<PAGE> 1
As filed with the Securities and Exchange Commission on January 21, 2000
Registration No. 333-94437
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
PRE-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INFORMATION ARCHITECTS CORPORATION
(Exact name of Registrant as specified in its charter)
NORTH CAROLINA 7372 87-0399301
- ------------------------------ --------------------------- ---------------
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation organization) Classification Code Number) Identification
Number)
4064 Colony Road
Charlotte, North Carolina 28211
(704) 365-2324
(Address, including zip code and telephone number,
including area code, of Registrant's
principal executive offices)
----------------------
J. Dain Dulaney
INFORMATION ARCHITECTS CORPORATION
4064 Colony Road
Charlotte, North Carolina 28211
(704) 365-2324
(Name, address, including zip code and telephone number, including area code,
of agent for service)
----------------------
COPY TO:
Jeffrey S. Hay
McGUIRE, WOODS, BATTLE & BOOTHE LLP
100 North Tryon Street
Suite 2900
Charlotte, North Carolina 28202
----------------------
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. [ ]
<PAGE> 2
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Proposed Maximum Amount of
Securities to be Registered Registered Share(2) Aggregate Offering Price(2) Registration Fee
<S> <C> <C> <C> <C>
Common Stock of Information 423,160 (1) $12.78125 $5,408,513.75 $1,286.10 (2)
Architects Corporation (par
value $.001 per share)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The total number of shares of common stock to be registered consists of
a total of 423,160 of shares; 135,317 shares of which were registered
under our original Registration Statement filed on January 11, 2000 and
an additional 287,843 shares added in this Amendment. The total number
of shares consists of 135,317 shares issued upon exercise of warrants
to purchase that number of shares issued in July and December of 1999
and 287,843 shares issuable upon exercise of warrants issued in
July of 1999.
(2) Calculated based upon the average of the high and low sales price of
the common stock of Information Architects Corporation on January 14,
2000, as reported by the Nasdaq National Market, pursuant to Rule
457(c)of the Securities Act of 1933, as amended. Information Architects
Corporation previously paid $314.85 with the original filing on January
11, 2000, covering the registration of 135,317 shares, which fee was
calculated based upon the average of the high and low sales price of
the common stock of Information Architects Corporation on January 4,
2000, as reported by the Nasdaq National Market, pursuant to Rule
457(c) of the Securities Act of 1933, as amended. Information
Architects Corporation is paying $971.25 in connection with the filing
of this Amendment.
THIS PRE-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON THE DATE 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.
<PAGE> 3
SUBJECT TO COMPLETION, DATED JANUARY 21, 2000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
423,160 Shares
Information Architects Corporation
--------------------
Common Stock
($0.001 par value)
-------------------------------------------
This prospectus relates to the public offering of shares of our common
stock by the selling stockholders. One of the selling stockholders was issued
135,317 shares of common stock upon the exercise of our warrants owned by the
selling stockholder. The other selling stockholder may be issued up to 287,843
shares of our common stock upon exercise of our warrants owned by the selling
stockholder. We will not receive any of the proceeds from the sale of the
shares. We will pay all expenses of registration incurred in connection with
this offering, but the selling stockholders will pay all of their selling
commissions, brokerage fees and related expenses.
The selling stockholders have advised us that they will sell the shares
from time to time in the open market, on the Nasdaq Stock Market, in privately
negotiated transactions or a combination of these methods, at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices, at negotiated prices, or otherwise as described under "Plan of
Distribution."
Our common stock is traded on the Nasdaq National Market (Nasdaq
Symbol: IARC). On January 14, 2000, the closing price of the common stock was
$14.50 per share.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 1.
-------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
-------------------------------------------
The date of this prospectus is January , 2000.
<PAGE> 4
RISK FACTORS
In evaluating our business, prospective investors should carefully
consider the following risks in addition to the other information in this
prospectus or in the documents referred to in this prospectus. Any of the
following risks could have a material adverse impact on our business, operating
results and financial condition and result in a complete loss of your
investment.
