r As filed with the Securities and Exchange Commission on June 8, 2000
r Registration No. 333-34696
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
R AMENDMENT NO. 1
R TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT 0F 1933
TRACK DATA CORPORATION
(Exact name of registrant
as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
6200
(Primary Standard Industrial
Classification Code Number)
22-3181095
(IRS Employer
Identification Number)
56 PINE STREET
NEW YORK, NEW YORK 10005
(212) 422-4300
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
MARTIN KAYE, VICE PRESIDENT - FINANCE
95 ROCKWELL PLACE
BROOKLYN, NEW YORK 11217
(718) 522-0222
(Name, address, including zip code
and telephone number, including
area code, of agent for service)
Copies of all Communications to:
Oscar D. Folger, Esq.
521 Fifth Avenue
New York, New York 10175
(212) 697-6464
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
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.
r
Track Data Corporation hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
If, as a result of stock splits, stock dividends or similar transactions, the
number of securities purported to be registered on this registration statement
increases, the provisions of Rule 416 shall apply, and this registration
statement shall be deemed to cover any such additional shares of common stock.
r Subject To Completion, Dated June 8, 2000
PROSPECTUS
TRACK DATA CORPORATION
r 326,280 SHARES OF COMMON STOCK
This Prospectus covers only the registration for resale of shares of our common
stock. These shares may be offered and sold from time to time by the security
holders identified on page 9 of this prospectus. The selling security holders
will receive all of the proceeds and will pay all underwriting discounts and
selling commissions, if any, from the sale of the shares.
__________________________
r Our common stock is traded on the Nasdaq National Market System under the
symbol "TRAC." On June 7, 2000, the last reported sale price of the common
stock on Nasdaq was $1.72 per share.
See "Risk Factors" beginning on page 2 for information that should be considered
by prospective investors.
You should read the entire prospectus carefully before you make your investment
decision. You should rely only on the information contained in this prospectus
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The selling security holders are offering to
sell, and seeking offers to buy, shares of Track Data common stock only in
jurisdictions where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of the
shares.
__________________________
The SEC and state regulatory authorities have not approved or disapproved these
securities, or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
__________________________
Information contained herein is subject to completion or amendment. A
registration statement for these securities has been filed with the SEC. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of any offer to buy nor shall
there be any sale of these securities in any state in which an offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
The date of this prospectus is _________, 2000.
ABOUT TRACK DATA
Track Data provides real-time financial market data, fundamental research,
charting, and analytical services to institutional and individual investors
through dedicated telecommunication lines and the Internet. We also offer
myTrack, a fully integrated Internet-based online trading and market data
system. myTrack has offered its software-based online trading system since its
official launch in June, 1999. myTrack delivers free streaming delayed quotes
and unlimited free real-time extended quotes, as well as breaking company news,
a trade by trade log, charting for technical analysis and a proprietary library
of intraday market statistics. Users can subscribe to streaming real-time
quotes in value packages.
Track Data maintains offices in the U.S. and Europe, with its executive offices
located at 56 Pine Street, New York, New York 10005 and at 95 Rockwell Place,
Brooklyn, New York 11217. Its telephone number is 212-943-4555 or 718-522-7373.
RISK FACTORS
An investment in the offered shares involves a high degree of risk. Prospective
investors should understand that they may lose their investment and should
consider carefully the following risk factors in making their investment
decision. This prospectus contains and incorporates by reference forward-looking
statements which are intended to fall within the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Examples include the
discussion under "Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Form 10-K for the year
ended December 31, 1999. These statements are based on current expectations that
involve a number of uncertainties including those set forth in the following
risk factors. Actual results could differ materially from those results
projected in these forward-looking statements.
r EXPENSES RELATED TO THE GROWTH OF OUR BUSINESS ARE EXPECTED TO RESULT IN
LOSSES FOR THE FORESEEABLE FUTURE. We incurred an operating loss of
approximately $5,000,000 during the year ended December 31, 1999 and $1,900,000
during the three months ended March 31, 2000. We anticipate operating losses to
increase considerably as we increase customer service and support personnel and
continue to enhance our telecommunications and server capacity. Further, to
achieve our goal to become a significant competitor in the online trading
marketplace, the required expenditures for marketing and advertising will
contribute significantly to future operating losses. We are unable to predict a
future time when revenues from our customer base will be at a level to exceed
the expenditures necessary to operate profitably.
