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As filed with the Securities & Exchange Commission on September 28, 2000
Registration No. 333-_____
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WEBB INTERACTIVE SERVICES, INC.
(Exact name of registrant as specified in its charter)
Colorado
(State or other jurisdiction of incorporation or organization)
84-1293864
(I.R.S. Employer Identification No.)
1899 Wynkoop, Suite 600
Denver, Colorado 80202
(303) 296-9200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Perry Evans
Webb Interactive Services, Inc.
1899 Wynkoop, Suite 600
Denver, Colorado 80202
(303) 296-9200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: As soon
as practicable 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.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for 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 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
Title of each class Proposed maximum
of securities to be Amount to be Maximum offering aggregate offering Amount of
registered registered price per unit (1) price (1) registration fee
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par 1,361,112(2) $8.8125 $11,994,799 $3,166.63
value
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of Regulation C as of the close of the market on
September 27, 2000.
(2) Common stock issuable upon conversion of Webb's series B-2 convertible
preferred stock. The shares include any additional shares issued to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer of sale is not
permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 28, 2000 PROSPECTUS
WEBB INTERACTIVE SERVICES, INC.
This is a public offering of a maximum of 1,361,112 shares of common stock
of Webb Interactive Services, Inc., which are reserved for issuance upon
conversion of our series B-2 convertible preferred stock.
The selling shareholders are offering all of the shares to be sold. We will
not receive any of the proceeds from the offer and sale of the shares.
The Nasdaq National Market lists our common stock under the symbol WEBB.
Investing in our common stock involves risks. You should not purchase our
common stock unless you can afford to lose your entire investment. See "Risk
Factors" beginning on page 2 of this prospectus.
Because the selling shareholders will offer and sell the shares at various
times, we have not included in this prospectus information about the price to
the public of the shares or the proceeds to the selling shareholders.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed on the
adequacy of the disclosures in this prospectus. Any representation to the
contrary is a criminal offense.
The date of this prospectus is ________ __, 2000
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WEBB INTERACTIVE SERVICES, INC.
Webb provides innovative advanced online commerce and communication
solutions for small businesses, with a particular emphasis on local commerce
interaction. Our AccelX product line of XML-based commerce and buyer-seller
interaction products and services provides businesses with powerful web-site
development and communication tools to attract customers, generate leads,
increase buyer-seller interaction and strengthen customer relationship
management. The AccelX services are divided into two categories: Customer
Relationship Management Services and Marketplace Services.
We distribute our AccelX products and services on a private-label basis to
high-volume distribution partners such as yellow page directory publishers,
newspapers, city guides, vertical market portals and other aggregators of local
businesses. Our AccelX products may be either licensed or delivered on an
application service provider business model whereby we host the software on our
servers and deliver and manage the service on behalf of our distribution
partners. Generally, these services are provided on a revenue-share basis
providing us with recurring revenues as our distribution partners sell these
services to their small business customers. This distribution model is designed
to provide us with a growing base of businesses using one or more of our
services who are ideal customers for additional AccelX services.
Prior to January 2000, we were organized around our primary market focus on
local commerce services, with an additional business unit dedicated to e-banking
services. In the local commerce segment, we target small and medium sized
businesses with our AccelX products and services supporting XML-based commerce
and buyer-seller interaction. On September 12, 2000, we completed the sale of
our e-banking business to a privately-held venture capital-backed company. In
January 2000, we formed a new subsidiary in order to commercialize separately
the Jabber.org instant messaging system from our AccelX business. We intend to
seek significant participation from external partners to help us maximize the
value of the instant messaging businesses.
During July 2000, working with Diamond Technology Partners, Inc., we
completed a business plan for our Jabber.com subsidiary. The plan focuses
Jabber.com's business development efforts on three areas:
. Providing professional services to help companies implement, customize and
host instant messaging applications;
. Developing outsourced solutions for instant messaging services for
businesses, utilizing an application service provider business model; and
. Developing open gateway services through strategic relationships with
companies in the areas of Internet protocol telephony, mobile services,
customer services and exchange services.
Jabber.com is engaged in the early stages of several projects that are
implementing the Jabber.org XML-based open-source instant messaging platform for
portal services, enterprise messaging, financial services applications and
enhanced mobile and telephony integration. Jabber.com is continuing to work
with Diamond Technology Partners, Inc. to develop enterprise level services
based on Jabber's version 1.0 server and to establish strategic partnerships
with investors and businesses that share a common vision of the opportunity for
next generation instant communications.
We were incorporated under the laws of the State of Colorado on March 22,
1994. Our executive offices are located at 1899 Wynkoop, Suite 600, Denver,
Colorado 80202, telephone number (303) 296-9200.
RISK FACTORS
Our limited operating history could affect our business. We were founded in
March 1994 and commenced sales in February 1995. Subsequently, our business
model has changed periodically to reflect changes in technology and markets.
Accordingly, we have a limited operating history for our current business model
upon which you may evaluate us. Our business is subject to the risks, expenses
and difficulties frequently encountered by companies with a limited operating
history including:
. Limited ability to respond to competitive developments;
. Exaggerated effect of unfavorable changes in general economic and market
conditions;
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. Ability to attract qualified personnel;
. Ability to develop and introduce new product and service offerings; and
. Ability to adjust the business plan to address marketplace and
technological changes.
There is no assurance we will be successful in addressing these risks. If we
are unable to successfully address these risks our business could be
significantly adversely affected.
We have accumulated losses since inception and we anticipate that we will
continue to accumulate losses for the foreseeable future. We have incurred net
losses since inception totalling approximately $67.9 million through June 30,
2000. In addition, we expect to incur additional substantial operating and net
losses in 2000 and for one or more years thereafter. We expect to incur these
additional losses because:
. We currently intend to increase our capital expenditures and operating
expenses to expand the functionality and performance of our products and
services; and
. We recorded goodwill and other intangible assets totalling approximately
$24 million in connection with the acquisitions of three businesses
which will be amortized over their estimated useful lives of
approximately three years.
The accumulated deficit at June 30, 2000, included approximately $37.8
million of non-cash expenses related to the issuance of preferred stock and
warrants in financing transactions, stock and stock options issued for services,
warrants issued to four customers, interest expense on a 10% convertible note
payable and amortization of assets acquired through the issuance of our
securities. The current competitive business environment may result in our
issuance of similar securities in future financing transactions or to other
companies as an inducement for them to enter into a business relationship with
us. While these transactions represent non-cash charges, they will increase our
expenses and net loss and our net loss applicable to common shareholders.
If we are unable to raise additional working capital funds, we may not be
able to sustain our operations. We believe that our present cash and cash
equivalents, working capital and commitments for additional equity investments
will be adequate to sustain our current level of operations for our AccelX
business throughout fiscal 2001; assuming that we do not use a significant
portion of our current funds to pursue the business opportunities for our
Jabber.com subsidiary. We currently intend to fund Jabber.com's activities
independently of our AccelX business. However, we may discover that we have
underestimated our working capital needs, for our local commerce business or
that we are unable to obtain capital for Jabber.com. We may, therefore, need to
obtain additional funds for our AccelX business prior to 2002. There is no
assurance that we will be able to raise additional funds if required in amounts
required or upon acceptable terms. If we cannot raise additional funds when
needed, we may be required to curtail or scale back our operations. These
actions could have a material adverse effect on our business, financial
condition or results of operations.
