As filed with the Securities and Exchange Commission on January 6, 2000
Registration No. 333-9809
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MCY.COM, INC.
(Exact name of registrant as specified in its charter)
Delaware 87-0561634
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) IdentificationNo.)
1133 Avenue of the Americas, 28th Floor
New York, New York 10036
(Address of Principal Executive Offices) (Zip Code)
MCY.COM, INC. AMENDED AND RESTATED 1999 STOCK INCENTIVE PLAN
(Full title of the plan)
Bernhard Fritsch, President and Chief Executive Officer
MCY.com, Inc.
1133 Avenue of the Americas, 28th Floor
New York, New York 10036
(Name and address of agent for service)
(212) 944-6664
(Telephone number, including area code, of agent for service)
with a copy to:
Martin Eric Weisberg
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(212) 704-6050
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after this Registration Statement becomes effective, as determined by
market conditions.
/_/ If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
/X? If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
/_/ If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
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/_/ 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.
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/_/ If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
EXPLANATORY NOTE
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The Proscpectus filed as part of this Registration Statement has been
prepared in accordance with the requirements of Form S-3 pursuant to General
Instruction C of Form S-8 and may be used for reoffers or reslaes of MCY.com,
Inc's common stock to be acquired by the persons named therein pursuant to
MCY.com's Amended and Restated 1999 Stock Incentive Plan.
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THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SEEKING AN OFFER TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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PROSPECTUS
267,500 SHARES OF COMMON STOCK
(par value $.001 per share)
MCY.COM, INC.
The stockholders of MCY.com, Inc. listed on page 12 of this Prospectus are
offering for sale up to 267,500 shares of Common Stock of the Company under this
Prospectus. Those to whom such Selling Stockholders may pledge, donate or
transfer their shares and other successors, may also use this prospectus. The
Selling Stockholders may offer their shares through public or private
transactions, at prevailing market prices, or at privately negotiated prices.
The Selling Stockholders will receive all of the net proceeds from the
resale of the shares. Accordingly, we will not receive any proceeds from the
resale of the shares. We have agreed to bear the expenses relating to the
registration of the shares, other than brokerage commissions and expenses, if
any, which will be paid by the Selling Stockholders.
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OTC Bulletin Board Common Stock symbol: "MCYC"
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On January 5, 2000 the closing sale price of our Common Stock on the OTC
Bulletin Board was $8.25.
Our executive offices are located at 1133 Avenue of the Americas, New York,
NY 10036, our telephone number is (212) 944-6664 and our website is at
www.mcy.com.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER
THE FACTORS DESCRIBED UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 4 OF
THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS JANUARY 6, 2000
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WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
over the Internet at the SEC's Website at "http://www.sec.gov."
We have filed with the SEC a registration statement on Form S-8 to
register the Shares being offered. This Prospectus is part of that registration
statement and, as permitted by the SEC's rules, does not contain all the
information included in the registration statement. For further information with
respect to us and our Common Stock, you should refer to the registration
statement and to the exhibits and schedules filed as part of that registration
statement, as well as the documents we have incorporated by reference which are
discussed below. You can review and copy the registration statement, its
exhibits and schedules, as well as the documents we have incorporated by
reference, at the public reference facilities maintained by the SEC as described
above. The registration statement, including its exhibits and schedules, are
also available on the SEC's web site.
This Prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement.
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 or 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:
1. current Reports on Form 8-K dated (date of earliest event
reported) August 2, 1999 (as filed on August 17, 1999) and
October 13, 1999 (as filed on October 15, 1999); and,
2. Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1999;
3 The description of our Common Stock contained in our
Registration Statement on Form S-8 filed on October 27,
1999.
You may request a copy of these filings, at no cost, by writing or
telephoning us at 1133 Avenue of the Americas, New York, NY 10036, our telephone
number is (212) 944-6664, Attention: Mitchell Lampert, Esq.