CORPORATIONS WHO HAVE GREATER FINANCIAL, TECHNICAL AND MONETARY RESOURCES THAN
WE DO COULD LIMIT OUR ABILITY TO MAINTAIN OR INCREASE MARKET SHARE. We operate
in a highly competitive market with other distributors of financial and business
information, some of whom have substantially greater financial resources. The
industry in which we compete is characterized by developments requiring rapid
adaptation to provide competitive products and services. We believe that
increased competition within the online services market could result in reduced
market share, price reductions, and increased spending on marketing and product
development, which could have a materially adverse effect on our financial
condition and increase our operating/losses.
TECHNICAL RISKS INVOLVED WITH NEW SERVICES AND PRODUCTS MAY CAUSE THEIR
INTRODUCTION TO BE UNTIMELY, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO REMAIN
COMPETITIVE. Our future success will depend in large part on our ability to
develop and enhance our services and products. We operate in a very competitive
industry in which the ability to develop and deliver advanced services through
the Internet and other channels is a key competitive factor. There are
significant technical risks in the development of new or enhanced services and
products, including the risk that we will be unable to effectively use new
technologies, adapt our services and products to emerging industry standards, or
develop, introduce and market enhanced or new services and products.
If we are unable to develop and introduce enhanced or new services and products
quickly enough to respond to market or customer requirements or to comply with
emerging industry standards, or if these services and products do not achieve
market acceptance, our business could be adversely affected resulting in
deteriorating financial condition and operating losses.
OUR BUSINESS COULD BE HARMED BY MARKET VOLATILITY AND OTHER SECURITIES INDUSTRY
RISKS. Our revenues are derived primarily from the securities industry and
related services, and we expect this business to continue to account for almost
all of our revenues. We are likely to be directly and indirectly affected by
economic and political conditions, broad trends in business and finance and
changes in the conditions of the securities markets in which our customers
trade. Over the past several years the securities markets have fluctuated
considerably. A downturn in this market could adversely affect our operating
results. Recently, the markets for technology and Internet-related stocks have
been especially volatile, and a significant downturn could have an even greater
effect on us because a substantial portion of our myTrack customers invest in
these types of stocks. In previous major stock market declines, many firms in
the securities industry suffered financial losses, and the level of individual
investor trading activity decreased after these events. When trading volume is
low, our profitability would likely be adversely affected because a significant
portion of our costs do not vary with revenue. For these reasons, severe market
fluctuations could adversely affect our business, resulting in deteriorating
financial condition and operating losses.
WE ARE HEAVILY DEPENDENT UPON ELECTRONIC SYSTEMS WHICH ARE SUBJECT TO FAILURE
DUE TO MANY FACTORS OVER WHICH WE HAVE LITTLE OR NO CONTROL. We receive and
process customer trade orders through electronic means such as the Internet and
dial-up links to our private computer networks. In addition, execution of
customer trades is made through a series of computerized processing systems and
links to third parties. Thus, we depend heavily on the capacity and reliability
of the electronic systems supporting this type of trading. Heavy use of our
systems during peak trading times or at times of unusual market volatility could
cause our systems to operate slowly or even to fail for periods of time. High
trading volume may cause significant delays in executing trading orders,
resulting in some customers' orders being executed at prices they did not
anticipate. These occurrences are dissatisfying to our customers, who may file
formal complaints with us or industry regulatory organizations, initiate
regulatory inquiries or proceedings, file lawsuits against us, switch brokers or
cease online trading altogether. While we constantly monitor system loads and
performance and regularly implement system upgrades to handle predicted
increases in trading volume and volatility, we cannot assure you that we will be
able to accurately predict such future volume increases or volatility or that
our systems will be able to accommodate such volume increases or volatility
without failure or degradation.
System failures or service interruptions could cause substantial losses for our
customers and result in decreased commission revenues from customer trading
activities and in loss of customer accounts, customer inability to satisfy
margin obligations and harm to our reputation and the perception of our trading
system's reliability. Any significant degradation or failure of our trading
systems or any other systems in the trading process could cause customers to
suffer delays in trading. During a systems failure, we may not be able to
process the volume of telephone orders placed by our customers. Additionally, a
natural disaster, power or telecommunications failure or act of war, may cause
an extended systems failure. Computer viruses or unauthorized access to or
sabotage of our network by a third party could also result in system failures or
service interruptions.