The statements made in this prospectus, including the information
incorporated by reference, that are not historical facts, contain
"forward-looking information" within the meaning of the Private Securities
Litigation Reform Act of 1995, and Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, both as amended, which can
be identified by the use of forward-looking terminology such as "may", "will",
"anticipates", "expects", "projects", "estimates", "believes" or "continue", the
negative thereof, other variations or comparable terminology. Important factors,
including certain risks and uncertainties with respect to such forward-looking
statements that could cause actual results to differ materially from those
reflected in such forward looking statements include, but are not limited to,
the risk factors discussed below.
IF NEW STRATEGIES TO REPLACE REVENUE FROM OUR YEAR 2000 BUSINESS ARE
UNSUCCESSFUL, OUR REVENUES WILL DECLINE.
If we are unable to develop sources of revenues or funding other than
our Year 2000 Business, we will be required to reduce our expenses commensurate
with the lower revenues and seek other acquisitions, business combinations or
financing to replace the revenues generated by our Year 2000 business. In 1999
we derived more than ninety percent (90%) of our revenues from our Year 2000
business. We anticipate that our revenues from the Year 2000 business will begin
to decline by 75 percent or more in the first quarter of 2000. In order for us
to sustain growth and viability, we have acquired the Metaphoria software and
will depend on related new products and markets to produce most of our future
revenue. The successful marketing and implementation of the content aggregation
and syndication products and services related to Metaphoria is dependent on a
number of factors, including the continued growth in the market for content
aggregation and syndication solutions, the market's acceptance of our solutions,
management's ability to adopt the organization to compete in the internet
marketplace, obtaining sufficient capital either from internally generated
revenues or external sources to properly fund the continued development of
Metaphoria and successfully competing with other more established vendors in the
content aggregation and syndication marketplace.
WE MAY NEED TO RAISE CAPITAL THAT COULD REDUCE EXISTING STOCKHOLDERS' PERCENTAGE
OWNERSHIP INTEREST AND LIMIT OUR OPERATING FLEXIBILITY.
If financing is not available on acceptable terms, we may be required
to delay, scale back or eliminate our product development activities, sales and
marketing efforts or scale back our operational levels. On November 30, 1999 we
sold 4,033,921 shares of our common stock in a private placement to raise
$7,382,097 of capital. We also must continue to improve the efficiency of our
operations to achieve and maintain positive cash flow from operations. We may
need additional capital if we have not achieved profitability before exhausting
this source of capital.
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THE COMPANY'S DEBENTURE FINANCING MAY CAUSE OTHER SIGNIFICANT CORPORATE ACTIONS
BY THE COMPANY.
We have issued 19.99% of our outstanding common stock (3,876,567 shares
based on 19,393,809 shares outstanding on July 30, 1999) to an investor upon
conversion of its outstanding debentures. Since there is outstanding principal
and interest remaining to be converted under the debenture, we will be required
to issue more than 19.99% of our common stock. In order to issue more than
19.99% of our outstanding shares of common stock, we may be required to seek
stockholder approval. If we are unable to obtain stockholder approval for
issuance of the shares of our common stock, in addition to the 19.99% shares of
our common stock already issued to that investor, we will be required to remove
ourselves from the NASDAQ stock market and to issue the number of shares
required upon conversion of the outstanding principal and interest of the
debenture.
OUR LIMITED OPERATING HISTORY MAY IMPEDE YOUR ABILITY TO EVALUATE OUR BUSINESS
AND ITS FUTURE PROSPECTS.
Our operating history in the content aggregation and syndication
business is limited so it will be difficult for you to evaluate it in making an
investment decision. We only began receiving revenues from operations on this
business direction in the second quarter of 1999. As of September 30, 1999 we
have only received approximately $90,000 of revenue from the content aggregation
and syndication business. We are still in the early stages of our development,
which makes the evaluation of our business operations and our prospects
difficult. Before buying our common stock, you should consider the risks and
difficulties frequently encountered by companies in new and rapidly evolving
markets, particularly those companies whose businesses depend on the Internet.
These risks and difficulties, as they apply to us in particular, include:
. potential fluctuations in operating results and uncertain
growth rates;
. limited market acceptance of our products;
. concentration of our revenues in a single product;
. our dependence on a small number of orders for most of our
revenue;
. our need to manage rapidly expanding operations; and
. our need to attract and train qualified personnel.
VOLATILITY IN OUR STOCK PRICE MAY ADVERSELY AFFECT OUR BUSINESS.