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This Prospectus contains certain forward-looking statements which
involve substantial risks and uncertainties. These forward-looking statements
can generally be identified because the context of the statement includes words
such as "may," "will," "expect," "anticipate," "intend," "estimate," "continue,"
"believe," or other similar words. Similarly, statements that describe our
future plans, objectives and goals are also forward-looking statements. Our
factual results, performance or achievements could differ materially from those
expressed or implied in these forward-looking
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statements as a result of certain factors, including those listed in "Risk
Factors" and elsewhere in this Prospectus.
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED 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. THE
INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF JANUARY 6, 2000.
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TABLE OF CONTENTS
Where You Can Find More Information About Us................................2
Incorporation of Certain Documents by Reference.............................2
Risk Factors................................................................4
Use of Proceeds............................................................12
Dividend Policy............................................................12
Selling Stockholders ......................................................12
Plan of Distribution.......................................................13
Description of Securities .................................................14
Indemnification of Officers and Directors..................................15
Legal Matters..............................................................16
Experts ...................................................................16
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RISK FACTORS
AN INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK. THE RISK
FACTORS SET FORTH BELOW AND ELSEWHERE IN THIS PROSPECTUS ARE NOT INTENDED TO BE
AN EXHAUSTIVE LIST OF THE GENERAL OR SPECIFIC RISKS INVOLVED, BUT TO IDENTIFY
CERTAIN RISKS THAT ARE NOW FORESEEN BY MCY.COM. EACH PROSPECTIVE INVESTOR SHOULD
CAREFULLY CONSIDER ALL INFORMATION CONTAINED IN THIS PROSPECTUS AND SHOULD GIVE
PARTICULAR CONSIDERATION TO THE FOLLOWING RISK FACTORS BEFORE DECIDING TO
PURCHASE THE SHARES OFFERED HEREBY. ADDITIONAL RISKS AND UNCERTAINTIES THAT ARE
NOT YET IDENTIFIED OR THAT MCY.COM CURRENTLY CONSIDERS TO BE IMMATERIAL MAY ALSO
MATERIALLY ADVERSELY AFFECT MCY.COM'S BUSINESS AND FINANCIAL CONDITION IN THE
FUTURE. ANY OF THE FOLLOWING RISKS COULD MATERIALLY ADVERSELY AFFECT MCY.COM'S
BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION AND COULD RESULT IN A
COMPLETE LOSS OF ANY INVESTMENT IN MCY.COM.
LIMITED OPERATING HISTORY
We were organized in January 1999, while Health Builders, our
predecessor was organized in 1996. We have no operating history upon which an
evaluation of our prospects can be based. Our prospects must be considered in
light of the risks, expenses and difficulties frequently encountered by
companies in an early stage of development, particularly companies engaged in
new and rapidly evolving markets, such as an Internet-based digital music
delivery service. We can give no assurance that we will be able to successfully
provide an Internet-based digital music delivery business.
HISTORY OF LOSSES; LACK OF REVENUE
Our research, development, sales, marketing and general and
administrative expenses have resulted in significant losses and are expected to
continue to result in significant losses for the foreseeable future. The
entities we acquired in the reorganization incurred cumulative net losses of
approximately $5,410,000 through December 31, 1998, while we and the acquired
entities (on a historical basis) incurred consolidated net loss of $51,774,000
(including non-cash charges of approximately $40,552,000 for share compensation)
for the period from January 1 through September 30, 1999. As of September 30,
1999, we had generated only $165,000 in revenues from operations. We expect to
incur additional operating losses and to experience continued negative cash flow
from operations for the foreseeable future. We can give no assurance that we can
achieve, sustain or increase revenues or profitability in the future.
