<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 2000
REGISTRATION NO. 333-35676
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
QRS CORPORATION
(Exact name of Registrant as specified in its charter)
------------------------------
DELAWARE 7370 68-0102251
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number) Identification No.)
or organization)
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)
------------------------------
JOHN S. SIMON
CHIEF EXECUTIVE 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)
------------------------------
Copies to:
RONALD B. MOSKOVITZ, ESQ.
SCOTT D. KARCHMER, ESQ.
BARBARA SKAGGS GALLAGHER, 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. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _____________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
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 (2)
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<S> <C> <C> <C> <C>
Common Stock, no par value.................. 847,290 shares $46.44 $39,348,147 $10,387.91
===================================================================================================================================
</TABLE>
(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 April 25, 2000.
(2) A filing fee of $10,387.91 was previously paid with the initial filing
of the Registration Statement on April 26, 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 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.
===============================================================================+
<PAGE>
PROSPECTUS
847,290 SHARES
[LOGO]
QRS CORPORATION
COMMON STOCK
--------------------------------------------------------------------------------
This prospectus relates to the public offering, which is not being
underwritten, of 847,290 shares of our common stock which is held by some of
our current stockholders. 100,000 shares which may be offered hereby were
received by certain of the selling stockholders in connection with our
acquisition of all the outstanding capital stock of Image Info Inc. and
747,290 shares which may be offered hereby were received by certain of the
selling stockholders in connection with our acquisition of substantially all
of the assets of RockPort Trade Systems, Inc.
The prices at which such stockholders 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 stockholders hereby.
Our common stock is quoted on the Nasdaq National Market under the
symbol QRSI. On June 9, 2000, the closing price for the common stock was
$ 29.625.
----------------------
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
----------------------
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 June 12, 2000.
<PAGE>
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. Any information so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 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, 1999 filed with the SEC on March 29, 2000;
(b) Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2000 filed with the SEC on May 15, 2000;
(c) Current Reports on Form 8-K filed with the Commission on
(i) January 28, 2000, and amended on March 27, 2000, and (ii) March 24, 2000,
and amended on May 23, 2000, respectively; and
(d) 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:
Shawn M. O'Connor
President, Chief Operating Officer and Interim 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", or "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.
OUR OPERATING RESULTS MAY FLUCTUATE 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 demand for our services
- changes in our pricing policies or those of our competitors
- market acceptance of new and enhanced versions of our services
- changes in operating expenses
- changes in our strategy
- introduction of alternative technologies by our competitors
- effect of potential acquisitions
- industry and general economic factors
We cannot control all of these factors. Due to all of these
factors and other risks discussed in this report, period-to-period
comparisons of our results of operations may not reflect our future
performance.
OUR MARKETPLACE SERVICES ARE EVOLVING AND WE CANNOT BE SURE THEY WILL BE
SUCCESSFUL.
We are continuing to expand the breadth of our B2B eCommerce services through
our marketplace services initiative. In particular, we have introduced
Tradeweave, an Internet marketplace designed to facilitate the trade and auction
of first-run and excess merchandise. Tradeweave is new and unproven, and we
cannot assure you that it will be successful. Some of our existing customers
have agreed to participate in Tradeweave. None of these customers are obligated
to buy or sell any retail merchandise through Tradeweave. As a result, we
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<PAGE>
cannot assure you that these or any of our other customers will trade or
auction first-run or excess retail merchandise.
The implementation of Tradeweave has and is expected to continue to require
significant investment of both financial and management resources, and the
expenses related to Tradeweave have had and we expect will continue to have an
adverse impact on our operating results and earnings for the near term. We
expect that our operational and development costs related to Tradeweave will
increase significantly as we invest in infrastructure and product development,
and increase the sales and marketing efforts. We do not expect to derive
significant revenue from these services in the near future. The success of
Tradeweave will require, among other things, broad market acceptance by our
existing and future customers. If Tradeweave does not generate sufficient
revenues to achieve and maintain profitability, our investment in Tradeweave
could adversely affect our operating results and earnings in future quarters. If
our operating results and earnings fall below the expectations of public market
analysts and investors, the trading price of our common stock is likely to
decline.