We may never become or remain profitable. Our ability to become profitable
depends on the ability of our products and services to generate revenues. The
success of our revenue model will depend upon many factors including:
. The success of our distribution partners in marketing their products and
services; and
. The extent to which consumers and businesses use our services and
conduct e-commerce transactions and advertising utilizing our services.
Because of the new and evolving nature of the Internet, we cannot predict
whether our revenue model will prove to be viable, whether demand for our
products and services will materialize at the prices we expect to charge, or
whether current or future pricing levels will be sustainable. Additionally, our
customer contracts may result in significant development revenue in one quarter,
which will not recur in the next quarter for that customer. As a result, it is
likely that components of our revenue will be volatile, which may cause our
stock price to be volatile as well.
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Our business depends on the growth of the Internet. Our business plan
assumes that the Internet will develop into a significant source of
communication and communication interactivity. However, the Internet market is
new and rapidly evolving and there is no assurance that the Internet will
develop in this manner. If the Internet does not develop in this manner, our
business, operating results and financial condition would be materially
adversely affected. Numerous factors could prevent or inhibit the development of
the Internet in this manner, including:
. The failure of the Internet's infrastructure to support Internet usage
or electronic commerce;
. The failure of businesses developing and promoting Internet commerce to
adequately secure the confidential information, such as credit card
numbers, needed to carry out Internet commerce; and
. Regulation of Internet activity.
Use of many of our products and services will be dependent on distribution
partners. Because we have elected to partner with other companies for the
distribution of many of our products and services, many users of our products
and services are expected to utilize our services through our distribution
partners. As a result, our distribution partners, and not us, will
substantially control the customer relationship with these users. If the
business of the companies with whom we partner is adversely affected in any
manner, our business, operating results and financial condition could be
materially adversely affected.
We may be unable to develop desirable products. Our products are subject to
rapid obsolescence and our future success will depend upon our ability to
develop new products and services that meet changing customer and marketplace
requirements. There is no assurance that we will be able to successfully:
. Identify new product and service opportunities; or
. Develop and introduce new products and services to market in a timely
manner.
If we are unable to accomplish these items, our business, operating results
and financial condition could be materially adversely affected.
Our products and services may not be successful. A suitable market for our
products and services may not develop. Even if we are able to successfully
identify, develop, and introduce new products and services there is no assurance
that a market for these products and services will materialize to the size and
extent that we anticipate. If a market does not materialize as we anticipate,
our business, operating results, and financial condition could be materially
adversely affected. The following factors could affect the success of our
products and services and our ability to address sustainable markets:
. The failure of our business plan to accurately predict the rate at which
the market for Internet products and services will grow;
. The failure of our business plan to accurately predict the types of
products and services the future Internet marketplace will demand;
. Our limited experience in marketing our products and services;
. The failure of our business plan to accurately predict our future
participation in the Internet marketplace;
. The failure of our business plan to accurately predict the estimated
sales cycle, price and acceptance of our products and services;
. The development by others of products and services that renders our
products and services noncompetitive or obsolete; or
. Our failure to keep pace with the rapidly changing technology, evolving
industry standards and frequent new product and service introductions
that characterize the Internet marketplace.
The intense competition that is prevalent in the Internet market could have
a material adverse effect on our business. Our current and prospective
competitors include many companies whose financial, technical, marketing and
other resources are substantially greater than ours. There is no assurance that
we will have the financial resources, technical expertise or marketing, sales
and support capabilities to compete successfully. The presence of these
competitors in the Internet marketplace could have a material adverse effect on
our business, operating results or financial condition by causing us to:
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. Reduce the average selling price of our products and services; or
. Increase our spending on marketing, sales and product development.
There is no assurance that we would be able to offset the effects of any
such price reductions or increases in spending through an increase in the number
of our customers, higher sales from premium services, cost reductions or
otherwise. Further, our financial condition may put us at a competitive
disadvantage relative to our competitors. If we fail to, or cannot, meet
competitive challenges, our business, operating results and financial condition
could be materially adversely affected.
A limited number of our customers generate a significant portion of our
revenues. We had three customers representing 44% of revenues for the three
months ended June 30, 2000, and three customers representing 61% of revenues for
the similar 1999 period. We had two customers representing 47% of revenues for
the six months ended June 30, 2000, and three customers representing 75% of
revenues for the similar 1999 period. There is no assurance that we will be
able to attract or retain major customers. The loss of, or reduction in demand
for products or services from major customers could have a material adverse
effect on our business, operating results, cashflow and financial condition.
The sales cycle for our products and services is lengthy and unpredictable.
While our sales cycle varies from customer to customer, it typically has ranged
from two to six months. Our pursuit of sales leads typically involves an
analysis of our prospective customer's needs, preparation of a written proposal,
one or more presentations and contract negotiations. We often provide
significant education to prospective customers regarding the use and benefits of
our Internet technologies and services. Our sales cycle may also be affected by
a prospective customer's budgetary constraints and internal acceptance reviews,
over which we have little or no control. In order to quickly respond to, or
anticipate, customer requirements, we may begin development work prior to having
a signed contract, which exposes us to the risk that the development work will
not be recovered from revenue from that customer.
We may be unable to adjust our spending to account for potential
fluctuations in our quarterly results. As a result of our limited operating
history, we do not have historical financial data for a sufficient number of
periods on which to base planned operating expenses. Therefore, our expense
levels are based in part on our expectations as to future sales and to a large
extent are fixed. We typically operate with little backlog and the sales cycles
for our products and services may vary significantly. As a result, our quarterly
sales and operating results generally depend on the volume and timing of and the
ability to close customer contracts within the quarter, which are difficult to
forecast. We may be unable to adjust spending in a timely manner to compensate
for any unexpected sales shortfalls. If we were unable to so adjust, any
significant shortfall of demand for our products and services in relation to our
expectations would have an immediate adverse effect on our business, operating
results and financial condition. Further, we currently intend to increase our
capital expenditures and operating expenses to fund product development and
increase sales and marketing efforts. To the extent that such expenses precede
or are not subsequently followed by increased sales, our business, operating
results and financial condition will be materially adversely affected.
We may be unable to retain our key executives and research and development
personnel. Our future success also depends in part on our ability to identify,
hire and retain additional personnel, including key product development, sales,
marketing, financial and executive personnel. Competition for such personnel is
intense and there is no assurance that we can identify or hire additional
qualified personnel.
Executives and research and development personnel who leave us may compete
against us in the future. We generally enter into written nondisclosure and
nonsolicitation agreements with our officers and employees which restrict the
use and disclosure of proprietary information and the solicitation of customers
for the purpose of selling competing products or services. However, we
generally do not require our employees to enter into non-competition agreements.
Thus, if any of these officers or key employees left, they could compete with
us, so long as they did not solicit our customers. Any such competition could
have a material adverse effect on our business.
