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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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QRS CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 7370 68-0102251
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
1400 MARINA WAY SOUTH
RICHMOND, CALIFORNIA 94804
(510) 215-5000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
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SHAWN M. O'CONNOR
PRESIDENT AND CHIEF OPERATING OFFICER
QRS CORPORATION
1400 MARINA WAY SOUTH
RICHMOND, CALIFORNIA 94804
(510) 215-5000
(Name, address, including zip code, and telephone number, including
area code, of agent for service of process)
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Copies to:
RONALD B. MOSKOVITZ, ESQ.
ELIZABETH H. LEFEVER, ESQ.
MARTHA O. O'MALLEY, ESQ.
BROBECK, PHLEGER & HARRISON LLP
ONE MARKET
SPEAR STREET TOWER
SAN FRANCISCO, CALIFORNIA 94105
(415) 442-0900
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE 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 a 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. / /
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
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE (1) REGISTRATION FEE
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common stock, no par value.................. 53,250 shares $46.657 $2,484,485.25 $690.69
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(1) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) under the
Securities Act of 1933 and based upon the average of the high and low prices of the Company's Common Stock as reported on the
Nasdaq National Market on August 19, 1999.
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 THE REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
THE INFORMATION IS THIS PRELIMINARY 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 PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OF SALE IS NOT
PERMITTED.
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Subject to Completion, dated August __, 1999
PROSPECTUS
53,250 SHARES
[LOGO]
QRS CORPORATION
COMMON STOCK
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This prospectus relates to the public offering, which is not being
underwritten, of 53,250 shares of our common stock which is held by one of our
current stockholders. All of the 53,250 shares which may be offered hereby were
received by the selling stockholder in connection with our acquisition of all
the outstanding capital stock of Retail Data Services, Inc.
The prices at which such stockholder may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares. We have agreed to bear certain expenses in connection with the
registration of the shares being offered and sold by the stockholder hereby.
Our common stock is quoted on the Nasdaq National Market under the
symbol QRSI. On August 20, 1999, the closing price for the common stock was
$47.
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INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities nor
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
The date of this prospectus is August __, 1999.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from the SEC's web site at http://www.sec.gov.
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 later information
filed with the SEC will update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the
SEC under Section 13a, 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 until our offering is completed.
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 filed with the SEC on March 24, 1999;
(b) All other reports filed pursuant to 13(a) or 15(d) since
the end of the latest fiscal year for which a 10-K has been filed; and
(c) The Registration Statement on Form 8-A filed with the SEC
on June 18, 1993 pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), in which there is described the terms, rights and
provisions applicable to our outstanding common stock.
You may request a copy of these filings, at no cost, by
writing or telephoning us at the following address:
Peter Papano
Chief Financial Officer and Secretary
QRS Corporation
1400 Marina Way South
Richmond, CA 94804
(510) 215-5000
You should rely only on the information incorporated by reference
or provided in this prospectus or the prospectus supplement. We have
authorized no one to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or
the prospectus supplement is accurate as of any date other than the date on
the front of the document.
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QRS CORPORATION
QRS Corporation ("QRS", "We", "Our", "Us") principal executive
offices are located at 1400 Marina Way South, Richmond, California 94804.
QRS' telephone number is (510) 215-5000.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE
MAKING AN INVESTMENT DECISION. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW
ARE NOT THE ONLY ONES FACING US. ADDITIONAL RISKS AND UNCERTAINTIES NOT
PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR
OUR BUSINESS OPERATIONS. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR
BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY
ADVERSELY AFFECTED. IN SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD
DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
THIS PROSPECTUS ALSO CONTAINS "FORWARD-LOOKING" STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS, INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND IN THE
DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
WE FACE INTENSE COMPETITION IN THE ELECTRONIC SERVICES BUSINESS FROM BOTH
COMPETITORS IN OUR BUSINESS AND SUPPLIERS EXPANDING INTO OUR BUSINESS.
WE FACE INTENSE COMPETITION IN THE ELECTRONIC SERVICES BUSINESS.
We compete with a number of companies providing electronic commerce
services to retailers and vendors. We believe the principal factors on which
we compete include:
- product offerings,
- price,
- customer base, and
- customer service and support.