THE SUCCESS OF OUR BUSINESS DEPENDS ON OUR CUSTOMERS' CONTINUING ACCEPTANCE OF
OUR B2B ECOMMERCE SERVICES.
Currently, our revenues are derived from the use of our B2B eCommerce services
by retailers and their trading partners. As a result, the success of our
business depends upon:
- our current customers' adoption and acceptance of additional services that
we currently offer and will offer in the future
- our ability to attract new customers and their acceptance of our current
and future service offerings
The retail industry is often characterized as being conservative in its approach
to adopting new technologies. Many of our customers are new to the use of B2B
eCommerce practices and may not have sufficient resources or properly trained
personnel to utilize our services. If we are unable to increase customer
acceptance of our current service offerings and achieve market acceptance of our
future service offerings, our business, financial condition, and results of
operations will be materially adversely affected.
THE MARKET FOR B2B ECOMMERCE SERVICES IS INTENSELY COMPETITIVE.
We compete with a number of companies providing B2B eCommerce services as well
as companies providing software and services to the retail industry. We believe
the principal factors on which we compete include:
- breadth and quality of services
- price
- customer base
- customer service and support
- retail industry focus, presence and knowledge
- product, merchandise and other related content
- enabling inter-enterprise relationships
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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. Competition may affect our ability
to gain new customers and retain and expand business with our existing
customers. It may also affect the range of services we can offer to our
customers.
We expect competition to increase as more companies enter the market and
existing competitors continue to change and expand their service offerings. In
addition, in-house systems and third-party software providers are also
significant competitors to our services. Some of our potential competitors have
longer operating histories, larger customer bases, and greater brand recognition
in B2B eCommerce markets than we do. In addition, other companies may be
acquired by, receive investments from, or enter into other commercial
relationships with larger, well-established and well-financed companies. As a
result, some of our competitors with other revenue or investment sources may be
able to devote more resources to marketing and promotional campaigns, adopt more
aggressive pricing policies and devote substantially more resources to website
and systems development than we can, which may adversely affect our business.
Furthermore, some of our competitors, in particular Internet companies, may not
be bound by investors' expectations of earnings and, therefore, may be able to
allocate more resources to grow their Internet operations.
NEW TECHNOLOGY COULD MAKE OUR EXISTING SERVICES OBSOLETE.
The market for B2B eCommerce services is characterized by rapidly changing
technology and continuously evolving standards. To be successful, we must adapt
by continually improving the performance, features, and reliability of our
services or else our services may become obsolete. We cannot assure you that we
will be able to respond in a timely manner to technological changes. The ability
of competitors to successfully incorporate evolving standards and technologies
into new services may make our services noncompetitive. Technological changes
could force us to lower the price of our services. If we fail to adapt to or
incorporate new standards or technology, it may have a material adverse effect
on our business and results of operations.
WE DEPEND ON IBM FOR MOST OF OUR ECOMMERCE SERVICES AND FOR A SUBSTANTIAL
PORTION OF OUR REVENUES.
Since 1988, we have used the IBM value-added network, or VAN, as the network
platform over which we provide customers with most of our eCommerce 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, 2001. Because we have no right to control the
maintenance and operation of the IBM VAN, we do not control decisions that
could have a material adverse impact on the operation of the VAN and
consequently, on our business and results of operations. In addition, if IBM
becomes unable or unwilling to provide VAN services, we would either have to
provide these services directly or arrange for another 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 may have a material adverse
effect on our business and results of operations.
IBM currently charges us for our use of its network and messaging services by
our customers. 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 may not be able to pass along these charges to our
customers. If we are unable to do so, our business and results of operations
could be materially adversely affected. We have an agreement with IBM to
purchase $335 million of network services over a four-year period ending
December 31, 2001. This amount is subject to specified volume discounts and
allowances. 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 and messaging
services and our revenues may be adversely affected. We met our purchase
commitment for 1998. However, we did not meet our annual purchase commitment
in 1999 and recorded additional expense of $120,000. It is uncertain whether
we will meet our purchase commitment in 2000 and 2001.
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IBM AND AT&T COULD DECIDE TO COMPETE AGAINST US.