Fluctuations in the market price of our stock may adversely affect our
ability to complete any acquisitions, our access to capital and financing and
our ability to attract and retain qualified personnel. The price of our common
stock may decline in future quarters if our revenues or operating results are
below expectations. Our quarterly operating results have fluctuated
significantly in the past, and we expect them to continue to fluctuate in the
future. It is possible that in some future periods our results of operations may
not meet or exceed the expectations of public market analysts and investors.
Historically, our common stock price and trading volume have
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fluctuated widely, with a 52-week range as of January 19, 2000 of $16.25 to
$.68. We expect fluctuations to continue in the future for a number of reasons,
including the following:
- our success or failure in meeting market expectations of our
quarterly or annual revenues, net income or earnings per share;
- announcements by us or our competitors regarding new services and
products or technological innovations;
- stock prices for many technology companies fluctuate widely for
reasons, including perceived potential value, that may be unrelated to
operating results; and
- announcements of unusual events, such as acquisitions.
FAILURE TO RESPOND TO RAPID TECHNOLOGICAL CHANGE COULD ADVERSELY AFFECT OUR
ABILITY TO GENERATE REVENUE.
Our future success will depend on our ability to improve existing
services and products, offer new services, enhance recently acquired products
and develop, acquire and market new products and services. Our failure to
adequately and timely respond to changing technology could result in us not
remaining competitive in the marketplace. We expect that the technology
underlying the content aggregation and syndication market and internet related
services will continue to undergo rapid change as new products are introduced
and different standards are developed. In addition, our content and syndication
software is in a development stage and will require continued expenditures of
resources to complete the development effort. Our software will involve a new
approach to the conduct of online business and, as a result, intensive marketing
and sales efforts may be necessary to educate prospective customers regarding
the uses and benefits of our products. There is competition on two distinct
levels: (i) from in-house development efforts by potential customers, and (ii)
third party competitors. Many of our current and potential competitors have
longer operating histories, established name recognition, longer relationships
with clients and significantly greater financial, technical, marketing and
public relations resources.
OUR FINANCING WILL REDUCE THE PERCENTAGE OWNERSHIP INTEREST OF EXISTING
STOCKHOLDERS AND MAY CAUSE A REDUCTION IN THE SHARE PRICE.
In July 1999, we raised $5 million by issuing debentures, which are
convertible into shares of our common stock. The debenture holder has converted
the debentures into 3,876,567 shares of common stock, and we will be required to
issue approximately 700,000 additional shares of common stock to an investor and
up to 287,843 shares of common stock underlying the warrants. In addition, on
November 30, 1999 we sold 4,033,921 shares of our common stock in a private
placement to raise $7,382,097 of capital. If an investor or the private
placement stockholders sell the common stock, this could result in an imbalance
of supply and demand for our common stock and a decrease in the market price of
our common stock.
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WE FACE POTENTIAL LIABILITY AS A RESULT OF PENDING SHAREHOLDER SUITS.
Between May 14, 1999 and July 13, 1999, we and current and former
officers and directors were named as defendants in four purported class action
lawsuits. The suits are filed in the United States District Court for the
Western District of North Carolina. The legal costs incurred by us in defending
ourselves and our officers and directors against this litigation, whether or not
we prevail, could materially impact the operating results in the quarters in
which those expenses are incurred. Further, in the event that the plaintiffs
prevail, we also could be required to pay damages that would materially impact
the operating results in the quarter and year in which the damages are incurred
and could materially impact our financial condition. This litigation may be
protracted and may result in a diversion of our management's attention and other
resources. The suits purport to be brought on behalf of a class of persons that
purchased our common stock between November 14, 1997 and April 1, 1999 and
allege violations of the federal securities laws. The suits have been
consolidated and a lead plaintiffs' group and lead plaintiffs' counsel have been
appointed by the court. On September 17, 1999, a consolidated and amended class
action complaint was filed. On November 24, 1999, we filed a motion to dismiss.
The suits allege that the defendants made material omissions and
misrepresentations in public filings, press releases and other public statements
during the purported class period. The suits seek class action status and an
unspecified amount of damages, including compensatory damages, interest,
attorney's and expert's fees and reasonable costs and expenses.
IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR
BUSINESS COULD SUFFER.