Competitive pricing may materially adversely affect the prices we can charge.
Competition may also affect our ability to gain new customers and retain and
expand business with our existing customers, and the range of services offered
to our customers. We expect competition to increase as more companies enter the
market and existing competitors continue to change and expand their product
offerings. Many of our existing and potential competitors have financial,
marketing or technological resources that exceed our own resources, and we
cannot assure you that we will be able to compete successfully.
WE MAY NOT BE SUCCESSFUL IN EXPANDING OUR MARKET OVER THE INTERNET.
We cannot assure you that our efforts to exploit the opportunities
provided by the electronic commerce market will be successful or that
increased usage of the Internet for electronic commerce or increased
competition will not adversely affect our business, results of operations,
and financial condition.
IBM AND AT&T COULD DECIDE TO COMPETE AGAINST US.
IBM has, under certain license and maintenance agreements with us,
the right to market our catalog applications in competition with us, in
return for prescribed royalty and maintenance payments. We cannot assure you
that IBM will not exercise its license rights and compete with us. In 1998,
AT&T and IBM
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announced a definitive agreement pursuant to which AT&T agreed to purchase
IBM's Global Network and corporate networking business. If IBM transfers our
network services agreement with IBM to AT&T or if AT&T markets IBM network
services to the retail industry or directly to our customers, or permits one
or more of our competitors to use and remarket these services to the retail
industry, our business and results of operations could be materially
adversely affected. IBM and AT&T are free to compete against us, and we
cannot assure you that IBM and AT&T will not choose to compete with us in the
future. If AT&T or IBM were to become a competitor, our business and results
of operations could be materially adversely affected.
WE DEPEND ON IBM FOR OUR NETWORK SERVICES AND A SUBSTANTIAL PORTION OF OUR
REVENUES.
BECAUSE WE DEPEND ON IBM'S VALUE-ADDED NETWORK FOR A SUBSTANTIAL
PORTION OF OUR REVENUES, ANY SIGNIFICANT CHANGE IN OR DISRUPTION OF ITS
OPERATIONS COULD ADVERSELY AFFECT OUR REVENUES.
Since 1988, we have used the IBM Value-Added Network or "VAN" to
provide customers with certain electronic commerce services, including
electronic data interchange and connectivity. Currently, IBM and AT&T Global
Network Services solely control the maintenance and operation of the VAN. We
anticipate that we will continue to acquire our network service requirements
from IBM with the delivery of a portion of these services to be undertaken by
AT&T Global Network Services. We depend on the IBM VAN for a substantial part
of our revenues and such dependence is expected to continue and last through
the term of our contract, which expires December 31, 2000. Since we have no
right to control the maintenance and operation of the VAN, decisions with
respect to such matters that adversely affect us may have a material impact
on our business and results of operations. In addition, if IBM and AT&T
become unable or unwilling to provide VAN services, we would either have to
provide these services directly or arrange for a third party to provide such
services. We cannot assure you that we would be able to do so on a timely
basis, if at all, or that the costs of any such arrangements would not
materially adversely affect our business and results of operations.
Disruption or unavailability of the IBM VAN could have a material adverse
effect on our business and results of operations.
ANY CHANGE IN IBM'S RATE STRUCTURE OR THE VOLUME OF OUR BUSINESS WITH
IBM COULD ADVERSELY AFFECT OUR REVENUES.
IBM currently charges us for the network services used by our
customers. These charges are subject to specified volume discounts and
allowances. In the event that IBM decides to increase the prices that it
charges us or reduces the amount of discounts or allowances after our current
contract expires, we cannot assure you that we will be able to pass along
these changes to our customers. If we cannot do so, our business and results
of operations could be materially adversely affected. We have an agreement
with IBM for the purchase of $250 million of network services over a
three-year period beginning January 1, 1998. The agreement includes specified
annual minimum purchases and a graduated adjustment charge if total purchases
fall below the minimum amount. We cannot assure you that we will meet the
minimum purchase requirements, and if we do not do so, we will have to pay
more for IBM's network services and our revenues could be adversely affected.
WE DEPEND ON SEVERAL KEY "HUB" CUSTOMERS FOR OUR BUSINESS.