In April 1999, AT&T purchased IBM's Global Network and corporate networking
business. We have continued to receive our network services pursuant to the
terms of our IBM agreements. 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 IBM's network 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 may be materially adversely
affected.
WE MAY NOT BE ABLE TO EFFECTIVELY MANAGE OUR GROWTH.
We have experienced significant revenue growth as we have added new retailers
and vendors, increased the number of trading partnerships and increased the size
of QRS KEYSTONE, our product information database. Maintaining profitability
during a period of expansion will depend, among other things, on our ability to
manage effectively our operations. More recently, we have significantly
increased our service offerings and customers both through internal growth and
acquisitions. In particular, we expect Tradeweave to require significant
additional expansion of our operations, employees, and infrastructure. If we are
unable to manage our growth effectively, it may have a material adverse effect
on our business and results of operations.
OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT, TRAIN AND RETAIN KEY PERSONNEL.
Our success depends significantly upon the performance of our executive officers
and other key employees. We also need to attract, train, retain, and motivate
technical, managerial, and marketing personnel. Competition for qualified
personnel is intense, particularly with respect to Internet product and service
personnel. We cannot assure you that we will be able to continue to attract and
retain the qualified personnel necessary for the development of our business. If
we lose key personnel or fail to recruit necessary additional personnel, our
business and results of operations may be materially adversely affected.
FAILURE TO EXPAND THE INTERNET INFRASTRUCTURE COULD LIMIT OUR FUTURE GROWTH.
We increasingly rely on the Internet for the delivery of our services. The
recent growth in Internet traffic has caused frequent periods of decreased
performance. If Internet usage continues to grow rapidly, its infrastructure may
not be able to support these demands and its performance and reliability may
decline. If outages or delays on the Internet occur frequently or increase in
frequency, overall Internet usage, including usage of our services, could grow
more slowly or decline. Our ability to deliver services through the Internet to
customers is ultimately limited by and depends upon the speed and reliability of
both the Internet and our customers' internal networks. Consequently, the growth
of the market for our services, particularly Tradeweave, depends upon
improvements being made to the entire Internet as well as to our individual
customers' networking infrastructures to alleviate overloading and congestion.
If these improvements are not made, our customers' ability to utilize our
services will be hindered, and our business and results of operations may
suffer.
OUR SUCCESS DEPENDS IN PART ON OUR ABILITY TO INTRODUCE NEW SERVICES IN A TIMELY
MANNER.
Our future growth depends on our successful and timely introduction of new
services in existing and emerging markets. We cannot assure you that we will
successfully complete development or that if such development is completed, our
planned introduction of these services will gain market acceptance or will meet
the technical or other requirements of potential customers. To provide our
services, we rely on complex software, which may contain undetected errors or
failures. Software errors or delays could result in loss of, or delay in, market
5
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acceptance of our services, which may have a material adverse effect on our
business, results of operations, and financial condition.
WE DEPEND ON SEVERAL KEY CUSTOMERS FOR OUR BUSINESS.
We provide services and generate revenues by enabling certain of our key retail
customers and their trading partners to conduct business over our network.
Estimated revenues attributable to all of the billings of any one of these
customers and its trading partners may exceed 10% of our total revenues in
future quarters. In addition, the retail industry has recently experienced
significant consolidation. If any of our retail customers consolidate, it could
adversely affect our revenues. In addition, our customers could elect either to
develop their own B2B eCommerce services or to transfer all or a significant
portion of their activities to one of our competitors, which could have a
material adverse effect on our business and results of operations.
DAMAGE TO OUR DATA CENTER FACILITY COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS AND RESULTS OF OPERATIONS.
Our content and application services, such as QRS KEYSTONE, run 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. However, 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. These precautions include off-site storage
of back-up data, fire protection, and physical security systems, an early
warning detection, and Halon fire extinguishing system. Notwithstanding these
precautions, 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 independent AT&T hubs in San Francisco and Los
Angeles. In the event that service through these locations is interrupted, we
have back-up access through AT&T's Seattle hub. Any significant damage to our
data center or disruption of its connectivity to the IBM VAN network and/or AT&T
network could have a material adverse effect on our business and results of
operations.
WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY AND INFORMATION.
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 services, and proprietary technology, and information.