Our success is dependent upon our ability to use our proprietary
technology to create revenue-producing opportunities. If we are not able to
adequately protect our proprietary technology, we will be required to seek
revenue from sources other than our current proprietary technology. We currently
protect our proprietary rights through a combination of patent, copyright,
trademark and trade secret law, confidentiality agreements and contractual
provisions. Provisions of our client agreements, including provisions protecting
against unauthorized use, copying, transfer and disclosure, may be unenforceable
against unauthorized use, copying, transfer and disclosure, under the laws of
some jurisdictions. We are also required to negotiate limits on these provisions
from time to time. We may not be able to adequately deter misappropriation of
proprietary information or to detect unauthorized use and take appropriate steps
to enforce our intellectual property rights.
IF OUR INTELLECTUAL PROPERTY RIGHTS ARE CHALLENGED, WE MAY FACE POTENTIAL
LIABILITY.
In recent years, litigation involving patents and other intellectual
property rights has increased. Patents exist which cover solutions to the Year
2000 problem and content aggregation and syndication software and services. We
believe that we are either not using these patented solutions, software and
services or have utilized them prior to the patent filing date. Regardless, we
may be a party to litigation in the future to protect our intellectual property
or for allegedly infringing other intellectual property rights. Such litigation
may force us to do one or more of the following:
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* cease selling or using products or services that incorporate the
challenged intellectual property;
* obtain from the holder of the infringed intellectual property a
license to sell or use the relevant technology, which license may not
be available on reasonable pricing or business terms;
* redesign our affected products or services at additional cost to us.
WE MAY SUFFER LOSSES ARISING OUT OF POTENTIAL LIABILITY TO CUSTOMERS FROM OUR
YEAR 2000 BUSINESS.
There is increasing litigation arising out of failures or potential
failures in computer systems as a result of the Year 2000 problem. In the event
we become a party to any such litigation, the cost of defending the litigation
or an adverse outcome could result in payment of extraordinary expenses that
will affect our operational results. To date, we are not a party to any
litigation arising out of a Year 2000 failure. We have attempted to limit our
liability for Year 2000 claims through provisions in our contracts with
customers, limiting our damages, generally providing no warranties on our
services through the Year 2000, and disclaiming all other warranties. These
contractual protections may not be enforceable in all instances, and may not
otherwise protect us from the costs involved in defending a Year 2000 claim.
WE DO NOT PLAN TO PAY CASH DIVIDENDS ON OUR STOCK.
Since our inception, we have not paid, and do not intend to pay, any
cash dividends on our common stock in the foreseeable future. As a result, an
investor in the common stock would only receive a return on the investment if
the market price of the common stock increases.
MR. GRUDER EXERCISES SIGNIFICANT CONTROL OVER US.
Mr. Gruder, our Chief Executive Officer and Chairman of the Board, is
presently the beneficial owner of approximately 25% of our outstanding common
stock. Although Mr. Gruder's percentage ownership of our outstanding common
stock may be reduced as a result of any additional financing or the conversion
or exercise of any outstanding convertible securities, Mr. Gruder will continue
to be in a position to influence the election of directors and generally to
direct our affairs, including significant corporate actions such as
acquisitions, the sale or purchase of assets and the issuance and sale of our
securities.
OUR BUSINESS PROSPECTS MAY BE ADVERSELY AFFECTED IF WE ARE NOT ABLE TO ATTRACT
AND RETAIN QUALIFIED PROFESSIONALS.
If we are not successful in attracting, assimilating, or retaining
qualified technological personnel in the future, then we may not remain
competitive. We believe that there is a shortage of, and significant competition
for, professionals with the advanced technological skills necessary to perform
the services offered by our new internet services. Our ability to recruit and
retain such personnel will be a critical part of our success.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements or other information that we file at the Securities
and Exchange Commission's public reference room at 450 Fifth Street N.W.,
Washington, D.C. 20549 or at its regional public reference rooms in New York,
New York and Chicago, Illinois. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the operations and
locations of the public reference rooms. Our Securities and Exchange Commission
filings are also available to the public from commercial document retrieval
services and at the Internet World Wide Web site maintained by the Securities
and Exchange Commission at "http://www.sec.gov."