We may be unable to manage our expected growth. If we are able to implement
our growth strategy, we will experience significant growth in the number of our
employees, the scope of our operating and financial systems and the geographic
area of our operations. There is no assurance that we will be able to implement
in whole or in part our growth strategy or that our management or other
resources will be able to successfully manage any future
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growth in our business. Any failure to do so could have a material adverse
effect on our operating results and financial condition.
We may be unable to protect our intellectual property rights. Intellectual
property rights are important to our success and our competitive position.
There is no assurance that the steps we take to protect our intellectual
property rights will be adequate to prevent the imitation or unauthorized use of
our intellectual property rights. Policing unauthorized use of proprietary
systems and products is difficult and, while we are unable to determine the
extent to which piracy of our software exists, we expect software piracy to be a
persistent problem. In addition, the laws of some foreign countries do not
protect software to the same extent as do the laws of the United States. Even
if the steps we take to protect our proprietary rights prove to be adequate, our
competitors may develop services or technologies that are both non-infringing
and substantially equivalent or superior to our services or technologies.
Computer viruses and similar disruptive problems could have a material
adverse effect on our business. Our software and equipment may be vulnerable to
computer viruses or similar disruptive problems caused by our customers or other
Internet users. Our business, financial condition or operating results could be
materially adversely affected by:
. Losses caused by the presence of a computer virus that causes us or
third parties with whom we do business to interrupt, delay or cease
service to our customers;
. Losses caused by the misappropriation of secured or confidential
information by a third party who, in spite of our security measures,
obtains illegal access to this information;
. Costs associated with efforts to protect against and remedy security
breaches; or
. Lost potential revenue caused by the refusal of consumers to use our
products and services due to concerns about the security of transactions
and commerce that they conduct on the Internet.
Future government regulation could materially adversely affect our
business. There are currently few laws or regulations directly applicable to
access to, communications on, or commerce on the Internet. Therefore, we are not
currently subject to direct regulation of our business operations by any
government agency, other than regulations applicable to businesses generally.
Due to the increasing popularity and use of the Internet, however, federal,
state, local, and foreign governmental organizations are currently considering a
number of legislative and regulatory proposals related to the Internet. The
adoption of any of these laws or regulations may decrease the growth in the use
of the Internet, which could, in turn:
. Decrease the demand for our products and services;
. Increase our cost of doing business; or
. Otherwise have a material adverse effect on our business, results of
operations and financial condition.
Moreover, the applicability to the Internet of existing laws governing
issues such as property ownership, copyright, trademark, trade secret,
obscenity, libel and personal privacy is uncertain and developing. Our business,
results of operations and financial condition could be materially adversely
affected by the application or interpretation of these existing laws to the
Internet.
Our articles of incorporation and bylaws may discourage lawsuits and other
claims against our directors. Our articles of incorporation provide, to the
fullest extent permitted by Colorado law, that our directors shall have no
personal liability for breaches of their fiduciary duties to us. In addition,
our bylaws provide for mandatory indemnification of directors and officers to
the fullest extent permitted by Colorado law. These provisions may reduce the
likelihood of derivative litigation against directors and may discourage
shareholders from bringing a lawsuit against directors for a breach of their
duty.
The price of our common stock has been highly volatile due to factors that
will continue to affect the price of our stock. Our common stock closed as high
as $67.75 per share and as low as $8.50 per share between January 1, 2000 and
September 28, 2000. Historically, the over-the-counter markets for securities
such as our common stock have experienced extreme price and volume fluctuations.
Some of the factors leading to this volatility include:
. Price and volume fluctuations in the stock market at large that do not
relate to our operating performance;
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. Fluctuations in our quarterly revenue and operating results;
. Announcements of product releases by us or our competitors;
. Announcements of acquisitions and/or partnerships by us or our
competitors; and
. Increases in outstanding shares of common stock upon exercise or
conversion of derivative securities.
These factors may continue to affect the price of our common stock in the
future.
We have issued numerous options, warrants, and convertible securities to
acquire our common stock that could have a dilutive effect on our shareholders.
As of September 30, 2000, we had issued warrants and options to acquire
4,338,041 shares of our common stock, exercisable at prices ranging from $3.75
to $58.75 per share, with a weighted average exercise price of approximately
$14.01 per share. In addition to these warrants and options, we have reserved
1,624,474 shares of common stock for issuance upon conversion of our 10%
convertible note and series B-2 convertible preferred stock. During the terms
of these derivative securities, the holders will have the opportunity to profit
from an increase in the market price of our common stock with resulting dilution
to the holders of shares who purchased shares for a price higher than the
respective exercise or conversion price. In addition, the increase in the
outstanding shares of our common stock as a result of the exercise or conversion
of these derivative securities could result in a significant decrease in the
percentage ownership of our common stock by the purchasers of our common stock.
The potentially significant number of shares issuable upon conversion of
our 10% convertible note and series B-2 convertible preferred stock could make
it difficult to obtain additional financing. Due to the significant number of
shares of our common stock which could result from a conversion of our 10%
convertible note and series B-2 convertible preferred stock, new investors may
either decline to make an investment in Webb due to the potential negative
effect this additional dilution could have on their investment or require that
their investment be on terms at least as favorable as the terms of the 10%
convertible note or series B-2 convertible preferred stock. If we are required
to provide similar terms to obtain required financing in the future, the
potential adverse effect of these existing financings could be perpetuated and
significantly increased.
Future sales of our common stock in the public market could adversely
affect the price of our common stock. Sales of substantial amounts of common
stock in the public market that is not currently freely tradable, or even the
potential for such sales, could have an adverse affect on the market price for
shares of our common stock and could impair the ability of purchasers of our
common stock to recoup their investment or make a profit. As of September 30,
2000, these shares consist of:
. Approximately 310,000 shares owned by our executive officers and
directors of our outstanding common stock ("Affiliate Shares");
. Up to 1,624,474 shares issuable upon conversion of the 10% convertible
note and series B-2 preferred stock; and
. Approximately 4,338,041 shares issuable to warrant and option holders.
Unless the Affiliate Shares are further registered under the securities
laws, they may not be resold except in compliance with Rule 144 promulgated by
the SEC, or some other exemption from registration. Rule 144 does not prohibit
the sale of these shares but does place conditions on their resale which must be
complied with before they can be resold.
Future sales of our common stock in the public market could limit our
ability to raise capital. Sales of substantial amounts of our common stock in
the public market pursuant to Rule 144, upon exercise or conversion of
derivative securities or otherwise, or even the potential for such sales, could
affect our ability to raise capital through the sale of equity securities.
Provisions in our articles of incorporation allow us to issue shares of
stock that could make a third party acquisition of us difficult. Our Articles of
Incorporation authorize our Board of Directors to issue up to 60,000,000 shares
of common stock and 5,000,000 shares of preferred stock in one or more series,
the terms of which may be determined at the time of issuance by the Board of
Directors, without further action by our shareholders. Preferred stock
authorized by the Board of Directors may include voting rights, preferences as
to dividends and liquidation, conversion and redemptive rights and sinking fund
provisions. If the Board of Directors authorizes the issuance of preferred stock
in the future, this authorization could affect the rights of the holders of
common stock, thereby
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reducing the value of the common stock, and could make it more difficult for a
third party to acquire us, even if a majority of the holders of our common stock
approved of an acquisition.