Unauthorized third parties may be able to copy our services or otherwise obtain
and use our proprietary technology and information. For example, if a competitor
were able to duplicate the information contained in our product information
database, our business could be adversely affected. Further, the laws of certain
countries in which our services may be distributed may not protect our services
and intellectual rights to the same extent as the laws of the United States. If
unauthorized third parties obtain and use our proprietary technology and
information, our business and results of operations may be materially adversely
affected.
ACQUISITIONS OR INVESTMENTS COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
We have made acquisitions in the past and we expect to acquire complementary
businesses or technologies in the future. The success of any acquisition will
depend upon, among other things, our ability to:
- identify and evaluate the proposed acquisition of complementary businesses
or technologies
- complete the acquisition on reasonable terms
- obtain any necessary financing
- integrate effectively the acquired personnel, operations or technologies
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- retain customers and motivate key personnel
An acquisition could cause a distraction of our management and employees, an
increase in our expenses, an assumption of additional debt, and/or an issuance
of equity which could be dilutive to existing stockholders, and expose us to the
risk that we will fail to successfully implement the acquisition. This may
materially and adversely affect our results of operations and financial
condition.
OUR STOCK PRICE MAY FLUCTUATE 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 including:
- announcements of new services by us or by our competitors
- fluctuations in our quarterly financial results
- fluctuations in our competitors' quarterly financial results
- changes in analysts' estimates of our financial performance or our failure
to meet these estimates
- conditions in the Internet commerce, information services, and high
technology industries
- 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 significant fluctuations in the market price
of their equity securities. We cannot assure you that the market price of our
common stock will not continue to experience significant fluctuations in the
future.
RESIDUAL PROBLEMS RELATING TO THE YEAR 2000 COULD NEGATIVELY AFFECT OUR
BUSINESS.
We completed the tasks we believed were necessary to confirm that our business
critical computer and other systems are able to function without disruption with
respect to the application of dating systems in Year 2000. There were no
significant product delivery or internal systems issues reported over the Year
2000 transition. Although we believe that all appropriate steps have been taken
to address Y2K readiness, there can be no guarantee that undetected errors or
defects associated with Year 2000 date functions will prevent a material adverse
impact on the results of operations and financial condition.
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. Under our agreement with Tradeweave, Inc., Peter R. Johnson and Garth
Saloner, the demand registration right of the minority stockholders of
Tradeweave, Inc. is affected by a change of control of QRS. Any of these
provisions may have a negative impact on the price of our common stock, may
discourage third-party bidders from making a bid for QRS or may reduce any
premiums paid to our stockholders for their common stock.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
PLAN OF DISTRIBUTION
We are registering all 847,290 shares (the "Shares") on behalf of certain
selling stockholders. All of the Shares originally were issued by us in
connection with our acquisition of all the outstanding capital stock of Image
Info Inc. and our acquisition of substantially all of the assets of RockPort
Trade Systems, Inc. We will receive no proceeds from the sale of the Shares
by the selling stockholders. The selling stockholders named in the table
below or pledgees, donees, transferees or other successors-in-interest
selling Shares received from a named selling stockholder as a gift,
partnership distribution or other non-sale-related transfer after the date of
this prospectus (collectively, the "Selling Stockholders") may sell the
Shares from time to time. The Selling Stockholders 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 Stockholders 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,
- 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 Stockholders may arrange for other
broker-dealers to participate in the resales.
The Selling Stockholders 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 Stockholders. Some
or all of the Shares covered by this registration statement may be sold to cover
short positions in the open market. The Selling Stockholders 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 Stockholders 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 Stockholders. 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 Stockholders
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
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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 Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholders
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 Stockholders 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 Stockholders. QRS will make copies of
this prospectus available to the Selling Stockholders and has informed the
Selling Stockholders of the need for delivery of copies of this prospectus to
purchasers at or prior to the time of any sale of the Shares.
The Selling Stockholders will bear all commissions and discounts, if any,
attributable to the sales of the Shares. The Selling Stockholders 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 Stockholders have 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.