THE FUTURE SUCCESS OF OUR MARKET DATA AND ONLINE BROKERAGE BUSINESSES WILL
DEPEND ON THE CONTINUED DEVELOPMENT AND MAINTENANCE OF THE INTERNET
INFRASTRUCTURE. The Internet has experienced, and is expected to continue to
experience, significant growth in the number of users and amount of traffic. Our
future success will depend upon the development and maintenance of the
Internet's infrastructure to cope with this increased traffic. This will require
a reliable network backbone with the necessary speed, data capacity and
security, and the timely development of complementary products, such as high
speed modems, for providing reliable Internet access and services.
Many Internet service providers, which provide our customers with access to the
Internet, and other suppliers of Internet systems and components have
experienced a variety of outages and other delays as a result of damage to
portions of their infrastructure and other technical problems and could face
similar outages and delays in the future. Such outages and delays are likely to
affect the level of Internet usage and the processing of transactions and are
not within our control. In addition, the Internet could lose its viability due
to delays in the development or adoption of new standards to handle increased
levels of activity or due to increased government regulation. The adoption of
new standards or government regulation may require us to incur substantial data
processing development and compliance costs. Critical issues concerning the
commercial use of the Internet, including security, reliability, cost, ease of
use, accessibility and quality of service, remain unresolved. These issues may
negatively affect the growth of Internet use or the attractiveness of commerce
and communications on the Internet and, therefore impede our ability to grow.
WE DEPEND ON THIRD PARTIES FOR IMPORTANT ASPECTS OF OUR BUSINESS OPERATIONS. We
presently offer online trading to our myTrack customers utilizing Track
Securities Corporation as broker-dealer and Herzog, Heine, Geduld, Inc. to clear
trades for our customers. If either party were unable or unwilling to provide
these services, we would need to find a suitable replacement. The failure to
find a suitable replacement or to come to an agreement with an acceptable
alternate provider on terms acceptable to us could materially adversely affect
our business, resulting in increased operating losses and the loss of customers.
WE OPERATE IN A HIGHLY REGULATED INDUSTRY AND COMPLIANCE FAILURES COULD
ADVERSELY AFFECT OUR BUSINESS. While we are not a broker-dealer, Track
Securities is the broker-dealer for our customers and is subject to extensive
regulation covering all aspects of the securities business, including
registration of offices and personnel, sales methods, acceptance and execution
of customer orders, handling of customer funds and securities, trading
practices, capital structure, record keeping, conduct of directors, officers and
employees and supervision.
The various governmental authorities and industry self-regulatory organizations
that supervise and regulate Track Securities and our clearing firm, Herzog,
Heine, Geduld, Inc., generally have broad enforcement powers to censure, fine,
issue cease-and-desist orders or suspend or expel us or any of our officers or
employees who violate applicable laws or regulations. Their ability to comply
with all applicable laws and rules is largely dependent on their establishment
and maintenance of compliance and reporting systems, as well as their ability to
attract and retain qualified compliance and other personnel. They could be
subject to disciplinary or other regulatory or legal actions in the future due
to noncompliance.
Recently, various regulatory and enforcement agencies have been reviewing
systems capacity, customer access, best execution practices, and other service
issues as they relate to the discount and online brokerage industry. These could
result in enforcement actions, new regulations, or the retroactive application
of existing regulations, any of which could result in increased expenditures and
increased losses.
In addition, we use the Internet as a major distribution channel to provide
products and services to our customers. Due to the increasing popularity of the
Internet, it is possible that new laws and regulations may be adopted dealing
with such issues as user privacy, content and pricing. Such laws and regulations
might increase our cost of using, or limit our ability to use, the Internet as a
distribution channel, which could cause increased operating losses.