The issuance of our 10% convertible note payable and series B and series B-
2 convertible preferred stock required us to record non-cash expenses which
will, in turn, increase our net loss applicable to common shareholders. Based on
current accounting standards, we recorded a non-cash expense of approximately
$154,353 as additional interest expense for the three months ended June 30,
2000, and approximately $229,214 as additional interest expense and $12.5
million of accretion expense for the six months ended June 30, 2000, as a result
of the issuance of our 10% convertible note and the issuance of our series B
preferred stock, respectively. We will record additional non-cash expenses of
approximately $340,000 during the remainder of 2000 and $409,000 during the two
years ending December 31, 2002, related to the issuance of the note unless it is
converted to common stock prior to its maturity date, in which case it will be
less.
We do not anticipate paying dividends on our common stock for the
foreseeable future. We have never paid dividends on our common stock and do not
intend to pay any dividends on our common stock in the foreseeable future. Any
decision by us to pay dividends on our common stock will depend upon our
profitability at the time, cash available therefore, and other factors. We
anticipate that we will devote profits, if any, to our future operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements made in this prospectus and the documents
incorporated by reference in this prospectus under the captions "Webb
Interactive Services, Inc." and "Risk Factors" and elsewhere in this prospectus
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are subject to the
safe harbor provisions of the reform act. Forward-looking statements may be
identified by the use of the terminology such as may, will, expect, anticipate,
intend, believe, estimate, should, or continue or the negatives of these terms
or other variations on these words or comparable terminology. To the extent that
this prospectus contains forward-looking statements regarding the financial
condition, operating results, business prospects or any other aspect of Webb,
you should be aware that our actual financial condition, operating results and
business performance may differ materially from that projected or estimated by
us in the forward-looking statements. We have attempted to identify, in context,
some of the factors that we currently believe may cause actual future experience
and results to differ from their current expectations. These differences may be
caused by a variety of factors, including but not limited to adverse economic
conditions, intense competition, including entry of new competitors, ability to
obtain sufficient financing to support our operations, progress in research and
development activities, variations in costs that are beyond our control, adverse
federal, state and local government regulation, unexpected costs, lower sales
and net income, or higher net losses than forecasted, price increases for
equipment, inability to raise prices, failure to obtain new customers, the
possible fluctuation and volatility of our operating results and financial
condition, inability to carry out marketing and sales plans, loss of key
executives, and other specific risks that may be alluded to in this prospectus.
USE OF PROCEEDS
The selling shareholders are offering all of the shares to be sold. We will
not receive any of the proceeds from the offer and sale of the shares.
SELLING SHAREHOLDERS
The common stock covered by this prospectus consists of shares issued or
issuable upon conversion of our series B-2 convertible preferred stock. The
selling shareholders acquired all of their preferred stock in exchange for all
of their series B convertible preferred stock. The selling shareholders had
acquired all of their series B convertible preferred stock and warrants for
343,750 shares in exchange for a cash investment of $12,500,000 given to us on
February 18, 2000.
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The number of shares that actually may be sold by each selling shareholder
will be determined by such selling shareholder. Because the selling
shareholders may sell all, some or none of the shares of common stock which they
hold, and because the offering contemplated by this prospectus is not currently
being underwritten, no estimate can be given as to the number of shares of
common stock that will be held by the selling shareholders upon termination of
the offering.
The following table sets forth information as of September 28, 2000,
regarding the selling shareholders, including:
. The name of the selling shareholders;
. The beneficial ownership of common stock of the selling shareholders;
and
. The maximum number of shares of common stock offered by the selling
shareholders.
The information presented is based on data furnished to us by the selling
shareholders.
Under the registration rights agreement, we are required to register for
resale by the selling shareholders 1,361,112 shares of our common stock. This
amount is based upon the number of shares issuable upon conversion of the
preferred stock.
Pursuant to their terms, the preferred stock and warrants are convertible
or exercisable by any holder only to the extent that the number of shares
thereby issuable, together with the number of shares of common stock owned by
such holder, but not including unconverted or unexercisable shares of preferred
stock or warrants, would not exceed 4.99% of the then outstanding shares of our
common stock as determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, unless such conversion is approved by the majority of the
holders of our common stock. Accordingly, the number of shares of common stock
set forth in the third and fourth columns in the table below for the selling
shareholders exceeds the number of shares of common stock that the selling
shareholders beneficially own in accordance with Section 13(d) as of September
28, 2000. This 4.99% limit may not prevent any holder from converting all of its
preferred stock or exercising its warrants, because the holder can convert
preferred stock or exercise warrants into 4.99% of our outstanding common stock,
then sell all of that stock to permit it to engage in further conversions or
exercises. As a result, the 4.99% limit does not prevent selling shareholders
from selling more than 4.99% of our common stock.
<TABLE>
<CAPTION>
Shares of Common Stock
Owned Before Offering Plus
Shares Of Common Maximum Number of Shares Maximum Number of Shares of Common
Stock Owned Which Can Be Acquired Shares Offered Under Stock Owned
Selling Beneficially Before Over the Life of This Registration Beneficially After
Shareholder Offering (%) Securities Owned (%) Statement (%) Offering (%)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Castle Creek 484,260 (4.99%) 1,252,312 (11.96%)(2) 680,556 (6.87%) 484,260 (4.99%)(3)
Technology
Partners LLC (1)
Marshall Capital 484,260 (4.99%) 852,431 (8.46%) 680,556 (6.87%) 171,875 (1.83%)(5)
Management, Inc. (4)
</TABLE>
(1) Castle Creek Technology Partners LLC, 77 West Wacker Drive, Suite 4040,
Chicago, Illinois 60601. Castle Creek Technology Partners LLC beneficially owns
484,260 shares, determined in accordance with Rule 13d-3, and disclaims
beneficial ownership of any shares other than these shares. Castle Creek
Technology Partners LLC acquired its securities in the ordinary course of its
business and at the time of its purchase of these securities, it had no
understandings, directly or indirectly with any person to distribute the
securities. As investment manager, pursuant to a management agreement with
Castle Creek Technology Partners LLC, Castle Creek Partners, LLC may be deemed
to beneficially own the securities held by Castle Creek Technology Partners LLC.
Castle Creek Partners, LLC disclaims such beneficial ownership. Daniel Asher, as
a managing member of Castle Creek Partners, LLC, holds the voting and
dispositive powers over the securities owned by Castle Creek Technology
9
<PAGE>
Partners LLC and may be deemed to be the beneficial owner of the securities. Mr.
Asher disclaims such beneficial ownership.