9
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the number of shares owned by each of the Selling
Stockholders and the number of Shares registered for resale hereby. No estimate
can be given as to the amount of shares that will be held by the Selling
Stockholders after completion of this offering because the Selling Stockholders
may offer all or some of the Shares and because there currently are no
agreements, arrangements or understandings with respect to the sale of any of
the Shares. The Shares offered by this prospectus may be offered from time to
time by the Selling Stockholders named below.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Percentage of Number of Shares
Owned Prior to the Outstanding Registered for
NAME OF SELLING STOCKHOLDER Offering Shares(1) Sale Hereby(2)
--------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
Craig Schlossberg 161,771 1.06% 36,690
Jonathan Pinsky 161,771 1.06% 36,690
Earl Rosen 40,432 * 9,170
Catherine Pinsky 32,363 * 7,340
John Orvos 20,238 * 4,590
James Killough III 17,725 * 4,020
Jason Pinsky 6,614 * 1,500
Susan Welch 340,523 2.24% 340,523
William Welch 8,161 * 8,161
Stephen Welch 8,161 * 8,161
Judy Charron 8,161 * 8,161
Jack Zakarian 182,504 1.2% 115,000
Insight Capital Partners II, L.P. 120,278 * 120,278
Insight Capital Partners (Cayman) II, L.P. 13,364 * 13,364
Imprimis SB L.P. 133,642 * 133,642
</TABLE>
-------------------------
* Less than one percent.
(1) Based on 15,192,993 shares of common stock outstanding on June 1, 2000.
(2) This registration statement also shall cover any additional shares of
common stock which become issuable in connection with the Shares registered
for sale hereby by reason of any stock divided, stock split, recapitalization
or other similar transaction effected without the receipt of consideration
which results in an increase in the number of QRS' outstanding shares of
common stock.
10
<PAGE>
The Shares which may be offered by Craig Schlossberg, Jason Pinsky, James
Killough III, John Orvos, Jonathan Pinsky, Earl Rosen and Catherine Pinsky
were acquired by them in connection with QRS' acquisition of all the
outstanding capital stock of Image Info Inc. Immediately prior to the
acquisition, each of those individuals, with the exception of Jason Pinsky,
held positions with Image Info Inc. After the completion of the acquisition,
Mr. Schlossberg became QRS' Vice President and General Manager, Imaging
Software, Mr. Jonathan Pinsky became QRS' Vice President and General Manager,
Imaging Services, Mr. Killough became a consultant to QRS, Mr. Orvos became
an Account Executive for QRS and Mr. Rosen became Vice President, Marketing
for QRS.
The Shares which may be offered by Susan Welch, William Welch, Stephen Welch,
Judy Charron, Jack Zakarian, Insight Capital Partners II, L.P., Insight Capital
Partners (Cayman) II, L.P. and Imprimis SB L.P. were acquired by them in
connection with QRS' acquisition of substantially all of the assets of RockPort
Trade Systems, Inc. Prior to the acquisition, Ms. Welch and Mr. Zakarian were
each employed with RockPort Trade Systems, Inc. After the completion of the
acquisition, Ms. Welch became Senior Vice President, Application Services for
QRS and Mr. Zakarian became a consultant to QRS.
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, 1999 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.
The financial statements incorporated in this prospectus by reference from
QRS' Current Report on Form 8-K/A dated March 27, 2000 for the years ended
December 31, 1999 and 1998 have been audited by Goldstein Golub Kessler 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.
The financial statements of RockPort Trade Systems, Inc. appearing in QRS'
Current Report on Form 8-K/A dated May 23, 2000 for the year ended
December 31, 1999 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein
by reference. Such financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The audited historical financial statements included on pages 19 through 30
of QRS' Form 8-K/A dated May 23, 2000 have been so incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
MATERIAL CHANGES
QRS' 2000 Annual Meeting of Stockholders was held on May 11, 2000. At the
Annual Meeting, the stockholders approved an amendment to QRS' Certificate of
Incorporation to increase the number of shares of common stock authorized for
issuance thereunder from 20,000,000 to 60,000,000 and also approved an
amendment to QRS' 1993 Stock Option/Stock Issuance Plan to increase the
number of shares of common stock authorized for issuance over the term of the
plan by an additional 800,000 shares.
On May 11, 2000, QRS' Board of Directors approved an amendment to the Special
Non-Officer Stock Option Plan to increase the number of shares of common
stock authorized for issuance over the term of the plan by an additional
225,000 shares.