UNPROVEN BUSINESS MODEL; ABILITY TO DEVELOP PRODUCTS AND MARKET
Our business model for generating revenue streams through the
distribution of digital music downloads, online sales of CDs and music-related
merchandise and website advertising fees from third parties is unproven. Use of
the Internet by consumers as a medium for entertainment and for downloading
music is at an early stage of development and their acceptance of related
services is highly uncertain. Leading record labels are reluctant to permit the
digital distribution of their recordings through the Internet because they fear
illegal copying and are unwilling to create conflicts with their existing
distribution relationships.
As a result, our future success will depend significantly upon our
ability to successfully:
. deliver entertaining and compelling music-related content
over the Internet;
. attract a sufficient number of users to our websites to
purchase music and related merchandise and to attract
advertisers to our websites;
. develop and maintain volume usage of our digital music
distribution services
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. establish and maintain licensing and distribution
relationships with record companies, producer and artists;
and
. create and maintain a market for its digital distribution
technology.
Our business, results of operations and financial condition would be
materially adversely affected if:
. we are unable to develop Internet content that allows us to
attract, retain, and expand a loyal user base;
. Internet-based downloading of musical content is not widely
accepted by consumers;
. the technology for listening to digitally downloaded
material is not widely available or available on a timely
basis at reasonable prices;
. the technology we use to prevent illegal copying of music
content proves to be ineffective;
. we are not able to successfully compete with other entities
offering services and products similar or superior to our
services and products; or
. we are unable to anticipate, monitor, and successfully
respond to rapidly changing consumer tastes and preferences
so as to continually attract a sufficient number of users to
our websites.
DEPENDENCE ON MAJOR RECORD COMPANIES AS SUPPLIERS OF CONTENT
The rights to distribution of musical content are the single most
important "input" for music distributors. The supply market is divided among the
five major record labels including Bertelsmann Music Group, Inc., Sony Music
Entertainment, Inc., EMI and its subsidiaries, Polygram Records, Inc. & Warner
Music Group, Inc., which, in the aggregate, account for the majority of the
record industry's revenue, and the smaller independent record labels. We do not
have agreements with any of the five major record companies. If we do not
succeed in obtaining licenses for digital music distribution from one or more of
the major record labels, we will be limited in what content we can offer on our
website. Although we will seek other sources of revenue by seeking to establish
arrangements with artists directly or by developing our own artists, we can give
no assurance that we will be able to enter into arrangements with major record
labels or that we can successfully exploit other sources of revenue.
RAPID GROWTH MAY STRAIN OUR RESOURCES
If we grow rapidly in the future, such growth will place a significant
strain on our managerial, operational and financial resources. To manage any
such growth, we will be required to implement and improve our managerial
controls and procedures and operational and financial systems. In addition, we
will be required to hire, train, integrate, manage and retain our workforce
including technical support, advertising, sales and business development staff.
Locating and retaining qualified personnel in our business is extremely
competitive. We can give no assurances that we have adequately allowed for the
costs and risks associated with our proposed expansion or that our systems,
procedures or controls will be adequate to support our operations. We can also
give no assurances that we will be able to successfully locate, train and
integrate personnel into our workforce.
DEPENDENCE ON KEY MANAGEMENT PERSONNEL
We depend on key management personnel including Mr. Fritsch. Several of
our employees, including Mr. Fritsch, have entered into agreements agreeing,
among other things, not to compete with us if they leave us. If those employees,
including Mr. Fritsch breach those agreements and becomes employed by or
associated with one of our competitors, such action will likely have a
materially adverse effect on our business, results of operations and financial
condition.
NEED FOR ADDITIONAL FINANCING; FUTURE DILUTION
We may need to raise additional funds to do the following:
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. Pay cash advances to record labels and artists to gain
distribution rights for top quality content;
. Invest in aggressive marketing, advertising and promotional
campaigns to develop our brands and NETrax brands;
. Purchase new hardware and software to support our
development and the development of our technology;
. Market and distribute digital-download-related consumer
electronics and portable devices;
. Establish studio/production facilities for creation and
editing of proprietary content;
. Acquire or partner with other complementary businesses or
assets;
. Develop content acquisition and digital retail outlets in
non-U.S. markets to provide cross cultural access for
consumers;
. Fund working capital and/or other obligations.