(2) Includes (a) shares issuable upon conversion of the series B-2 convertible
preferred stock and assumes a conversion price of $9.183672; (b) shares issuable
upon conversion of a 10% promissory note acquired in 1999 and assumes a
conversion rate of $10.07 per share, the current conversion rate for the note;
(c) shares issuable upon exercise of a warrant to purchase 136,519 shares
obtained in connection with issuance of the 10% convertible note; (d) shares
issuable upon exercise of a warrant to purchase 171,875 shares obtained in
connection with issuance of the series B convertible preferred stock; and (e)
shares issuable as paid-in-kind interest on the 10% convertible note. No effect
has been given to the antidilution provisions in the warrants since any events
which could cause the antidilution provisions to take effect are not now known.
(3) The number of shares of common stock beneficially owned after the offering
is subject to the 4.99% limit described above. The number of shares set forth in
the table consists of (a) shares issuable upon conversion of a 10% promissory
note acquired in 1999 and assumes a conversion rate of $10.07 per share, the
current conversion rate for the note; (b) shares issuable upon exercise of a
warrant to purchase 136,519 shares obtained in connection with issuance of the
10% convertible note; (c) shares issuable upon exercise of a warrant to purchase
171,875 shares obtained in connection with issuance of the series B convertible
preferred stock; and (d) shares issuable as paid-in-kind interest on the 10%
convertible note. No effect has been given to the antidilution provisions in the
warrants since any events which could cause the antidilution provisions to take
effect are not now known. These calculations assume that the selling shareholder
still holds the securities described above at the time of the completion of this
offering, which may or may not be the case at that time.
(4) Marshall Capital Management, Inc., 11 Madison Avenue, 7/th/ Floor, New York,
New York 10010. Marshall Capital Management, Inc beneficially owns 484,260
shares, determined in accordance with Rule 13d-3, and disclaims beneficial
ownership of any shares other than those shares. Marshall Capital Management,
Inc. acquired the securities in the ordinary course of business and at the time
of its purchase of these securities, it had no understanding, directly or
indirectly, with any person to distribute the securities. Alan Weine and
Charles Gassenheimer, as officers of Marshall Capital Management, Inc., hold the
voting and dispositive powers over the securities owned by Marshall Capital
Management, Inc. and may be deemed to be the beneficial owners of the
securities. Messrs. Weine and Gassenheimer disclaim such beneficial ownership.
(5) The shares of common stock beneficially owned after the offering consist of
shares issuable upon exercise of a warrant to purchase 171,875 shares obtained
in connection with issuance of the series B convertible preferred stock. No
effect has been given to the antidilution provisions in the warrants since any
events which could cause the antidilution provisions to take effect are not now
known. These calculations assume that the selling shareholder still holds the
securities described above at the time of the completion of this offering, which
may or may not be the case at that time.
PLAN OF DISTRIBUTION
The sale of the shares offered by this prospectus may be made in the Nasdaq
National Market or other over-the-counter markets at prices and at terms then
prevailing or at prices related to the then current market price or in
negotiated transactions. These shares may be sold by one or more of the
following:
. A block trade in which the broker or dealer will attempt to sell shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction.
. Purchases by a broker or dealer as principal and resale by a broker or
dealer for its account using this prospectus.
. Ordinary brokerage transactions in which the broker does not solicit
purchasers and transactions in which the broker does solicit purchasers.
. Transactions directly with a market maker.
. In privately negotiated transactions not involving a broker or dealer.
Each sale may be made either at market prices prevailing at the time of
such sale, at negotiated prices, at fixed prices which may be changed, or at
prices related to prevailing market prices.
Brokers or dealers engaged by the selling shareholders to sell the shares
may arrange for other brokers or dealers to participate. Brokers or dealers
engaged to sell the shares will receive compensation in the form of commissions
or discounts in amounts to be negotiated immediately prior to each sale. These
brokers or dealers and any other participating brokers or dealers may be deemed
to be underwriters within the meaning of the Securities Act of 1933 in
connection with these sales. We will receive no proceeds from any resales of the
shares offered by this
10
<PAGE>
prospectus, and we anticipate that the brokers or dealers, if any, participating
in the sales of the shares will receive the usual and customary selling
commissions.
In connection with their ownership or sale of the shares, the selling
shareholders may enter into hedging transactions. In connection with such
transactions, persons with whom they effect such transactions, including broker-
dealers, may engage in short sales of our common stock in connection with the
transaction with selling shareholders. The selling shareholders may also engage
in short sales and short sales against the box, and in options, swaps,
derivatives and other transactions in our securities, and may sell and deliver
the shares covered by this prospectus in connection with such transactions or in
settlement of securities loans. These transactions may be entered into with
broker-dealers or other financial institutions that may resell those shares. In
addition, from time to time, a selling shareholder may pledge its shares
pursuant to the margin provisions of its customer agreements or otherwise. Upon
delivery of the shares or a default by a selling shareholder, the broker-dealer
or financial institution may offer and sell the pledged shares from time to
time.
To comply with the securities laws of some states, if applicable, the
shares will be sold in those states only through brokers or dealers. In
addition, in some states, the shares may not be sold in those states unless they
have been registered or qualified for sale in those states or an exemption from
registration or qualification is available and is complied with.
If necessary, the specific shares of our common stock to be sold, the names
of the selling shareholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement of which this prospectus is a part. We
entered into registration agreements in connection with the private placement of
the series B-2 convertible preferred stock which required us to register the
underlying shares of our common stock under applicable federal and state
securities laws. The registration agreements provide for cross-indemnification
of the selling shareholders and us and each party's respective directors,
officers and controlling persons against liability in connection with the offer
and sale of the common stock, including liabilities under the Securities Act of
1933 and to contribute to payments the parties may be required to make in
respect thereof. We have agreed to indemnify and hold harmless the selling
shareholders from liability under the Securities Act of 1933.
The rules and regulations in Regulation M under the Securities Exchange Act
of 1934, provide that during the period that any person is engaged in the
distribution, as so defined in Regulation M of our common stock, such person
generally may not purchase shares of our common stock. The selling shareholders
are subject to applicable provisions of the Securities Act of 1933 and
Securities Exchange Act of 1934 and the rules and regulations thereunder,
including, without limitation, Regulation M, which provisions may limit the
timing of purchases and sales of shares of the common stock by the selling
shareholders. The foregoing may affect the marketability of the common stock.
We will bear all expenses of the offering of the common stock, except that
the selling shareholders will pay any applicable underwriting commissions and
expenses, brokerage fees and transfer taxes, as well as the fees and
disbursements of counsel to and experts for the selling shareholders.
DESCRIPTION OF SECURITIES
General
Our articles of incorporation authorize our board of directors to issue
65,000,000 shares of capital stock, including 60,000,000 shares of common stock
and 5,000,000 shares of preferred stock, with rights, preferences and privileges
as are determined by our board of directors.
Common Stock
As of September 30, 2000, we had 9,220,337 shares of common stock
outstanding. All outstanding shares of our common stock are fully paid and
nonassessable and the shares of our common stock offered by this prospectus will
be, upon issuance, fully paid and nonassessable. The following is a summary of
the material rights and privileges of our common stock.