This prospectus is a part of a registration statement we filed with the
Securities and Exchange Commission. As allowed by the rules of the Securities
and Exchange Commission, this prospectus does not contain all of the information
that can be found in the registration statement or in the exhibits to the
registration statement. You should read the registration statement and its
exhibits for a complete understanding of all of the information included in the
registration statement.
The Securities and Exchange Commission allows us to "incorporate by
reference" information into this prospectus, which means that we can disclose
important information to you by referring you to another document filed
separately with the Securities and Exchange Commission. The information
incorporated by reference becomes part of this prospectus, and information that
we file later with the Securities and Exchange Commission will automatically
update and supercede this information. We incorporate by reference the documents
listed below that we have previously filed with the Securities and Exchange
Commission:
1. Annual Report on Form 10-K for the fiscal year ended December
31, 1998;
2. Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1999;
3. Current Report on Form 8-K filed with the Securities and
Exchange Commission on March 12, 1999;
4. Current Report on Form 8-K filed with the Securities and
Exchange Commission on April 8, 1999;
5. Quarterly report on Form 10-Q for the quarterly period ended
June 30, 1999;
6. Amendment No. 7 to our General Form for Registration of
Securities on Form 10 filed with the Securities and Exchange
Commission on July 1, 1999;
7. Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 30, 1999.
8. Quarterly report on Form 10-Q for the quarterly period ended
September 30, 1999; and
9. Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 30, 1999.
We also incorporate by reference in this prospectus additional
documents that we may file with the Securities and Exchange Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date
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of this prospectus. These include periodic reports, such as annual reports on
Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
You may obtain the documents incorporated by reference as described
above. You may also request a copy of these filings, at no cost, from us by
writing or telephoning us at:
Information Architects Corporation
4064 Colony Road
Charlotte, North Carolina 28211
(704) 365-2324
THE COMPANY
We are a provider of content aggregation and syndication software and
services for the Internet using our cutting edge Metaphoria Framework technology
to enable real-time access and updates of any digital information, from anywhere
it resides, by way of a standard Internet browser. The Metaphoria software
enables aggregation of content from source systems by accessing data in
mainframes, client server systems, internet servers, internets and extranets and
allowing such aggregated data to be viewed real time from any internet
accessible device, including a personal computer or a hand-held device by way of
wireless technology. Content syndication is the means by which an organization
customizes and distributes such information to its business partners, suppliers,
and customers. The implementation and maintenance of these content aggregation
and syndication solutions require that we provide associated internet related
services using highly trained technical personnel that are familiar with leading
edge Internet architecture and technology. Our executive offices are located at
4064 Colony Road, Charlotte, North Carolina 28211. Our telephone number at that
address is (704) 365-2324.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered by
the selling stockholders.
SELLING STOCKHOLDERS
The selling stockholders are not affiliates of us and have not had any
position, office or other material relationship with us within the past three
years, except as stockholders as noted below. All of the shares of common stock
that have been or may be acquired by the selling stockholders upon exercise of
warrants are being registered and offered pursuant to the registration statement
of which this prospectus forms a part.
Pursuant to agreements with the selling stockholder, Grayson &
Associates, Inc., ("Grayson"), we paid Grayson $250,000, issued to Grayson a
warrant to purchase 113,122 shares of our common stock at an exercise price of
$2.21 per share and issued to Grayson an additional warrant to purchase 75,000
shares of our common stock at an exercise price of $2.00 per share. On December
15, 1999, Grayson elected to exercise both warrants pursuant to a cashless
exercise provision, and we issued to Grayson a total of 135,317 shares of our
common stock.
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On July 30, 1999, we entered into an agreement with the selling
stockholder, King LLC, pursuant to which King invested $5,000,000 in our
company. In connection with that agreement, we issued the selling stockholder
warrants to purchase up to 287,843 shares of our common stock.
The following table sets forth the aggregate number of shares of common
stock held by the selling stockholders and offered by the selling stockholders
hereunder. The following table also sets forth the percentage of all shares of
common stock held by the selling stockholders after giving effect to the
offering based on 27,304,288 shares of common stock outstanding as of December
29, 1999.