If we raise additional funds by issuing equity or convertible debt
securities in the future, such securities may have rights, preferences or
privileges senior to those of our existing stockholders and the percentage
ownership of our stockholders will be diluted. We can give no assurance that
additional financing will be available on favorable terms or at all. If adequate
funds are not available or are not available on acceptable terms, our ability to
fund our expansion, take advantage of opportunities, develop or enhance services
or products or otherwise respond to competitive pressures would be significantly
limited.
DIFFICULTIES ASSOCIATED WITH BRAND DEVELOPMENT
The importance of brand recognition will increase in the future as the
number of websites providing digital music delivery increases. There are many
music distributors and other retailers, both online and traditional, who enjoy
customer brand recognition and may attempt to compete with us in the digital
distribution and mail order markets. Many of these distributors have superior
financial strength and resources. We believe that establishing and increasing
awareness of our brand and the technology it represents is a critical aspect of
our efforts to continue to attract customers and content providers. We will need
to invest heavily in brand development in order to establish a market presence.
We can give no assurances that our efforts to build brand awareness will be
successful or that we will have sufficient financing to pursue brand development
successfully.
THE YEAR 2000
The Year 2000 issue is the result of computer programs written using
two digits rather than four to define the applicable year. As a result,
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failures or miscalculations
causing disruptions of operations, including, among others, a temporary
inability to process transactions, send invoices, or engage in similar normal
business activities. Our systems and software (both licensed and proprietary)
are relatively new. Therefore, we do not expect Year 2000 issues related to our
internal systems to be significant and do not anticipate that we will incur
significant operating expenses or be required to invest heavily in computer
systems improvements to be Year 2000 compliant. As we make arrangements with
significant suppliers and service providers, we intend to determine the extent
to which our interface systems may be vulnerable should those third parties who
fail to address and correct their own Year 2000 issues. We anticipate that this
will be an ongoing process as we continue to implement supplier and service
provider arrangements throughout 1999. We believe that we are taking the steps
necessary regarding Year 2000 compliance with respect to matters within our
control. We can give no assurance that our systems will be made Year 2000
compliant in a timely manner or that the Year 2000 problem will not have a
material adverse effect on MCY's business, financial condition and results of
operations. We can give no assurance that the systems of suppliers or other
companies on which we rely will be converted in a timely manner and will not
have a material adverse effect on our systems. Additionally, we can give no
assurance that the third party computer systems necessary to maintain the
viability of the Internet or any of the websites that direct consumers to our
websites will be Year 2000 compliant.
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SIGNIFICANT COMPETITION
The market for online promotion and distribution of music and
music-related products is competitive. Barriers to entry on the Internet are
relatively low and competition is likely to increase significantly in the
future. We face competitive pressures from numerous actual and potential
competitors, many of which have longer operating histories, greater brand name
recognition, larger customer bases and significantly greater financial,
technical and marketing resources than we do. Such competition could result in
reduced margins, lower growth or loss of market share, any of which could have a
material adverse effect on our business, results of operations and financial
condition.
POTENTIAL LIABILITY FOR INFORMATION DISPLAYED ON OUR WEBSITES
We may be subject to claims for defamation, libel, violation of
privacy, copyright or trademark infringement or claims based on other theories
relating to the information we publish or gather on our websites. These types of
claims have been brought, sometimes successfully, against online services in the
past. We could also be subject to claims based upon the content that is
accessible from our websites through links to other websites. Our insurance may
not adequately protect us against these claims.