11
<PAGE>
Voting. Holders of our common stock are entitled to cast one vote for each
share held at all shareholder meetings for all purposes, including the election
of directors. The holders of more than 50% of the voting power of our common
stock issued and outstanding and entitled to vote and present in person or by
proxy, together with any preferred stock issued and outstanding and entitled to
vote and present in person or by proxy, constitute a quorum at all meetings of
our shareholders. The vote of the holders of a majority of our common stock
present and entitled to vote at a meeting, together with any preferred stock
present and entitled to vote at a meeting, will decide any question brought
before the meeting, except when Colorado law, our articles of incorporation, or
our bylaws require a greater vote and except when Colorado law requires a vote
of any preferred stock issued and outstanding, voting as a separate class, to
approve a matter brought before the meeting. Holders of our common stock do not
have cumulative voting for the election of directors.
Dividends. Holders of our common stock are entitled to dividends when, as
and if declared by the board of directors out of funds available for
distribution. The payment of any dividends may be limited or prohibited by loan
agreement provisions or priority dividends for preferred stock that may be
outstanding.
Preemptive Rights. The holders of our common stock have no preemptive
rights to subscribe for any additional shares of any class of our capital stock
or for any issue of bonds, notes or other securities convertible into any class
of our capital stock.
Liquidation. If we liquidate or dissolve, the holders of each outstanding
share of our common stock will be entitled to share equally in our assets
legally available for distribution to our shareholders after payment of all
liabilities and after distributions to holders of preferred stock legally
entitled to be paid distributions prior to the payment of distributions to
holders of our common stock.
Series B-2 Convertible Preferred Stock
On February 18, 2000, we issued 12,500 shares of our series B convertible
preferred stock and warrants to acquire 343,750 shares of our common stock to
the selling shareholders for an aggregate cash investment of $12,500,000. The
conversion price for the series B convertible preferred stock, initially $20.00,
was subject to being reset on November 12, 2000, based on the market value for
our common stock. On September 14, 2000, we agreed to exchange all of the
series B convertible preferred stock for 12,500 shares of series B-2 convertible
preferred stock. The exchange resulted in the issuance of convertible preferred
stock with a fixed conversion price for the outstanding convertible preferred
stock with a variable conversion price. The series B-2 convertible preferred
stock does not bear dividends and does not entitle the holders to any voting
rights except as required by Colorado law. The following is a summary of the
material terms of the series B-2 convertible preferred stock.
Conversion. The preferred stock is convertible into common stock so long
as the conversion would not result in the holder being a beneficial owner of
more than 4.99% of our common stock unless the issuance of the preferred stock
has been approved by our shareholders. The current conversion price is
$10.20408 per share. If the effective date of the registration statement of
which this prospectus is a part is after December 31, 2000, the conversion price
may be decreased to $9.183672.
On the later of December 31, 2000, or ten days after the effective date of
the registration statement of which this prospectus is a part, subject to the
4.99% limitation described above, the shares of preferred stock will be
automatically converted into the number of shares of our common stock equal to
the stated value of the preferred shares, divided by the conversion price in
effect at the time.
The conversion price is also subject to anti-dilution protection in the
event of the issuance of our common stock at prices less than the conversion
price for the preferred stock or the then current price for our common stock and
for stock splits, stock dividends and other similar transactions. If the
conversion price is reduced, we may be required to record a charge to income.
Redemption. In the event that we do not have a sufficient number of shares
of our common stock available for the conversion of the preferred stock for any
reason, including our failure to obtain the approval of our shareholders of the
issuance of the preferred stock, fail in any material respect to comply with the
terms of the preferred stock or the purchase agreement pursuant to which the
preferred stock was sold or our common stock ceases to be quoted on the Nasdaq
Stock Market, the holders of the preferred stock have the right to require us to
12
<PAGE>
redeem their shares of preferred stock. The redemption price would be equal to
the greater of $1,250 per share of preferred stock or the market value of the
preferred stock based on the then market value for our common stock.
Liquidation Preference. If we liquidate, dissolve or wind-up our business,
whether voluntary or otherwise, after we pay our debts and other liabilities,
the holders of the preferred stock will be entitled to receive from our
remaining net assets, before any distribution to the holders of our common
stock, the amount of $1,000 per share.
Registration Rights. Pursuant to the agreements under which the preferred
stock was issued, we were required to file with the SEC a registration statement
for the resale of the shares issuable upon conversion of the preferred stock and
to use our best efforts to keep such registration statement effective until all
of the shares have been resold or can be sold immediately without compliance
with the registration requirements of the Securities Act of 1933, pursuant to
Rule 144 or otherwise.
Right of First Refusal
Pursuant to the Securities Purchase Agreement under which the selling
shareholders acquired the series B preferred stock, the selling shareholders
have the first right, until February 18, 2001, to purchase any equity securities
to be sold by us except for securities being sold pursuant to our benefit plans,
any firm-commitment underwritten public offering or the issuance of our equity
securities in connection with a strategic investment or a merger or acquisition
with an unaffiliated third party which is not effected for the primary purpose
of raising equity capital.
Warrants Issued with Series B Convertible Preferred Stock
The selling shareholders own five-year warrants to purchase an aggregate of
343,750 shares of our common stock. The exercise price for the warrants is
currently $8.75 per share. During the first three years of the warrants, the
exercise price is subject to adjustment at the end of each ninety-day period
following the issuance of the warrants. During this period, the exercise price
at the end of each ninety-day period shall be adjusted if the market price for
our common stock is less than the then exercise price for the warrants, and
shall, in this event, be the then market price for our common stock. The
exercise price for the warrants is also subject to anti-dilution protection in
the event of the issuance of our common stock at prices less than the exercise
price for the warrants and for stock splits, stock dividends and other similar
transactions. If the warrant price is reset, we may record additional charges
to income. The warrants may be subject to early expiration after an
underwritten public offering or one year if the market price for our common
stock exceeds $40.81. The shares issuable upon exercise of the warrants are
subject to an effective registration statement filed with the SEC.
10% Convertible Note
On August 25, 1999, we issued $5,000,000 principal amount of a 10%
convertible note. The terms of the notes were amended on December 18, 1999. On
February 18, 2000, one-half of the principal amount of the note was converted
into 248,262 shares of common stock at an exercise price of $10.07 per share.
The following is a summary of the material terms of the 10% convertible note.
Conversion Price. The convertible note is convertible into shares of
common stock at a conversion price of $10.07 per share.
Redemption. We can prepay the promissory note at any time, if the closing
bid price for our common stock for 20 consecutive trading days is at least 200%
of the conversion price then in effect. The redemption price would equal 115%
of the face amount of the convertible note, plus accrued and unpaid interest.
Interest. The convertible note bears interest at the rate of 10% per
annum. If the market value of our common stock is above $10.07, the issuance of
notes to pay interest would result in an effective interest rate of more than
10%.
Registration Rights. Pursuant to the securities purchase agreement under
which the convertible note and warrants were issued, we filed with the SEC a
registration statement which was declared effective on February 15, 2000, for
the resale of the shares issuable upon conversion of the note and the exercise
of the warrants issued in connection with the note and are required to use our
best efforts to keep such registration statement effective until all
13
<PAGE>
of the shares have been resold or can be sold immediately without compliance
with the registration requirement of the Securities Act of 1933, pursuant to
Rule 144 or otherwise.