<TABLE>
<CAPTION>
- ---------------------------- ------------------------- ------------------------- ------------------- -------------------
Percent of
Number of Shares Outstanding Common
Name of Selling Beneficially Owned Shares Owned After Stock Owned After
Stockholders Before Offering Number of Shares Offered the Offering (3) Offering (3)
- ---------------------------- ------------------------- ------------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Grayson & Associates, Inc. 135,317(1) 135,317
- ---------------------------- ------------------------- ------------------------- ------------------- -------------------
King LLC 287,843(2) 287,843
- ---------------------------- ------------------------- ------------------------- ------------------- -------------------
</TABLE>
------------------------
1. Includes 135,317 shares of common stock issued upon the exercise of
warrants, which were held by Grayson.
2. Includes 287,843 shares of common stock, which may be issued upon
exercise of the warrants held by King LLC.
3. Because the selling stockholders may offer all or some of the common
stock pursuant to the offering contemplated by this prospectus, no
estimate can be given as to the amount of shares of common stock that
will be held by the selling stockholders after completion of this
offering. See "Plan of Distribution."
PLAN OF DISTRIBUTION
The selling stockholders have advised us that the common stock may be
sold or distributed from time to time by the selling stockholders, directly to
one or more purchasers (including pledgees) or through brokers, dealers or
underwriters who may act solely as agents or may acquire common stock as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices, or at fixed prices,
which may be changed. The common stock may be sold by one or more of the
following distribution methods: (i) ordinary brokers' transactions, which may
include long or short sales; (ii) transactions involving cross or block trades,
or otherwise on the Nasdaq National Market; (iii) purchases by brokers, dealers
or underwriters as principal and resale by such purchasers for their own
accounts pursuant to this prospectus; (iv) "at the market" to or through market
makers or into an existing market for the common stock; (v) in other ways not
involving market makers or established trading markets, including direct sales
to purchasers or sales effected through agents; (vi) through transactions in
options, swaps or other derivatives (whether exchange-listed or otherwise);
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(vii) pursuant to Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"); or (viii) any combination of the foregoing, or by any other
legally available means. In addition, the selling stockholders may enter into
hedging transactions with broker-dealers who may engage in short sales of common
stock in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also enter into option or other
transactions with broker-dealers that require the delivery by such
broker-dealers of the common stock, which common stock may be resold thereafter
pursuant to this prospectus. In connection with any sales, the selling
stockholders and any brokers or dealers participating in such sales may be
deemed to be underwriters within the meaning of the Securities Act. We will
receive no part of the proceeds of sales made hereunder.
Any broker-dealer participating in such transactions as agent may
receive commissions from the selling stockholders and/or purchasers of the
shares offered hereby (and, if they act as agent for the purchaser of such
shares, from such purchaser). Usual and customary brokerage fees will be paid by
the selling stockholders. Broker-dealers may agree with the selling stockholders
to sell a specified number of shares at a stipulated price per share, and, to
the extent such a broker-dealer is unable to do so acting as agent for the
selling stockholders, to purchase as principal any unsold shares at the price
required to fulfill the broker-dealer commitment to the selling stockholders.
Broker-dealers who acquire shares as principal may thereafter resell such shares
from time to time in transactions (which may involve cross and block
transactions and which may involve sales to and through other broker-dealers,
including transactions of the nature described above) in the over-the-counter
market, in negotiated transactions or otherwise at market prices prevailing at
the time of sale or at negotiated prices, and in connection with such resales
may pay to or receive from the purchasers of such shares commissions computed as
described above.
We have advised the selling stockholders that Regulation M promulgated
under the Exchange Act may apply to our sales in the market, have furnished the
selling stockholders with a copy of this regulation and have informed them of
the need for delivery of copies of this prospectus. The selling stockholders may
indemnify any broker-dealer that participates in transactions involving the sale
of the shares against certain liabilities, including liabilities arising under
the Securities Act. Any commissions paid or any discounts or concessions allowed
to any such broker-dealers, and any profits received on the resale of such
shares, may be deemed to be underwriting discounts and commissions under the
Securities Act if any such broker-dealers purchase shares as principal. We have
agreed to indemnify the selling stockholders against certain liabilities,
including liabilities under the Securities Act.
Any shares of common stock which qualify for sale pursuant to Rule 144
under the Securities Act may be sold under that Rule rather than pursuant to
this prospectus.
There can be no assurance that the selling stockholders will sell any
or all of the shares of common stock offered by them hereunder.