SECURITY RISKS
A party who is able to circumvent our security measures could
misappropriate proprietary information or cause interruptions in our Internet
operations. Consumer concern over Internet security has been, and could continue
to be, a barrier to commercial activities requiring consumers to send their
credit card information over the Internet. Computer viruses, break-ins, or other
security problems could lead to misappropriation of proprietary information and
interruptions, delays, or cessation in service to our customers. Moreover, until
more comprehensive security technologies are developed, the security and privacy
concerns of existing and potential customers may inhibit the growth of the
Internet merchandising medium. We may be required to expend significant capital
resources to protect against the threat of such security breaches or to
alleviate problems caused by such breaches. We can give no assurance that our
Internet operations are completely secure against potential interruptions or
that we can alleviate the problems should they occur.
INTELLECTUAL PROPERTY
We rely on a combination of patent law, copyright law, trademark law,
contract law, and other intellectual property protection methods to protect our
musical content, license rights, and proprietary technology and information, but
we can give no assurance that such laws will provide sufficient protection or
that the laws will not be amended or repealed. Our chief executive officer, Mr.
Fritsch has applied for the registration of trademarks used by us in the United
States and internationally, and has applied for "intent to use" trademark
registrations for a number of trademarks, including "MCY," "MCY.com" and
"NETrax," in the United States Patent and Trademark Office ("USPTO"). We can
give no assurance that the USPTO will grant the requested trademarks.
We believe that our use of material on our websites is protected under
current provisions of copyright law. However, effective trademark, copyright,
and other intellectual property protection may not be available in every country
in which our musical content and technology are distributed or made available
through the Internet. We can give no assurance that our methods of protecting
our proprietary rights in the United States or abroad will be adequate. In
addition, because patent law relating to the scope of claims in the technology
field in which we do business is still evolving, the degree of future protection
for our proprietary and licensed rights is uncertain.
Mr. Fritsch is pursuing patent protection with respect to certain
technology that is important to us, including the encryption, shopping cart and
royalty tracking technology that gives us a significant competitive advantage.
Mr. Fritsch has filed provisional patent applications for these technologies in
the United States and intends to convert some or all of these to full patent
applications within one year of the date of filing. Even if full
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patent applications are filed, we can give no assurance that any patent will be
issued. Until such time as such patents are issued, if ever, the license will be
ineffective to grant any patent rights with respect to this technology.
Moreover, Mr. Fritsch is under no obligation to pursue the prosecution of these
patent claims. See "Risk Factors - Dependence on Key Management Personnel", "-
Dependence on Licensed Technology and Music Rights".
We can give no assurance that others will not develop technologies that
are similar or superior to ours, that third parties will not copy or otherwise
obtain and use our content or technologies without authorization and that we
will be able to continue to maintain our rights to information, including
webcasting of popular sound recordings, downloadable music samples, and artist,
entertainment and other information. If we are unable to offer such information,
such failure will be likely to have a material adverse effect on our business,
results of operations, and financial condition.
There are no pending lawsuits against us regarding infringement of any
existing patents or the intellectual property rights of others. We can give no
assurance that such infringement claims will not be asserted by third parties in
the future. If any such claims are asserted and determined to be valid, we can
give no assurance that we will be able to obtain licenses of the intellectual
property rights in question on reasonable terms. If we become involved in any
patent dispute, other intellectual property dispute, or action to protect
proprietary rights, our involvement, regardless of outcome, will likely have a
material adverse effect on our business, results of operations, and financial
condition. If any litigation is determined against us, such adverse
determination may subject us to significant liabilities to third parties,
require us to seek licenses from third parties, and prevent us from
manufacturing and selling our products. In addition, we can give no assurance
that any of the provisional patent applications to which we have exclusive
rights will result in issued patents, that we will develop additional
proprietary technologies that are patentable, that any patents licensed or
issued to us or our strategic partners will provide a basis for commercially
viable products or will provide us with any competitive advantages or will not
be challenged by third parties, or that patents of others will not have an
adverse effect on our ability to do business. Furthermore, we can give no
assurance that others will not independently develop similar, alternative or
superior technologies, or design around the patented technologies developed by
us. Any of these situations may have a material adverse effect on our business,
results of operations, and financial condition.
