2) Offering (1) (2)
------------------- ----------------- ---------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Tim Cameron 558,000 1.78 111,600 446,400 1.42
------------------- ----------------- ---------------- ----------------- ----------------- -----------------
Paul Lundberg 372,000 1.19 74,400 297,600 *
------------------- ----------------- ---------------- ----------------- ----------------- -----------------
Scott Owens 70,000 * 14,000 56,000 *
------------------- ----------------- ---------------- ----------------- ----------------- -----------------
</TABLE>
* Less than one percent of the number of shares of common stock outstanding.
(1) The selling stockholders have sole voting power and investment
power with respect to all shares listed as owned by the selling stockholders. Of
the total shares of common stock listed as owned by the selling stockholders, a
total of 100,000 shares are held in an escrow account to secure indemnification
obligations of certain of the former stockholders of Camworks to us. It is
expected that these shares (less any shares that may be distributed from the
escrow account to us in satisfaction of indemnification claims) will be released
from escrow and distributed to such selling stockholders on March 31, 2001. The
number of shares indicated as owned by each such selling stockholder includes
those shares (representing 10% of the number of shares listed as beneficially
owned by each selling stockholder) which such selling stockholder is entitled to
receive upon distribution of these shares from the escrow account. The
stockholders are under lock-up agreements that restrict the sale of their
remaining shares. The restrictions under the lock-up agreements are released
with regard to 25% of each of the remaining shares on March 31, 2001, June 30,
2001, September 30, 2001, and December 31, 2001.
(2) We do not know when or in what amounts a selling stockholder may
offer shares for sale and there can be no assurance that the selling
stockholders will sell any or all of the shares offered hereby. Because each
selling stockholder may offer all or some of the shares pursuant to this
offering, and because there are currently no agreements, arrangements or
understandings with respect to the sale of any of the shares that will be held
by the selling stockholders after completion of the offering, no estimate can be
given as to the amount of the shares that will be held by the selling
stockholders after completion of the offering. However, for purposes of this
table, we have assumed that, after completion of the offering, none of the
shares covered hereby will be held by the selling stockholders.
None of the selling stockholders has held any position or office with,
or has otherwise had a material relationship with, us or any of our subsidiaries
within the past three years, except that the selling stockholders have been
employed by us and/or Camworks. In connection with our acquisition of Camworks,
we also entered into employment letters with Tim Cameron, Paul Lundberg, and
Scott Owens, each a former employee of Camworks. The employment relationships
with Mr. Cameron and Mr. Lundberg are for terms of two years, and the employment
relationship with Mr. Owens is for a term of one year. In connection with the
merger agreement, certain of the selling stockholders also entered into
non-competition agreements with Zamba, and we lent to the selling stockholders
funds to facilitate the payment of taxes by such selling stockholders.
12
<PAGE>
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time
to time by the selling stockholders. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. Such sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. The selling stockholders may sell their shares by
one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- block trades in which the broker-dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
- an over-the-counter distribution in accordance with the rules
of the Nasdaq National Market;
- in privately negotiated transactions; and
- in options transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 may
be sold under Rule 144 rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the shares or otherwise, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders may also sell the common stock short and redeliver the
shares to close out such short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The selling
stockholders may also pledge shares to a broker-dealer or other financial
institution, and, upon a default, such broker-dealer or other financial
institution, may effect sales of the pledged shares pursuant to this prospectus
(as supplemented or amended to reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling
stockholders and any broker-dealers who execute sales for the selling
stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. Any profits realized by the
selling stockholders and the compensation of any broker-dealer may be deemed to
be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
13
<PAGE>
We have advised the selling stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholders to keep the Registration
Statement of which this prospectus constitutes a part effective until the
earlier of (i) such time as all of the shares covered by this prospectus have
been disposed of pursuant to and in accordance with the Registration Statement
or (ii) December 28, 2000.
LEGAL MATTERS
Leonard, Street and Deinard Professional Association has passed on the
validity of the issuance of the shares offered by this prospectus.
EXPERTS
The consolidated financial statements of ZAMBA Corporation as of
December 31, 1999 and 1998, and for each of the years in the three-year period
ended December 31, 1999, which are incorporated by reference in this prospectus,
have been audited by KPMG LLP, independent auditors, as set forth in their
report thereon, which as to the year 1997 is based in part on the report of
PricewaterhouseCoopers LLP, independent auditors. The financial statements
referred to above are incorporated herein by reference in reliance upon these
reports given upon the authority of the firms as experts in accounting and
auditing.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by the Registrant (except expenses incurred
by the selling stockholders for brokerage, accounting, tax or legal services or
any other expenses incurred by the selling stockholders in disposing of the
shares). All amounts shown are estimates except the Securities and Exchange
Commission registration fee.
Filing Fee -- Securities and Exchange Commission............ $3,000
Legal fees and expenses of the Company...................... $3,000
Accounting fees and expenses................................ $3,000
Miscellaneous expenses...................................... $3,000
Total Expenses.................................... $12,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
Article 5 of the Registrant's Fourth Amended and Restated Certificate
of Incorporation provides that a director or officer of the Registrant (a) shall
be indemnified by the Registrant against all expenses (including attorney's
fees), judgments, fines and amounts paid in settlement reasonably incurred in
connection with any litigation or other legal proceeding (other than an action
by or in the right of the Registrant) brought against him by virtue of his
position as a director or officer if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, and (b) shall be
indemnified by the Registrant against expenses (including attorney's fees) and
amounts paid in settlement reasonably incurred in connection with any action by
or in the right of the Registrant by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Registrant, except that no indemnification shall be made with respect to any
such matter as to which such director or officer shall have been adjudged to be
liable to the Registrant, unless and only to the extent that a court determines
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise, he
shall be indemnified against all expenses (including attorney's fees) reasonably
incurred by him in connection therewith. Expenses incurred in defending a civil
or criminal action, suit or proceeding shall be advanced by the Registrant to a
director or officer, at his request, upon receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that he
is not entitled to indemnification.