OUR OPERATIONS WOULD BE INTERRUPTED IF THE SERVICES OF OUR CLEARING BROKER, WHO
CAN CANCEL ON 30 DAYS NOTICE, ARE TERMINATED. Track Securities is dependent on
the operational capacity and the ability of its clearing broker for the orderly
processing of transactions. Track Securities' clearing agreement with Herzog may
be terminated by either party, upon 30 days prior written notice. Termination or
material interruptions of services provided by Track Securities' clearing broker
would have a material adverse effect on our delivery of services to our
customers. Track Securities' agreement with its clearing broker provides that
the clearing broker process all securities transactions for the accounts of
Track Securities customers. Services of the clearing broker includes billing and
credit extension, control and receipt, custody and delivery of securities.
COMPETITION COULD INCREASE IF THIRD PARTIES OBTAIN ACCESS TO OUR PROPRIETARY
INFORMATION OR INDEPENDENTLY DEVELOP SIMILAR TECHNOLOGIES BECAUSE OF THE LIMITED
PROTECTION FOR OUR INTELLECTUAL PROPERTY. Third parties may copy or obtain and
use our proprietary technologies, ideas, know-how and other proprietary
information without authorization or independently develop technologies similar
or superior to our technologies. Policing unauthorized use of our technologies
and other intellectual property is difficult, particularly because the global
nature of the Internet makes it difficult to control the ultimate destination or
security of software or other data transmitted. Furthermore, the laws of other
jurisdictions may afford little or no effective protection of our intellectual
property rights. Increased competition could result in increased operating
losses.
r OUR PRINCIPAL STOCKHOLDER MAY BE ABLE TO CONTROL MATTERS REQUIRING A
STOCKHOLDER VOTE, SUCH AS UNSOLICITED TAKEOVERS WHICH MAY PREVENT INVESTORS FROM
RECEIVING A PREMIUM ON THEIR SHARES. As of April 30, 2000, Barry Hertz, Track
Data's Chairman, directly or indirectly controlled 26,175,261 shares of Track
Data's common stock or approximately 41% of our shares. He may be in a position
to control the outcome of matters requiring a stockholder vote, including the
election of directors. Such control could have the effect of discouraging, or
making more difficult, an unsolicited acquisition of us by means of a tender
offer, a proxy contest or otherwise, even though an unsolicited acquisition
could have resulted in our stockholders receiving a premium for their shares or
be otherwise economically beneficial to them.
OUR EXECUTIVE OFFICERS DO NOT HAVE EMPLOYMENT CONTRACTS AND MAY LEAVE AT ANY
TIME. Our success is highly dependent upon the efforts and abilities of our
executive officers, particularly Mr. Barry Hertz, the Chairman of the Board and
Chief Executive Officer. The loss of services of one or more of our executive
officers for any reason may result in extensive search costs, expensive
replacement costs, and loss of that executive's expertise.
OUR RIGHT TO ISSUE PREFERRED STOCK COULD DILUTE OR DIMINISH THE VALUE OF
EXISTING INVESTORS' COMMON STOCK. Our governing documents authorize the issuance
of up to one million shares of preferred stock without stockholder approval,
with dividend, liquidation, conversion, voting or other rights which could
adversely affect the voting power or other rights of the holders of our common
stock. Depending on the designations, rights and preferences of a particular
issuance of preferred stock, such issuance could adversely affect the market
value of our common stock.
OUR RIGHT TO ISSUE PREFERRED STOCK COULD MAKE A THIRD-PARTY ACQUISITION OF US
DIFFICULT. Our governing documents authorize the issuance of up to one million
shares of preferred stock without stockholder approval, with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of our common stock. In the event
of issuance, the preferred stock could be utilized, under certain circumstances,
as a method of discouraging, delaying or preventing a change in control.
Although we have no present intention to issue any shares of preferred stock,
there can be no assurance that we will not do so in the future.
SUCCESS OF STOCKHOLDER ACTIONS AGAINST DIRECTORS IS LESS LIKELY AS OUR
DIRECTORS' LIABILITY FOR THEIR ACTIONS IS LIMITED AND WE MAY INDEMNIFY THEM IF
THEY ARE SUED. Our governing documents limit the liability of our directors for
breach of their fiduciary duty of care. The effect is to eliminate liability of
directors for monetary damages arising out of negligent or grossly negligent
conduct. Stockholder actions against a director of Track Data for monetary
damages can only be maintained upon a showing of certain factors and not for
such director's negligence or gross negligence in satisfying his duty of care.