We provide services and generate revenues by enabling certain of
our key central or hub customers and their trading partners to conduct
business over our network. Our customers include several hubs which represent
a significant amount of our business. Estimated revenues attributable to all
of the billings of any one of our hub customers and its trading partners may
exceed 10% of our total revenues in any one period. One or more of our hub
retail customers could elect either to develop their own catalog and
electronic data interchange services or to transfer all or a significant
portion of their trading activities to a competitor. Any such transfer could
result in many of that retailer's vendor partners electing not to maintain
their U.P.C. catalog information with us. Any transfer that results in a loss
or significant reduction in our catalog and network services business could
have a material adverse effect on our business and results of operations.
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NEW TECHNOLOGY COULD MAKE OUR EXISTING SERVICES OBSOLETE.
The electronic data interchange services industry is characterized
by continuously evolving standards and technology. Our ability to anticipate
or guide retail industry standards, to continue to apply advances in network
technology and to develop new catalog and other applications will be a
significant factor in our ability to grow and remain competitive. Our current
pricing structure for our catalog and electronic data interchange services is
partially based on the number of characters transmitted. Our business and
results of operations could be materially adversely affected if new
compression technology is introduced which reduces the number of characters
needed to electronically transmit business documents. In addition, new
technologies could be developed or enhanced that could make our existing
catalog and electronic data interchange services technologically obsolete. We
cannot assure you that we will be able to respond in a timely manner to
technological changes or that the ability of competitors to successfully
incorporate evolving standards and technologies into new services will not
make our services noncompetitive. If we fail to adapt to or incorporate new
standards or technology, it could have a material adverse effect on our
business and results of operation.
OUR SUCCESS DEPENDS IN PART ON OUR ABILITY TO TIMELY DESIGN AND INTRODUCE NEW
PRODUCTS AND SERVICES.
Our future growth depends on our successful and timely introduction
of new products and services in markets that do not currently exist or are
just emerging. We have not yet completed development of all of these services
and we cannot assure you that we will successfully complete any such
development or that if such development is completed, our planned
introduction of these services will realize market acceptance or will meet
the technical or other requirements of potential customers. We use complex
software products in our electronic commerce industry, and these products may
contain undetected errors or failures when first introduced or when new
versions are released. If software errors are discovered after introduction,
we could experience delays or lost revenues during the period required to
correct these errors. We cannot assure you that errors will not be found in
new products or releases after commencement of commercial shipments. Such
errors could result in loss of, or delay in, market acceptance, which could
have a material adverse effect on our business, results of operations and
financial condition.
WE FACE RISKS ASSOCIATED WITH PHYSICAL DAMAGE TO OUR DATA CENTER FACILITY.
QRS Keystone, our catalog product, runs on a computer system
contained in our data center facility in Richmond, California. The data
center is located in a single facility and we have no present intention of
establishing an additional data center in a separate location. We have
arranged for use of off-site computer facilities, if necessary, and have
taken other precautions to protect ourselves and our customers from events
that could interrupt delivery of our services. However, we cannot assure you
that a fire, earthquake or other natural disaster affecting the data center
would not disable our computer system. Our data center routes through the
AT&T hubs in San Francisco and Los Angeles. Any significant damage to our
data center or disruption of its connectivity to the AT&T network could have
a material adverse effect on our business and results of operations.
WE MAY NOT BE ABLE TO PROPERLY MANAGE OUR GROWTH.
We have significantly increased our service offerings and
customers. Maintaining profitability during a period of expansion will
depend, among other things, on our ability to manage effectively our
operations. Difficulties in managing continued growth could have a material
adverse effect on our business and results of operations.
WE DEPEND ON OUR KEY PERSONNEL.
Our success depends to a significant extent upon the
performance of our executive officers and other key employees, particularly the
members of senior management. We have no "key personnel" life insurance for any
of our senior management and do not currently intend to purchase any such
policies. We
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cannot assure you that we will be able to continue to attract and
retain the qualified personnel necessary for the development of its business. If
we lose key personnel or fail to recruit necessary additional personnel, our
business and results of operations could be materially adversely affected.
WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY.