Warrant Issued with Convertible Note
The holder of the convertible note owns a five-year warrant to purchase
136,519 shares. The exercise price for the warrant is subject to adjustment
effective September 30, 2000. Based on the market prices for our common stock
through September 27, 2000, we estimate that the exercise price for the warrant
will be, effective September 30, 2000, approximately $10.00 to $10.50 per share.
The warrant is subject to anti-dilution protection in the event of the issuance
of our common stock at prices less than the exercise prices for the warrant or
the then current price for our common stock and for stock splits, stock
dividends and other similar transactions.
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 with the
SEC at the SEC's Public Reference Room located at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. You can also obtain
copies of this material from the SEC's Internet site located 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 a part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, file no. 0-28462:
. Our annual report on Form 10-KSB for the year ended December 31, 1999.
. Our quarterly report on Form 10-QSB for the quarter ended March 31,
2000.
. Our quarterly report on Form 10-QSB for the quarter ended June 30,
2000.
. Our preliminary proxy statement of the 2000 annual meeting of
shareholders filed on March 17, 2000.
. Our definitive proxy statement of the 2000 annual meeting of
shareholders filed on April 4, 2000.
. The description of our common stock contained in our registration
statement on Form 8-A filed with the SEC on May 22, 1996.
. Our current report on Form 8-K filed January 5, 2000.
. Our current report on Form 8-K filed January 14, 2000.
. Our current report on Form 8-K filed February 25, 2000.
. Our current report on Form 8-K/A filed March 22, 2000.
. Our current report on Form 8-K/A filed March 28, 2000.
. Our current report on Form 8-K filed September 19, 2000.
. Our current report on Form 8-K filed September 27, 2000.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and telephone number:
Shareholder Services
Attn: Kim Boswood
Webb Interactive Services, Inc.
1899 Wynkoop
Suite 600
Denver, Colorado 80202
(303) 308-3227
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different
14
<PAGE>
information. The selling shareholders will not make an offer of these shares in
any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front page of this prospectus.
LEGAL MATTERS
Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota, has
issued an opinion about the legality of the shares registered by this
prospectus.
EXPERTS
The financial statements incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
INDEMNIFICATION
Our articles of incorporation provide that we shall indemnify, to the full
extent permitted by Colorado law, any of our directors, officers, employees or
agents who are made, or threatened to be made, a party to a proceeding by reason
of the fact that he or she is or was one of our directors, officers, employees
or agents against judgments, penalties, fines, settlements and reasonable
expenses incurred by the person in connection with the proceeding if specified
standards are met. Although indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons under these provisions, we have been advised that, in the
opinion of the SEC, indemnification for liabilities arising under the Securities
Act of 1933 is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
Our articles of incorporation also limit the liability of our directors to
the fullest extent permitted by the Colorado law. Specifically, our articles of
incorporation provide that our directors will not be personally liable for
monetary damages for breach of fiduciary duty as directors, except for:
. Any breach of the duty of loyalty to us or our shareholders;
. Acts or omissions not in good faith or that involved intentional
misconduct or a knowing violation of law;
. Dividends or other distributions of corporate assets that are in
contravention of specified statutory or contractual restrictions;
. Violations of specified laws; or
. Any transaction from which the director derives an improper personal
benefit.
15
<PAGE>
<TABLE>
================================================== =====================================================
<S> <C>
No dealer, salesperson or any other person has
been authorized to give any information or to
make any representations other than those
contained in this prospectus in connection with
the offer made by this prospectus and, if given
or made, the information or representations must
not be relied upon as having been authorized by
us. This prospectus does not constitute an
offer to sell or the solicitation of any offer
to buy any security other than the securities
offered by this prospectus, nor does it
constitute an offer to sell or a solicitation of
any offer to buy the securities offered by this
prospectus by anyone in any jurisdiction in
which the offer or solicitation is not
authorized, or in which the person making the
offer or solicitation is not qualified to do so, WEBB INTERACTIVE
or to any person to whom it is unlawful to make SERVICES, INC.
an offer or solicitation. Neither the delivery
of this prospectus nor any sale made under this
prospectus shall, under any circumstances,
create any implication that information
contained in this prospectus is correct as of
any time subsequent to the date of this
prospectus.
_______________
TABLE OF CONTENTS
Page
----
Webb Interactive Services, Inc........... 2
Risk Factors............................. 2
Special Note Regarding Forward-Looking...
Statements............................. 8 _______________
Use of Proceeds ......................... 8
Selling Shareholders..................... 8
Plan of Distribution..................... 10 PROSPECTUS
Description of Securities................ 11
Where You Can Find More Information...... 13 _______________
Legal Matters............................ 14
Experts.................................. 14
Indemnification.......................... 14
_________ __, 2000
================================================== =====================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED TO BE IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth our various expenses in connection with
the sale and distribution of the Shares being registered pursuant to this Form
S-3 registration statement. All of the amounts shown are estimates, except for
the Securities and Exchange Commission registration fee and the Nasdaq listing
fee. We will pay all of such expenses.
Securities and Exchange Commission fee $ 3,166.63
Accounting fees and expenses 2,000.00
Legal fees and expenses 7,000.00
Printing, Mailing 1,000.00
Transfer Agent fees 200.00
Miscellaneous 633.37
----------
TOTAL $14,000.00
Item 15. Indemnification of Directors and Officers
Our articles of incorporation provide that we shall indemnify, to the
full extent permitted by Colorado law, any of our directors, officers, employees
or agents made or threatened to be made a party to a proceeding, by reason of
the fact that such person is or was a director, officer, employee or agent of
Webb against judgments, penalties, fines, settlements and reasonable expenses
incurred by the person in connection with the proceeding if the person conducted
himself or herself in good faith and in a manner he or she reasonably believed
to be in or not opposed to our best interests, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to our directors, officers
and controlling persons pursuant to the foregoing provisions, or otherwise, we
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.
Our articles of incorporation limit the liability of our directors to
the fullest extent permitted by Colorado law. Specifically, the articles of
incorporation provide that our directors will not be personally liable for
monetary damages for breach of fiduciary duty as directors, except for:
. any breach of the duty of loyalty to us or our shareholders;
. acts or omissions not in good faith or that involved intentional
misconduct or a knowing violation of law;
. dividends or other distributions of corporate assets that are in
contravention of statutory or contractual restrictions; or
. any transaction from which the director derives an improper
personal benefit.
Liability under federal securities law is not limited by the Articles.