The factors required to obtain monetary damages are a breach of the individual
director's duty of loyalty to Track Data, a failure to act in good faith,
intentional misconduct, a knowing violation of the law, an improper personal
benefit, or an illegal dividend or stock purchase. These documents also provide
for indemnification as permitted by Delaware law. However, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling Track Data pursuant to
the foregoing provisions, we have been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
IT IS UNLIKELY THAT WE WILL PAY DIVIDENDS. We have not paid any cash dividends
since our inception and do not anticipate paying any cash dividends in the
foreseeable future. There can be no assurance that our operations will result
in sufficient earnings to enable us to pay dividends. It is anticipated that
earnings, if any, will be used to finance our growth.
DOCUMENTS INCORPORATED BY REFERENCE
The Securities and Exchange Commission ("SEC") allows us to "incorporate" into
this prospectus information we file with the SEC in other documents. This means
that we can disclose important information to you by referring to other
documents that contain that information. The information may include documents
filed after the date of this prospectus which update and supersede the
information you read in this prospectus. We incorporate by reference the
documents listed below, except to the extent information in those documents is
different from the information contained in this prospectus, and all future
documents filed with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act until we terminate the offering of these shares.
The following documents of our Company which have been filed with the SEC are
hereby incorporated by reference in this prospectus:
SEC Filing Content
Annual Report on Form 10-K Year ended December 31, 1999
r Quarterly Report on Form 10-Q Quarter ended March 31, 2000
r Current Report on Form 8-K Item 5. Other Events as of April 17, 2000
You may request a copy of these documents, at no cost, by writing to:
Track Data Corporation
95 Rockwell Place
Brooklyn, NY 11217
Attention: Investor Relations
Telephone: (718) 522-7373
MATERIAL DEVELOPMENTS
r Since Track Data's most recent filing on Form 10-Q for the quarter ended March
31, 2000, there were no material developments. The Company rescinded and/or
terminated agreements with USABancShares.com, Inc. and two other companies that
provided for minority interest investments in connection with various joint
business arrangements. On June 1, 2000, the Board of Directors authorized the
purchase of up to 2,000,000 shares of the Company's common stock in market
transactions from time to time.
DESCRIPTION OF COMMON STOCK
Track Data is authorized to issue 300,000,000 shares of common stock, $.01 par
value. All of the outstanding shares of common stock are fully paid, validly
issued and non-assessable.
Holders of shares of common stock are entitled to share equally on a per share
basis in such dividends as may be declared by the Board of Directors out of
funds legally available therefor. There are presently no plans to pay dividends
with respect to the shares of common stock. Upon liquidation, dissolution or
winding up of Track Data, after payment of creditors and the holders of any
senior securities, the assets will be divided pro rata on a per share basis
among the holders of shares of common stock. There are no conversion or
redemption privileges nor any sinking fund provisions with respect to the common
stock, nor are there any preemption rights.
Holders of shares of common stock are entitled to cast one vote for each share
held at all stockholders' meetings for all purposes, including the election of
directors. The common stock does not have cumulative voting rights, which means
that the holders of more that 50% of the common stock can elect 100% of the
Directors if they choose to do so. The By-laws require that only a majority of
the issued and outstanding shares of common stock need be represented to
constitute a quorum and to transact business at a stockholders' meeting.
USE OF PROCEEDS
All of the shares of common stock are being sold by the selling security holders
for their own account. We will not receive any of the proceeds from the sale of
any shares. We have agreed to pay the expenses of registration of the common
stock, including a certain amount of legal and accounting fees. See "Plan of
Distribution."
SELLING SECURITY HOLDERS
The following table sets forth the names of the selling security holders, the
number of shares of common stock owned beneficially by each selling security
holder as of the date of this prospectus and the number of shares that may be
offered pursuant to this prospectus. This information is based upon information
provided by the selling security holder.
No estimate can be given as to the number of shares that will be held by any
selling security holder after completion of this offering because they 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 security holder named below.