We rely on a combination of copyright, trade secret and trademark
laws and nondisclosure agreements to protect our proprietary rights. Existing
copyright laws afford only limited protection and we may not be able to
police unauthorized use of our products and services. Unauthorized third
parties may be able to copy our products and services or to reverse engineer
or otherwise obtain and use our proprietary information. Further, the laws of
certain countries in which our products or services may be distributed may
not protect our products or services and intellectual rights to the same
extent as the laws of the United States. If unauthorized third parties copy
or reverse engineer or otherwise obtain and use our proprietary information,
our business and results of operations could be materially adversely affected.
WE MUST MANAGE THE INTEGRATION OF RETAIL DATA SERVICES, INC. SUCCESSFULLY IN
ORDER TO ACHIEVE DESIRED RESULTS.
We recently acquired Retail Data Services, Inc. The acquisition is
accompanied by a number of risks, including:
- the difficulty of assimilating the operations and personnel
of Retail Data Services;
- the potential disruption of our ongoing business and
distraction of management;
- the difficulty of incorporating acquired technology and
rights into our products and services;
- unanticipated expenses related to technology integration;
- the maintenance of uniform standards, controls, procedures
and policies;
- the impairment of relationships with employees and
customers as a result of any integration of new management
personnel; and
- potential unknown liabilities associated with Retail Data
Services.
We may not succeed in addressing these risks or any other problems encountered
in connection with the acquisition.
WE MAY EXPERIENCE LOSSES FROM QUARTER TO QUARTER.
Our future quarterly operating results may vary and we could
experience reduced levels of earnings or losses in one or more quarters.
Fluctuations in our quarterly operating results could result from a variety
of factors, including:
- changes in the levels of revenues derived from each
product, relating to the timing of new service
announcements by us or by our competitors;
- changes in our pricing policies or those of our
competitors;
- market acceptance of our new and enhanced versions of our
products and services versus those of our competitors;
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- the size and timing of significant orders;
- changes in operating expenses;
- changes in our strategy;
- the introduction of alternative technologies;
- the effect of potential acquisitions; and
- industry and general economic factors.
We have limited or no control over many of these factors.
FAILURE OF OUR COMPUTER SYSTEMS OR OUR BUSINESS PARTNERS' COMPUTER SYSTEMS TO
RECOGNIZE THE YEAR 2000 COULD NEGATIVELY AFFECT OUR BUSINESS.
We have conducted an evaluation of the actions necessary to confirm
that our business critical computer and other systems will be able to
function without disruption with respect to the application of dating systems
in the Year 2000 and have formulated a Year 2000 readiness plan. The scope of
the Year 2000 plan includes: (1) information technology, such as software and
hardware, (2) non-information technology systems or embedded technology such
as micro-controllers contained in various safety systems, facilities and
utilities, and (3) readiness of key third parties, including suppliers and
customers. Our remedial actions are scheduled for completion during the third
quarter of 1999. However, we cannot assure you that the remedial actions we
are implementing will be completed by the time necessary to avoid Year 2000
compliance problems.
OUR INFORMATION TECHNOLOGY SYSTEMS MAY NOT BE YEAR 2000 READY.
We are upgrading, replacing, and testing many of our information
technology systems to achieve Year 2000 readiness. We believe that our
mainframe systems are largely Year 2000 capable, and that upgrading our PC
and midrange systems will require the majority of our attention. We cannot
assure you that our information technology systems will be Year 2000 ready.
OUR NON-INFORMATION TECHNOLOGY SYSTEMS MAY NOT BE YEAR 2000 READY.
We believe that our non-information technology Year 2000 exposure
is relatively low. However, we cannot assure you that we have properly
assessed this risk. We believe that our currently offered products and EC
services are Year 2000 ready, or will be ready before the end of 1999 through
new product releases or modifications to internal systems. A small percentage
of our customers who receive product support from us are operating product
versions that may not be Year 2000 ready or are using products or product
versions that we have replaced or intend to replace with comparable Year 2000
ready products. We do not believe that customers who license or migrate to
Year 2000 ready versions of our products, or customers who purchase our EC
services, will experience any Year 2000 failures caused by such products or
services. We cannot assure you that our expectations and beliefs as to these
matters will prove to be accurate. Moreover, our products employ, and the
provision of our services requires the use of, systems comprised of
third-party hardware and software, some of which may not be Year 2000 ready.