LEGAL MATTERS
The validity of the common stock offered pursuant to this prospectus
will be passed upon for us by McGuire, Woods, Battle & Boothe LLP, Charlotte,
North Carolina.
9
<PAGE> 13
EXPERTS
The financial statements appearing in our Annual Report (Form 10-K) for
the year ended December 31, 1998, have been audited by Holtz Rubenstein & Co.,
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
We have authorized no one to give any information or to make any
representations that are not contained in this prospectus. You should rely only
on the information incorporated by reference or provided in this prospectus. You
must not rely on any unauthorized information.
This prospectus does not offer to sell or buy any shares in any
jurisdiction where it is unlawful. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front of
this document.
10
<PAGE> 14
-----------------
TABLE OF CONTENTS
-----------------
Page
----
Risk Factors.............................................................. 1
Where You Can Find More Information....................................... 6
The Company............................................................... 7
Use of Proceeds........................................................... 7
Selling Stockholders...................................................... 7
Plan of Distribution...................................................... 8
Legal Matters............................................................. 9
Experts................................................................... 10
<PAGE> 15
423,160 SHARES
[INFORMATION ARCHITECTS
CORPORATION]
COMMON STOCK
--------------
PROSPECTUS
--------------
January , 2000
<PAGE> 16
INFORMATION ARCHITECTS CORPORATION
REGISTRATION STATEMENT ON FORM S-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item
Number
- ------
Item 14 Other Expenses of Issuance and Distribution.
The following table sets forth costs and expenses of the sale and
distribution of the securities being registered. All amounts except Securities
and Exchange Commission fees are estimates.
Registration Statement--Securities and Exchange Commission.. $ 971.25
Accounting fees............................................. $1,000.00
Legal fees ................................................. $2,000.00
Miscellaneous............................................... $ 0.00
Total....................................................... $3,971.25
Item 15 Indemnification of Directors and Officers.
Reference is made to the North Carolina Business Corporation Act, G.S.
55-8-52 and 55-8-56, which provides that unless limited by our articles of
incorporation, a North Carolina corporation must indemnify a director or officer
who has been wholly successful, on the merits or otherwise, in the defense of
any actual or threatened proceeding to which he was, or was threatened to be
made, a party because he is or was a director or officer of the corporation.
This statutory right of indemnification covers all reasonable expenses incurred
by the officer or director in connection with the proceeding, including counsel
fees.
A North Carolina corporation can eliminate an individual's statutory
right to indemnification. However, the Registrant's Bylaws provide that
directors and officers shall have the right to be indemnified "to the fullest
permitted by law" and further provide that expenses incurred by an officer or
director shall be paid in advance of the final disposition of any investigation,
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Registrant.
In addition, a North Carolina corporation may, but is not required to,
indemnify a director or officer against liability who has been named or
threatened to be named a party to a proceeding because he is or was acting in
that capacity if the officer or director (i) conducted himself in good faith,
(ii) had the reasonable belief that his conduct was in the corporation's best
interests if he was acting in his official capacity, or if not acting in an
official capacity, a reasonable belief that his conduct was not opposed to the
corporation's best interests, and (iii) in the case of a criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. A North Carolina
corporation may also purchase and maintain insurance on behalf of an officer or
director against liability incurred by him in that capacity, whether or not the
<PAGE> 17
corporation would have the power to indemnify him under the statutory provisions
of North Carolina.
Item 16 Exhibits.
Exhibit
Number
- ------
5.1 Opinion of McGuire, Woods, Battle & Boothe LLP.
23.1 Consent of Holtz Rubenstein & Co., LLP, independent auditors.
23.2 Consent of McGuire, Woods, Battle & Boothe LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included in signature page).
- -------------------------------------------------------------------
Item 17 Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) to reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this 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% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
(c) to include any material information with respect to the
plan of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (a) and (b)
above shall not apply if 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 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and
<PAGE> 18
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 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 our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by them is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, when 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.
For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective. For the purpose of
determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus 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.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that they have 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 by the following persons in the capacities
and on the dates indicated in the city of Charlotte, state of North Carolina, on
January 21, 2000. Each person whose signature appears below hereby appoints
Robert F. Gruder as such person's true and lawful attorney, with full power for
him to sign, for such person and in such person's name and capacity indicated
below, any and all amendments to this registration statement, hereby ratifying
and confirming such person's signature as it may be signed by said attorney to
any and all amendments.