<TABLE>
<CAPTION>
<S> <C> <C>
Number Number of
of Shares Shares
Beneficially Registered
r Name of Selling Security Holder Owned for Sale(1)
--------------------------------- ------------ -----------
iAnalyst, Inc. 176,280 176,280
Silicon Summit Technologies, Inc. 150,000 150,000
</TABLE>
(1) This registration statement also shall cover any additional shares of
common stock which become issuable in connection with any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of
outstanding shares of common stock.
PLAN OF DISTRIBUTION
The selling security holders have indicated they are acting independently from
us in determining the manner and extent of sales of the shares of our common
stock.
This prospectus covers only the registration for resale of shares of Track
Data's common stock. Although all of the shares are being registered for public
sale, the sale of any or all of such shares by the selling security holders may
depend on the sale price of such shares and market conditions generally
prevailing at the time.
The selling security holders have severally advised us that:
- the shares may be sold by the selling security holders or their respective
pledgees, donees, transferees or successors in interest, in sales occurring in
the public market, in privately negotiated transactions, in block trades,
through the writing of options on shares, hedging transactions, short sales,
direct sales to one or more purchasers, or in a combination of such
transactions;
- each sale may be made either at market prices prevailing at the time of
such sale, at a fixed offering price, at varying prices determined at the time
of sale, or at negotiated prices;
- some or all of the shares may be sold through brokers acting on behalf of
the selling security holders or to dealers for resale by such dealers;
- in connection with such sales, such brokers and dealers may receive
compensation in the form of discounts and commissions from the selling
stockholders and may receive commissions from the purchasers of shares for whom
they act as broker or agent (which discounts and commissions may be less than or
exceed those customary in the types of transactions involved). Any broker or
dealer participating in any such sale may be deemed to be an "underwriter"
within the meaning of the Securities Act and will be required to deliver a copy
of this prospectus to any person who purchases any common stock from or through
such broker or dealer.
In offering the common stock covered by this prospectus, the selling security
holders and any broker-dealers and any other participating broker-dealers who
execute sales for the selling stockholders could be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the selling stockholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions. In
addition, any shares of common stock covered by this prospectus which qualify
for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus.
In order to comply with certain states' securities laws, if applicable, the
shares of common stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states, the shares of
common stock may not be sold unless they have been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.
The selling security holders have severally agreed to indemnify and hold us and
our officers and directors harmless, with respect to any losses resulting from
any untrue statement of a material fact in, or omission of a material fact from,
this prospectus or the registration statement of which it is a part, including
amendments and supplements, if such statement or omission was contained in
information furnished to us in writing by such selling security holder
specifically for inclusion in this prospectus or registration statement.
We will not pay selling or other expenses incurred in the offering, including
the discounts and commissions of broker-dealers. We have agreed to indemnify
the selling security holders against certain civil liabilities, including
liabilities under the Securities Act, in connection with the shares described in
this prospectus.
EXPERTS
The consolidated financial statements of Track Data Corporation and Innodata
Corporation incorporated in this Prospectus by reference from the Company's
Annual Report on Form 10-K for each of the three years in the period ended
December 31, 1999 have been audited by Grant Thornton LLP, independent certified
public accountants, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the validity of the securities offered
by this Prospectus will be passed on for the Company by Oscar D. Folger, Esq.,
New York, New York. Mr. Folger is entitled to receive 122,248 shares of our
common stock pursuant to a Track Data phantom stock plan at the time he no
longer performs services for us, or earlier with the approval of the Board of
Directors. Mr. Folger also has options to purchase 50,000 shares of the
Company's common stock.
WHERE YOU CAN FIND MORE INFORMATION
r We file annual, quarterly, and current reports, proxy statements, and other
documents with the SEC. You may read and copy any document we file at the SEC's
public reference room at Judiciary Plaza Building, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the public reference room. The SEC maintains an Internet site at
http://www.sec.gov where certain information regarding issuers, including Track
Data Corporation, may be found. This prospectus is part of a registration
statement that we filed with the SEC, registration No. 333-34696. The
registration statement contains more information than this prospectus regarding
the Company and its common stock, including certain exhibits and schedules. You
can get a copy of the registration statement from the SEC at the address listed
above or from its Internet site.