KEY THIRD PARTIES, INCLUDING OUR SUPPLIERS AND CUSTOMERS, MAY
NOT BE YEAR 2000 READY.
We have a process in place to assess the Year 2000 readiness of our
business critical vendors and customers, and are working with these vendors
and customers on Year 2000 readiness issues. We cannot assure you that the
systems of other parties upon which we rely will be made Year 2000 ready on a
timely basis. We use third party vendor equipment, telecommunications
products and software products. Disruptions with respect to computer systems
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of vendors or customers, whose systems are outside our control, could impair
our ability to provide services to our customers, and could have a material
adverse effect upon our financial condition and results of operations, or
require us to incur unanticipated expenses to remedy any problems.
OUR YEAR 2000 READINESS PLAN MAY NOT BE COMPREHENSIVE ENOUGH.
We expended approximately $425,000 in 1998 and $1,066,000 during
the six months ended June 30, 1999 on activities to prepare for Year 2000
readiness. Approximately $155,000 and $181,000, respectively, was for
assessments and customer notification, and $270,000 and $885,000,
respectively, was for testing and product and infrastructure modifications.
We currently estimate that it will cost an additional $1,159,000, budgeted
primarily under our Information Technology division, prior to January 1,
2000, to modify our in-house information systems, other systems and
internally developed software products affected by the Year 2000 issue. We
estimate that of the remaining costs, 18% will be for assessment and customer
notification and 82% will be for testing and modifications. Total Year 2000
readiness costs have increased due to additional work scope. We are funding
all costs associated with Year 2000 compliance with cash flow generated from
operations and existing cash balances and expensing such costs as they are
incurred. We cannot assure you, however, that our estimates of our Year 2000
projected costs will be accurate or that we will be able to continue to fund
such Year 2000 costs through our current cash flow from operations.
PURCHASING TRENDS IN THE ELECTRONIC DATA INTERCHANGE INDUSTRY MAY
AFFECT OUR GROWTH.
Additional aspects of the Year 2000 issues may pose risks to be
considered in evaluating our future growth. Normal purchasing patterns and
trends in the electronic data interchange industry may be affected by
customers replacing or upgrading applications or systems to address the Year
2000 issue. We have not experienced any discernable trend indicating a recent
or impending material reduction in demand for our services and products. We
cannot assure you, however, that purchasing patterns of our customers will
not change or that we will not experience such a reduction in demand for our
services and products in the future.
OUR VENDORS AND CUSTOMERS MAY EXPERIENCE YEAR 2000 PROBLEMS.
We believe that the most reasonably likely worst case scenario is
that a small number of vendors and/or customers will have lingering Year 2000
compliance problems, resulting in additional support for these customers and
the substitution of a higher number of software vendors than currently
anticipated. We will develop contingency plans for those business critical
vendors or large customers who are either unable or unwilling to develop
remedial plans to become Year 2000 ready. We expect that these plans will
involve the acceleration of our Year 2000 readiness activity and the
application of additional resources. We expect that these contingency plans
will be in place by the third quarter of 1999.
OUR CUSTOMERS COULD USE PRIVATE COMPUTER NETWORKS INSTEAD OF OUR
SERVICES.
Our customers' and potential customers' increased use of
private computer networks may reduce demand for our services. Some large
retailers and vendors operate private computer networks for transacting business
with their trading partners. Additional retailers and vendors, including certain
of our existing customers, may develop and implement similar private networks,
thereby reducing the demand for our services.
WE MAY BECOME SUBJECT TO GOVERNMENT REGULATION OF OUR ELECTRONIC COMMERCE
SERVICES AND PRODUCTS.
As a provider of electronic commerce services and products, current
regulations and laws governing the telecommunications industry generally do
not apply to us. Governmental policies affecting the electronic commerce
industry could be implemented by executive order, legislation, administrative
order, or otherwise. If such policies are adopted, they could have a material
adverse effect on our business, results of operations, and financial
condition.
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OUR STOCK PRICE FLUCTUATES SUBSTANTIALLY.