11
<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
PAGE
----
Where You can Find More Information...................................... 1
QRS Corporation.......................................................... 2
Risk Factors............................................................. 2
Use of Proceeds.......................................................... 8
Plan of Distribution..................................................... 8
Selling Stockholders..................................................... 10
Legal Matters............................................................ 11
Experts.................................................................. 11
QRS CORPORATION
847,290 SHARES
OF COMMON STOCK
--------------
PROSPECTUS
--------------
June 12, 2000
================================================================================
<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:
SEC Registration fee $10,388
Printing and engraving
expenses 1,500
Legal expenses 15,000
Accounting fees and
Expenses 20,000
Miscellaneous 500
--------
Total $47,388
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.
II-1
<PAGE>
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, 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 16. Exhibits
(a) Exhibits
2.1 Agreement and Plan of Merger dated January 21, 2000 by and between QRS and
Image Info Inc.(1)
2.2 Agreement and Plan of Reorganization dated February 29, 2000 by and between
QRS and RockPort Trade Systems, Inc. (2)
4.1 Specimen of Common Stock Certificate of QRS. (3)
4.2 Registration Rights Agreement dated January 21, 2000 by and between QRS and
certain individuals listed therein. (4)
4.3 Registration Rights Agreement dated February 29, 2000 by and between QRS
and RockPort Trade Systems, Inc. (4)
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Goldstein Golub & Kessler LLP
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1
hereto).
23.4 Consent of Ernst & Young LLP
23.5 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included on page II-4 hereto).
---------------------------
(1) Incorporated by reference to Exhibit of same number filed with QRS' Current
Report on Form 8-K dated January 28, 2000 and amended on March 27, 2000.
(2) Incorporated by reference to Exhibit 2.1 filed with QRS' Current Report
on Form 8-K dated March 24, 2000.
(3) Incorporated by reference to Exhibit of same number of QRS' Registration
Statement on Form S-1 (Registration No. 33-63938).
(4) Filed previously.
(b) Financial Data Schedule
Not applicable
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
II-2
<PAGE>
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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richmond, State of California on this 12th day
of June, 2000.
QRS CORPORATION
By: /s/ John S. Simon
---------------------------------------
John S. Simon
Chief Executive Officer and Director
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below 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
* President, Chief Operating Officer and Interim
---------------------------- Chief Financial Officer (Principal Financial
Shawn M. O'Connor and Accounting Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
------------------------------------ -----------------------------------------------
<S> <C>
* Chairman of the Board of Directors
----------------------------
Peter R. Johnson
* Director
----------------------------
Tania Amochaev
* Director
----------------------------
Steven D. Brooks
* Director
----------------------------
David A. Cole
* Director
----------------------------
John P. Dougall
* Director
----------------------------
Philip Schlein
* Director
----------------------------
Garen K. Staglin
* Director
----------------------------
Garth Saloner
* By: /s/ John S. Simon
----------------------------
John S. Simon
Attorney-in-fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
2.1 Agreement and Plan of Merger dated January 21, 2000 by and between
QRS and Image Info Inc.(1)
2.2 Agreement and Plan of Reorganization dated February 29, 2000 by and
between QRS and RockPort Trade Systems, Inc.(2)
4.1 Specimen of Common Stock Certificate of QRS.(3)
4.2 Registration Rights Agreement dated January 21, 2000 by and between
QRS and certain individuals listed therein. (4)
4.3 Registration Rights Agreement dated February 29, 2000 by and between
QRS and RockPort Trade Systems, Inc. (4)
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Goldstein Golub & Kessler LLP
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1
hereto).
23.4 Consent of Ernst & Young LLP.
23.5 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on page II-4 hereto).
--------------------
(1) Incorporated by reference to Exhibit of same number filed with QRS' Current
Report on Form 8-K dated January 28, 2000 and amended on March 27, 2000.
(2) Incorporated by reference to Exhibit 2.1 filed with QRS' Current Report on
Form 8-K dated March 24, 2000.
(3) Incorporated by reference to Exhibit of same number of QRS' Registration
Statement on Form S-1 (Registration No. 33-63938).
(4) Filed previously.