TRACK DATA CORPORATION
r 326,280 SHARES OF COMMON STOCK
__________________________
PROSPECTUS
__________________________
, 2000
II-5
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Registration Fee $ 3,684.77
Accounting Fees and Expense 4,500.00
Legal Fees and Expenses 1,500.00
Miscellaneous 315.23
Total $10,000.00
All fees and expenses other than the SEC registration fee are estimated. The
expenses listed above will be paid by Track Data.
ITEM 15. Indemnification of Directors and Officers.
The Company has entered into agreements with each director in which the Company
agrees to indemnify each director and officer to the maximum extent permitted by
law.
The Company's Certificate of Incorporation provides that all directors,
officers, employees and agents of the Registrant shall be entitled to be
indemnified by the Company to the fullest extent permitted by law. The
Certificate of Incorporation also provides as follows:
A director, or former director, shall not be liable to the corporation or to any
of its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that this provision shall not eliminate or limit the
liability of a director: (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the General Corporation Law of the State of Delaware,
pertaining to the liability of directors for unlawful payment of dividends or
unlawful stock purchase or redemption; or (iv) for any transaction from which
the director derived an improper personal benefit.
Section 145 of the Delaware General Corporation Law concerning indemnification
of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents;
insurance.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such persons shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer, to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, (the "Securities Act") may be permitted to directors,
officers, and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company 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 Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to the court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
ITEM 16. Exhibits.
<TABLE>
<CAPTION>
<C> <C> <S>
(23) (a) Consent of Oscar D. Folger (includes opinon required by Exhibit 5)
(23) (b) Consent of Grant Thornton LLP
</TABLE>
ITEM 17. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) 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 to such information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities Act if,
in the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 in the information set forth in the registration statement;
Provided, however, that paragraphs (1)(a)(i) and (1)(a)(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 those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(b) 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.
(c) 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.
2. 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in 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.
3. 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 liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of Track
Data Corporation 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, Track Data Corporation 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.
SIGNATURES
r Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York on the 5 day of June 2000.
TRACK DATA CORPORATION
By /s/
Barry Hertz
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date stated.
<TABLE>
<CAPTION>
<S> <C> <C>
-------------------
SIGNATURE TITLE DATE
------------------- ----------------------------------- --------------
/s/ Chairman of the Board and r June 5, 2000
-------------------
Barry Hertz Chief Executive Officer
/s/ Senior Vice President and Director r June 5, 2000
-------------------
Alan Schnelwar
/s/ Vice President - Finance, Secretary r June 5, 2000
-------------------
Martin Kaye and Director
/s/ Director r June 5, 2000
-------------------
E. Bruce Fredrikson
/s/ Director r June 5, 2000
-------------------
Morton Mackof
/s/ Director r June 5, 2000
-------------------
Jack Spiegelman
/s/ Director r June 5, 2000
-------------------
Stanley Stern
</TABLE>
EXHIBIT 23(a)
LAWYERS OPINION AND CONSENT
r We have acted as counsel to Track Data Corporation, a Delaware corporation
(the "Company") in connection with the registration by the Company of 326,280
shares of its common stock, $.01 par value (the "Shares"). The Shares are the
subject of a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Act"). As counsel to the Company we have examined and
relied upon the original or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments as we
have deemed necessary in order to render the following opinion.
Based upon the foregoing, we are of the opinion that the Shares are duly
authorized, validly issued and fully paid and nonassessable.
We are aware that we are referred to under the caption "Legal Matters" in the
Prospectus included in the Registration Statement and we hereby consent to such
reference to us and to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving such consent, however, we do not hereby admit
that we are within the category of persons whose consent is required under
Section 7 of the Act or under the General Rules and Regulations of the
Securities and Exchange Commission adopted thereunder.
Oscar D. Folger
Law Offices of Oscar D. Folger
New York, New York
r June 5, 2000
EXHIBIT 23(b)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 25, 2000 accompanying the
consolidated financial statements of Track Data Corporation and subsidiaries and
our report dated March 2, 2000 accompanying the consolidated financial
statements of Innodata Corporation and subsidiaries appearing in the Track Data
Corporation Annual Report on Form 10-K for the year ended December 31, 1999
which are incorporated by reference in this Registration Statement. We consent
to the incorporation by reference in the Registration Statement of the
aforementioned reports and to the use of our name as it appears under the
caption "Experts."
GRANT THORNTON LLP
Melville, New York
r June 5, 2000