The market price of our common stock has fluctuated
significantly since the initial public offering of our common stock in August
1993. The market price of our common stock could be subject to significant
fluctuations in the future based on factors
- announcements of new products by us or by our competitors,
- quarterly fluctuations in our financial results,
- quarterly fluctuations in other electronic commerce
services companies' financial results,
- changes in analysts' estimates of our financial performance
- general conditions in the electronic commerce services
industry, and
- conditions in the financial markets.
The stock market in general has experienced extreme price and volume
fluctuations, which have particularly affected the market prices for many
high technology companies and which have often been unrelated to the
operating performance of the specific companies. Many technology companies,
including QRS, have recently experienced historic highs in the market price
of their equity securities. We cannot assure you that the market price of our
common stock will not decline substantially from such historic highs, or will
not otherwise continue to experience significant fluctuations in the future.
OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY MAKE A TAKEOVER MORE DIFFICULT.
We are a Delaware corporation. The Delaware General Corporation Law
contains certain provisions that may make a change in control of our company
more difficult or prevent the removal of incumbent directors. In addition,
our certificate of incorporation and bylaws contain provisions that have the
same effect. These provisions may have a negative impact on the price of our
common stock, may discourage third-party bidders from making a bid for our
company or may reduce any premiums paid to stockholders for their common
stock.
PLAN OF DISTRIBUTION
We are registering 53,250 shares on behalf of a selling
stockholder, Christine B. Cottrell. We will receive no proceeds from this
offering. Christine Cottrell or pledgees, donees, transferees or other
successors-in-interest selling shares received from Christine Cottrell as a
gift, partnership distribution or other non-sale related transfer after the
date of this prospectus (collectively, the "Selling Stockholder") may sell
the shares from time to time. The Selling Stockholder will act independently
of QRS in making decisions with respect to the timing, manner and size of
each sale. The sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and at terms then prevailing
or at prices related to the then current market price, or in negotiated
transactions. The Selling Stockholder may effect such transactions by selling
the shares to or through broker-dealers. The shares may be sold by one or
more of, or a combination of, the following:
- a block trade 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,
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- purchases by a broker-dealer as principal and resale by
such broker-dealer for its account pursuant to this
prospectus,
- an exchange distribution in accordance with the rules of
such exchange,
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers, and
- in privately negotiated transactions.
To the extent required, this prospectus may be amended or
supplemented from time to time to describe a specific plan of distribution.
In effecting sales, broker-dealers engaged by the Selling Stockholder may
arrange for other broker-dealers to participate in the resales.
The Selling Stockholder may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise.
In such transactions, broker-dealers may engage in short sales of the shares
in the course of hedging the positions they assume with the Selling
Stockholder. Some or all of the shares covered by this registration statement
may be sold to cover short positions in the open market. The Selling
Stockholder may enter into option or other transactions with broker-dealers
which require the delivery to the broker-dealer of the shares. The
broker-dealer may then resell or otherwise transfer such shares pursuant to
this prospectus. The Selling Stockholder also may loan or pledge the shares
to a broker-dealer. The broker-dealer may sell the shares so loaned, or upon
a default the broker-dealer may sell the pledged shares pursuant to this
prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholder.
Broker-dealers or agents may also receive compensation from the purchasers of
the shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection
with the sale. Broker-dealers or agents and any other participating
broker-dealers or the Selling Stockholder may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act in connection with
sales of the shares. Accordingly, any such commission, discount or concession
received by them and any profit on the resale of the shares purchased by them
may be deemed to be underwriting discounts or commissions under the
Securities Act. Because the Selling Stockholder may be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act, the
Selling Stockholder will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 promulgated under the Securities
Act may be sold under Rule 144 rather than pursuant to this prospectus.
The shares will be sold only through registered or licensed brokers
or dealers if required under applicable state securities laws. 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.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the shares may not simultaneously
engage in market making activities with respect to our common stock for a
period of two business days prior to the commencement of such distribution.
In addition, the Selling Stockholder will be subject to applicable provisions
of the Exchange Act and the associated rules and regulations under the
Exchange Act, including Regulation M, which provisions may limit the timing
of purchases and sales of shares of our common stock by the Selling
Stockholder. QRS will make copies of this prospectus available to the Selling
Stockholder and has informed it of the need for delivery of copies of this
prospectus to purchasers at or prior to the time of any sale of the shares.