Indemnification is required to be made unless the Registrant determines
(in the manner provided in its Amended and Restated Certificate of
Incorporation) that the applicable standard of conduct required for
indemnification has not been met. In the event of a determination by the
Registrant that the director or
II-1
<PAGE>
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition a court to make an independent determination as to whether
such person is entitled to indemnification. As a condition precedent to the
right of indemnification, the director or officer must give the Registrant
notice of the action for which indemnity is sought and the Registrant has the
right to participate in such action or assume the defense thereof.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
5.1 Opinion of Leonard, Street and Deinard Professional Association
23.1 Consent of KPMG LLP.
23.2 Consent of PricewaterhouseCoopers, LLP
23.3 Consent of Leonard, Street and Deinard Professional Association, included in
Exhibit 5.1 filed herewith.
24.1 Power of Attorney (See page II-4 of this Registration
Statement).
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement.
provided, however, that paragraphs (i) and (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 Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities
II-2
<PAGE>
offered therein and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the indemnification provisions described herein, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the 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
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 this 8th day of
March, 2000.
ZAMBA CORPORATION
By: /s/ Paul D. Edelhertz
---------------------
Name: Paul D. Edelhertz
Title: President and Chief Executive Officer
By: /s/ Michael H. Carrel
---------------------
Name: Michael H. Carrel
Title: Vice President and Chief Financial Officer
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Zamba Corporation, hereby
severally constitute and appoint Paul D. Edelhertz our true and lawful attorney
with full power to sign for us and in our names in the capacities indicated
below the Registration Statement on Form S-3 filed herewith and any and all
pre-effective and post-effective amendments to said Registration Statement and
generally to do all such things in our name and behalf in our capacities as
officers and directors to enable Zamba Corporation to comply with the provisions
of the Securities Act of 1933 and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys, or any of them, to said Registration Statement
and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Paul D. Edelhertz President and Chief Executive Officer March 8, 2000
- ------------------------------------ and Director
Paul D. Edelhertz
/s/ Michael H. Carrel Vice President and Chief Financial March 8, 2000
- ------------------------------------ Officer
Michael H. Carrel
/s/ Joseph B. Costello Director March 8, 2000
- ------------------------------------
Joseph B. Costello
/s/ Dixon R. Doll Director March 8, 2000
- ------------------------------------
Dixon R. Doll
/s/ Michael A. Fabiaschi Director March 8, 2000
- ------------------------------------
Michael A. Fabiaschi
/s/ Sven A. Wehrwein Director March 8, 2000
- ------------------------------------
Sven A. Wehrwein
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
5.1 Opinion of Leonard, Street and Deinard, Professional Association.
23.1 Consent of KPMG LLP.
23.2 Consent of Pricewaterhouse Coopers, LLP
23.3 Consent of Leonard, Street and Deinard Professional Association,
included in Exhibit 5.1 filed herewith.
24.1 Power of Attorney (See page II-4 of this Registration
Statement).
</TABLE>
<PAGE>
EXHIBIT 5.1
LEONARD STREET AND DEINARD PROFESSIONAL ASSOCIATION
[LOGO]
March 8, 2000
Zamba Corporation
7301 Ohms Lane
Suite 200
Minneapolis, MN 55439
Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), for the registration of an aggregate
of 200,000 of Common Stock, $.01 par value per share (the "Shares"), of Zamba
Corporation, a Delaware corporation (the "Company"). All of the Shares are being
registered on behalf of certain stockholders of the Company (the "Selling
Stockholders").
We are acting as counsel for the Company in connection with the
registration for resale of the Shares. We have examined signed copies of the
Registration Statement as filed with the Commission. We have also examined and
relied upon the minutes of meetings of the stockholders and the Board of
Directors of the Company as provided to us by the Company, stock record books of
the Company as provided to us by the Company, the Certificate of Incorporation
and By-Laws of the Company, each as restated and/or amended to date, and such
other documents as we have deemed necessary for purposes of rendering the
opinions hereinafter set forth.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as copies, the authenticity of the originals of such latter documents and the
legal competence of all signatories to such documents.
We assume that the appropriate action will be taken, prior to the offer
and sale of the Shares, to register and qualify the Shares for sale under all
applicable state securities or "blue sky" laws.
We express no opinion herein as to the laws of any state or
jurisdiction other than the state laws of the State of Minnesota, the Delaware
General Corporation Law statute and the federal laws of the United States of
America.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and are validly issued, fully paid and
nonassessable.
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is in
effect.
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
<PAGE>
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our
name therein and in the related Prospectus under the caption "Legal Matters." In
giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ LEONARD STREET AND DEINARD PROFESSIONAL ASSOCIATION
-------------------------------------------------------
LEONARD STREET AND DEINARD PROFESSIONAL ASSOCIATION
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Zamba Corporation:
We consent to the use of our reports incorporated by reference and to the
reference to our firm under the heading "Experts" in the Prospectus. Our report
with respect to the 1997 financial statements is based in part on the report of
other auditors.
/s/ KPMG LLP
Minneapolis, Minnesota
March 8, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 12, 1998 relating to the
statements of operations and cash flows, and the financial statement schedule,
before restatement for the 1999 pooling-of-interests, which appears in Zamba
Corporation's, formerly Racotek, Inc., Annual Report on Form 10-K for the year
ended December 31, 1999. We also consent to the reference to our firm under the
heading "Experts" in such Registration Statement
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
March 8, 2000