INFORMATION ARCHITECTS CORPORATION
By: /s/ Robert F. Gruder
----------------------------------------
Robert F. Gruder
Chief Executive Officer and Chairman
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 dates indicated.
SIGNATURE TITLE DATE
- -------------------------- -------------------------- ----------------
/s/ Robert F. Gruder Chief Executive Officer January 21, 2000
- ------------------------ and Chairman of the Board
(Robert F. Gruder) (Principal Executive Officer)
* President and Director January 21, 2000
- ------------------------
(Frank G. Milligan)
* Chief Financial Officer January 21, 2000
- ------------------------ (Principal Financial and
(J. Wayne Thomas) Accounting Officer)
* Senior Vice President and January 21, 2000
- ------------------------ Director
(Thomas J. Dudchik)
* Director January 21, 2000
- ------------------------
(Richard J. Blumberg)
*By: /s/ Robert F. Gruder
----------------------------
Robert F. Gruder
ATTORNEY-IN-FACT
<PAGE> 1
[MCGUIRE WOODS BATTLE & BOOTHE LOGO]
Bank of America Corporate Center
100 North Tryon Street, Suite 2900
Charlotte, North Carolina 28202-4011
Telephone/TDD (704) 373-8999 Fax (704) 373-8935
January 20, 2000
Board of Directors
Information Architects Corporation
4064 Colony Road
Charlotte, NC 28211
Ladies and Gentlemen:
We are acting as counsel to Information Architects Corporation, a North
Carolina corporation (the "Company"), in connection with the filing with the
Securities and Exchange Commission (the "Commission"), under the Securities Act
of 1933, as amended (the "Act"), of a Registration Statement on Form S-3 (the
"Registration Statement") relating to the offer and sale pursuant to the
Registration Statement, by the Selling Stockholder identified in the
Registration Statement, of 135,317 shares (the "Issued Shares") of Common Stock,
par value $0.001 per share, of the Company and up to 287,843 shares (the
"Warrant Shares") of Common Stock, par value $0.001 per share, of the Company
issuable upon the exercise of outstanding warrants. This opinion letter is
furnished to you for filing with the Commission pursuant to Item 601 of
Regulation S-K promulgated under the Act.
In reaching the opinion stated in this letter, we have reviewed
originals of copies of the Registration Statement, the Articles of Incorporation
and the Bylaws of the Company, both as amended to date, and such other documents
as we have considered relevant. We have assumed that (i) all information
contained in all documents reviewed by us is correct, (ii) all signatures on all
documents reviewed by us are genuine, (iii) all documents submitted to us as
originals are true and complete, (iv) all documents submitted to us as copies
are true and complete copies of the originals thereof, (v) each natural person
signing any document reviewed by us had the legal capacity to do so and (vi)
each natural person signing in a representative capacity any document reviewed
by us had authority to sign in such capacity.
Based upon the foregoing, it is our opinion that the Issued Shares are
duly and validly issued, fully paid and nonassessable, and that the Warrant
Shares, when issued in the manner described in the Registration Statement, will
be duly and validly issued, fully paid and nonassessable.
<PAGE> 2
Board of Directors
Page 2
January 20, 2000
The opinion expressed above is limited to matters governed by the laws
of the State of North Carolina. We express no opinion herein about the effect of
federal or state securities laws or the laws of any other jurisdiction.
We hereby consent to the use of this opinion letter as Exhibit 5.1 to
the Registration Statement and to the use of our name under the heading "Legal
Matters" therein. In giving this consent, we do not admit that we are in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission promulgated thereunder.
This opinion letter speaks as of the date hereof. We disclaim any duty
to advise you regarding any change subsequent to the date hereof in, or to
otherwise communicate with you with respect to, the matters addressed herein.
Very truly yours,
McGuire Woods Battle & Boothe LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference into the Registration
Statement on Form S-3 of our report dated February 23, 1999 (except for Note
15b, as to which the date is March 5, 1999) with respect to the consolidated
financial statements of Information Architects Corporation and Subsidiary
included in the Annual Report on Form 10-K for the year ended December 31, 1998.
/s/
HOLTZ RUBENSTEIN & CO., LLP
Melville, New York
January 19, 2000