9
<PAGE>
The Selling Stockholder will bear all commissions and discounts, if
any, attributable to the sales of the shares. The Selling Stockholder may
agree to indemnify any broker-dealer or agent that participates in
transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. The Selling
Stockholder has agreed to indemnify certain persons, including broker-dealers
and agents, against certain liabilities in connection with the offering of
the shares, including liabilities arising under the Securities Act.
SELLING STOCKHOLDER
We acquired from the Selling Stockholder all of the outstanding
capital stock of Retail Data Services, Inc. The Selling Stockholder currently
beneficially owns 53,250 shares of QRS, which is part of the consideration we
paid in the acquisition of Retail Data Services, Inc. and which represents
0.40% of the outstanding shares of QRS. All 53,250 shares are being offered
by this prospectus and may be offered from time to time by the Selling
Stockholder. The Selling Stockholder currently intends to sell all of these
shares.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon
for QRS by Brobeck, Phleger & Harrison LLP, San Francisco, California.
EXPERTS
The financial statements incorporated in this prospectus by
reference from QRS' Annual Report on Form 10-K for the year ended
December 31, 1998 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
10
<PAGE>
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM WHAT
IS IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM
WHAT IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT
AN OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE SECURITIES IN
ANY STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN
THIS PROSPECTUS IS COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE INFORMATION
MAY CHANGE AFTER THAT DATE.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You can Find More Information.....1
QRS Corporation.........................2
Risk Factors............................2
Plan of Distribution....................8
Selling Stockholder....................10
Legal Matters..........................10
Experts................................10
</TABLE>
QRS CORPORATION
53,250 Shares
OF COMMON STOCK
------------
PROSPECTUS
------------
August , 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an itemized statement of all
estimated expenses in connection with the issuance and distribution of the
securities being registered:
<TABLE>
<S> <C>
SEC Registration fee $ 691
Printing and engraving 1,500
expenses
Legal expenses 7,000
Accounting fees and 20,000
Expenses
Miscellaneous 300
</TABLE>
Item 15. Indemnification of Officers and Directors.
Section 145 of the General Corporation Law of the State of Delaware
(the "Delaware Law") empowers a Delaware corporation to indemnify any persons
who are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceedings, whether civil, criminal,
administrative or investigative (other than action by or in the right of such
corporation), by reason of the fact that such person was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation
or enterprise. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in
a manner he reasonably believed to be in or not opposed to the corporation's
best interests, and, for criminal proceedings, had no reasonable cause to
believe his conduct was illegal. A Delaware corporation may indemnify
officers and directors in an action by or in the right of the corporation
under the same conditions, except that no indemnification is permitted
without judicial approval if the officer or director is adjudged to be liable
to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify him against the
expenses which such officer or director actually and reasonably incurred.
In accordance with the Delaware Law, our certificate of
incorporation limits the liability of our directors to the maximum extent
permitted by law. Under Delaware law, our directors will not be personally
liable for monetary damages, except for liability (i) for any breach of the
director's duty of loyalty to us or our stockholders, (ii) for any acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) the unlawful payment of dividends or unlawful
stock purchases or redemptions, as provided in Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which a director
derived an improper personal benefit.
QRS' Bylaws provide that QRS shall indemnify its directors and may
indemnify its other officers and employees and other agents to the fullest
extent permitted by law. QRS believes that indemnification under its Bylaws
covers at least negligence and gross negligence on the part of the
indemnified parties. QRS' Bylaws also permit it to secure insurance on behalf
of any officer, director, employee of other agent for any liability arising
out of his or her actions in such capacity, regardless of whether the Bylaws
have the power to indemnify him or her under the General Corporation Law of
Delaware. QRS currently has secured such insurance on behalf of its directors
and officers.