Item 16. Exhibits
3.1 Articles of Incorporation, as amended, of Webb Interactive
Services, Inc. (1)
3.2 Bylaws of Webb Interactive Services, Inc. (2)
4.1 Specimen form of Webb Interactive Services, Inc. common stock
certificate (3)
5.1 Opinion of Counsel *
10.1 Securities Purchase Agreement dated August 25, 1999 between Webb
and the Castle Creek Technology Partners LLC, including the Form
of Warrant and Registration Rights Agreement (4)
<PAGE>
10.2 Promissory note dated August 25, 1999 issued by Webb to the
Castle Creek Technology Partners LLC (4)
10.3 Amendment dated December 18, 1999 to Securities Purchase
Agreement dated August 25, 1999 between Webb and the Castle Creek
Technology Partners LLC (5)
10.4 First Amendment dated December 18, 1999 to Promissory Note dated
August 25, 1999 issued by Webb to Castle Creek Technology
Partners LLC (5)
10.5 Stock Purchase Warrant dated August 25, 1999, as amended,
December 18, 1999, issued by Webb to Castle Creek Technology
Partners LLC (5)
10.6 Stock Purchase Warrant dated December 18, 1999, issued by Webb to
Castle Creek Technology Partners LLC (5)
10.7 Securities Purchase Agreement dated as of December 31, 1999,
between Webb, Marshall Capital Management, Inc. and Castle Creek
Technology Partners LLC. Included as exhibits thereto are the
form of Warrant and the Registration Rights Agreement (6)
10.9 Press Release dated September 18, 2000 regarding exchange of
Preferred Stock (7)
10.9 Letter Agreement dated as of September 14, 2000 between Webb and
Castle Creek. (7)
10.10 Articles of Amendment setting forth the terms of the series B-2
convertible preferred stock (8)
10.11 Exchange Agreement dated as of September 14, 2000, between Webb
and Castle Creek (8)
10.12 Registration Agreement between Webb and Castle Creek (8)
10.13 Letter Agreement dated as of September 14, 2000 between Webb and
Marshall (7)
10.14 Exchange Agreement dated as of September 14, 2000, between Webb
and Marshall (8)
10.15 Registration Agreement dated as of September 14, 2000, between
Webb and Castle Creek (8)
23.1 Consent of Arthur Andersen LLP*
-----------------------------
* Filed herewith
(1) Filed with the Registration Statement on Form S-3, filed January 29,
1999, Commission File No. 333-71503.
(2) Filed with the initial Registration Statement on Form SB-2, filed
April 5, 1996, Commission File No. 333-3282-D.
(3) Filed with the Registration Statement on Form S-3, filed September 24,
1999, Commission File No. 333-86465.
(4) Filed with the current report on Form 8-K, filed September 2, 1999,
Commission File No. 000-28462.
(5) Filed with Amendment 2 to the Registration Statement on Form S-3,
filed January 3, 2000, Commission File No. 333-87887.
(6) Filed with the current report on Form 8-K, filed January 5, 2000,
Commission File No. 000-28462.
(7) Filed with the current report on Form 8-K, filed September 19, 2000,
Commission File No. 000-28462.
(8) Filed with the current report on Form 8-K/A, filed September 27, 2000,
Commission File No. 000-28462.
Item 17. Undertakings
A. 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 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) if, in the
aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
<PAGE>
(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;
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed 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 that remain unsold at
the termination of the offering.
B. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant as discussed above, 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Denver, State of Colorado, on September 28, 2000.
WEBB INTERACTIVE SERVICES, INC.
By /s/ Perry Evans
-------------------------------------------
Perry Evans, Chief Executive Officer
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Perry Evans, William R. Cullen and Lindley
S. Branson, and each of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him/her and in
his/her name, place, and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full powers and authority
to do and perform each and every act and things requisite or necessary to be
done in and about the premises, as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their or his/her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on the 28th day of September, 2000,
by the following persons in the capacities indicated:
/s/ Perry Evans
--------------------------------
Perry Evans
(President, Chief Executive Officer and a Director)
/s/ William R. Cullen
--------------------------------
William R. Cullen
(Chief Financial Officer and a Director)
/s/ Stuart J. Lucko
--------------------------------
Stuart J. Lucko
(Chief Accounting Officer)
/s/ Lindley S. Branson
--------------------------------
Lindley S. Branson
(Director)
/s/ Robert J. Lewis
--------------------------------
Robert J. Lewis
(Director)
/s/ Richard C. Jennewine
--------------------------------
Richard C. Jennewine
(Director)
--------------------------------
Timothy O'Reilly
(Director)
<PAGE>
Webb Interactive Services, Inc.
Form S-3
Index to Exhibits
3.1 Articles of Incorporation, as amended, of Webb Interactive Services,
Inc. (1)
3.2 Bylaws of Webb Interactive Services, Inc. (2)
4.1 Specimen form of Webb Interactive Services, Inc. common stock
certificate (3)
5.1 Opinion of Counsel *
10.1 Securities Purchase Agreement dated August 25, 1999 between Webb and
the Castle Creek Technology Partners LLC, including the Form of
Warrant and Registration Rights Agreement (4)
10.2 Promissory note dated August 25, 1999 issued by Webb to the Castle
Creek Technology Partners LLC (4)
10.3 Amendment dated December 18, 1999 to Securities Purchase Agreement
dated August 25, 1999 between Webb and the Castle Creek Technology
Partners LLC (5)
10.4 First Amendment dated December 18, 1999 to Promissory Note dated
August 25, 1999 issued by Webb to Castle Creek Technology Partners
LLC (5)
10.5 Stock Purchase Warrant dated August 25, 1999, as amended, December
18, 1999, issued by Webb to Castle Creek Technology Partners LLC (5)
10.6 Stock Purchase Warrant dated December 18, 1999, issued by Webb to
Castle Creek Technology Partners LLC (5)
10.7 Securities Purchase Agreement dated as of December 31, 1999, between
Marshall Capital Management, Inc. and Castle Creek Technology
Partners LLC. Included as exhibits thereto are the form of Warrant
and the Registration Rights Agreement (6)
10.9 Press Release dated September 18, 2000 regarding exchange of
Preferred Stock (7)
10.9 Letter Agreement dated as of September 14, 2000 between Webb and
Castle Creek. (7)
10.10 Articles of Amendment setting forth the terms of the series B-2
convertible preferred stock (8)
10.11 Exchange Agreement dated as of September 14, 2000, between Webb and
Castle Creek (8)
10.12 Registration Agreement between Webb and Castle Creek (8)
10.13 Letter Agreement dated as of September 14, 2000 between Webb and
Marshall (7)
10.14 Exchange Agreement dated as of September 14, 2000, between Webb and
Marshall (8)
10.15 Registration Agreement dated as of September 14, 2000, between Webb
and Castle Creek (8)
23.1 Consent of Arthur Andersen LLP*
________________________
* Filed herewith
(1) Filed with the Registration Statement on Form S-3, filed January 29, 1999,
Commission File No. 333-71503.
(2) Filed with the initial Registration Statement on Form SB-2, filed April 5,
1996, Commission File No. 333-3282-D.
(3) Filed with the Registration Statement on Form S-3, filed September 24,
1999, Commission File No. 333-86465.
(4) Filed with the current report on Form 8-K, filed September 2, 1999,
Commission File No. 000-28462.
(5) Filed with Amendment 2 to the Registration Statement on Form S-3, filed
January 3, 2000, Commission File No. 333-87887.
(6) Filed with the current report on Form 8-K, filed January 5, 2000,
Commission File No. 000-28462.
(7) Filed with the current report on Form 8-K, filed September 19, 2000,
Commission File No. 000-28462.
(8) Filed with the current report on Form 8-K/A, filed September 27, 2000,
Commission File No. 000-28462.