QRS has entered into agreements to indemnify its directors and
executive officers, in addition to the indemnification to which they are
entitled under QRS' Bylaws. These agreements, among other things,
II-1
<PAGE>
indemnify QRS' directors and executive officers for certain expenses
(including attorneys' fees), judgments, fines and settlement amounts incurred
by any such person in any action or proceeding, including any action by or in
the right of QRS arising out of such person's services as a director or
executive officer of QRS, any subsidiary of QRS or any other company or
enterprise to which the person provides services at the request of QRS.
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 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; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that (i) and (ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by (i) and (ii) is
contained in periodic reports filed by the Registrant pursuant to Section 13
or Section 15 of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against 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 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 Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
II-2
<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 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 Richmond, State of California on this 23rd day of
August, 1999.
QRS Corporation
By: /S/ JOHN S. SIMON
-----------------------
John S. Simon
Chief Executive Officer and Director
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Peter
Papano, acting alone, his true and lawful attorney-in-fact with authority to
execute in the name of each person, and to file with the Securities and
Exchange Commission, together with any exhibits thereto and other documents
therewith, any and all amendments to this Registration Statement and any
registration statement for the same offering covered by this Registration
Statement that is to be effective upon filing pursuant to Rule 462(b)
promulgated under the Securities Act of 1933, as amended, and all
post-effective amendments thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
/S/ JOHN S. SIMON Chief Executive Officer and Director
- -------------------------------- (Principal Executive Officer)
John S. Simon
/S/ PETER PAPANO Chief Financial Officer and Secretary
- -------------------------------- (Principal Financial and Accounting Officer)
Peter Papano
/S/ PETER R. JOHNSON
- -------------------------------- Chairman of the Board of Directors
Peter R. Johnson
/S/ TANIA AMOCHAEV
- -------------------------------- Director
Tania Amochaev
/S/ STEVEN D. BROOKS
- -------------------------------- Director
Steven D. Brooks
/S/ JOHN P. DOUGALL
- -------------------------------- Director
John P. Dougall
II-3
<PAGE>
/S/ H. LYNN HAZLETT
- -------------------------------- Director
H. Lynn Hazlett
S/ PHILIP SCHLEIN
- -------------------------------- Director
Philip Schlein
S/ GAREN K. STAGLIN
- -------------------------------- Director
Garen K. Staglin
S/ GARTH SALONER
- -------------------------------- Director
Garth Saloner
</TABLE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- --------- -------------
<S> <C>
2.1 Agreement and Plan of Merger of QuickResponse Delaware, Inc. and QuickResponse
Services, Inc.*****
4.1 Specimen of Common Stock Certificate of QRS.*
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1 hereto).
24.1 Power of Attorney (included on page II-3 hereto).
</TABLE>
* Incorporated by reference to Exhibit of same number of QRS' Registration
Statement on Form S-1 (Registration No. 33-63938).
***** Incorporated by reference to Exhibit of same number filed with QRS' Annual
Report on Form 10-K for the year ended December 31, 1997.
- ------------------
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold shall be deemed to
be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in
any subsequently filed document which also is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
<PAGE>
EXHIBIT 5.1
OPINION OF BROBECK, PHLEGER & HARRISON
August 23, 1999
QRS Corporation
1400 Marina Way South
Richmond, California 94804
Ladies and Gentlemen:
We have acted as counsel to QRS Corporation, a Delaware
corporation (the "Company"), in connection with the registration of an aggregate
of 53,250 shares of its common stock (the "Shares"), which may be offered for
resale by certain stockholders of the Company (the "Selling Stockholders"), as
described in the Company's Registration Statement on Form S-3, filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Registration Statement").
This opinion is being furnished in accordance with the
requirements of Item 16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the issuance and sale of
the Shares. Based on such review, we are of the opinion that the Shares have
been duly authorized, and if, as and when issued in accordance with the
Registration Statement and the related prospectus (as amended and
supplemented through the date of issuance) will be legally issued, fully paid
and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1 to
the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus which is part of the Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act,
the rules and regulations of the Securities and Exchange Commission
promulgated thereunder, or Item 509 of Regulation S-K.
This opinion is rendered as of the date first written above and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company or the Shares.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
------------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of QRS Corporation on Form S-3 of our report dated January 28,
1999, appearing in the Annual Report on Form 10-K of QRS Corporation for the
year ended December 31, 1998 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
-------------------------
San Jose, California
August 20, 1999