POTENTIAL FOR ERRORS IN PRODUCTS AND SERVICES
We offer and expect to offer complex products and services which may
contain undetected errors when first introduced or when new versions are
released. If we market products and services that have errors or that do not
function properly, we may experience negative publicity, loss of or delay in
market acceptance or claims against us by customers, any of which may have a
material adverse effect on our business, results of operation, and financial
condition.
DEPENDENCE ON THE INTERNET; UNCERTAIN ACCEPTANCE OF THE INTERNET AS A MEDIUM FOR
COMMERCE
Use of the Internet by consumers is at an early stage of development,
and market acceptance of the Internet as a medium for commerce is subject to a
high level of uncertainty. The Internet may not prove to be a viable commercial
marketplace because of inadequate development of the necessary infrastructure,
such as reliable network backbones, or complementary services, such as
high-speed modems and security procedures for financial transactions or delays
in the development and adoption of new standards and protocols (for example, the
next generation Internet protocol) to handle increased levels of Internet
activity or due to increased government regulation. Our future success will
depend on our ability to significantly increase revenue which will require the
development and widespread acceptance of the Internet as a medium for commerce.
We can give no assurance that the Internet will be a successful retailing
channel. If use of the Internet does not continue to grow, or if the necessary
Internet infrastructure or complementary services are not developed to
effectively support growth that may occur, our business, results of operations,
and financial condition could be materially adversely affected. We can give no
assurance that we will not continue to be largely dependent on the Internet.
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RISKS OF TECHNOLOGY TRENDS AND EVOLVING INDUSTRY STANDARDS; BANDWIDTH
The delivery of music online is and will continue to be, like the
Internet, characterized by rapidly changing technology, evolving industry
standards, changes in customer requirements, and frequent new service and
product introductions. Online delivery of music, at current compression rates,
requires large amounts of Internet bandwidth to download to a customer's
computer in an acceptable time span. Currently, only a limited number of
consumers have such bandwidth capability. Unless there is widespread access to
high speed Internet connections or deeper compression of music files, consumers
may become frustrated with long download times and the market for online digital
music distribution will remain limited. Our success will depend upon the
development of Internet infrastructure that makes large amounts of bandwidth
available to a wide number of users through such high-speed technology as cable
and digital subscriber lines. Our success will also depend on our ability to
effectively use leading technologies to continue to develop our technological
expertise to enhance our current services, to develop new services that meet
changing customer requirements and to influence and respond to emerging industry
standards and other technological changes on a timely and cost-effective basis.
If major record labels or the market accept an universal standard for the
electronic delivery of music, such as contemplated by the Secured Digital Music
Initiative, which is not compatible or otherwise competes with NETrax, such
acceptance will likely have a material adverse effect on our business, results
of operations, and financial condition. In addition, our business could be
adversely affected if an industry standard for hardware used in the storage and
playback of our products fails to develop in a timely manner or at all.
DEPENDENCE ON THIRD PARTIES FOR INTERNET OPERATIONS
Our ability to advertise on other Internet sites and the willingness of
the owners of such sites to direct users to our websites through hypertext links
are critical to the success of our Internet operations. We also rely on the
cooperation of owners of copyrighted materials and Internet search services and
on our relationships with third party vendors of Internet development tools and
technologies. We can give no assurance that the necessary cooperation from third
parties will be available on acceptable commercial terms or at all. If we are
unable to develop and maintain satisfactory relationships with such third
parties on acceptable commercial terms, or if our competitors are better able to
leverage such relationships, our business, results of operations and financial
condition will be materially adversely affected.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES RELATING TO THE WORLD WIDE WEB
Existing domestic and international laws or regulations specifically
regulate communications or commerce on the World Wide Web or the Internet.
Furthermore, laws and regulations that address issues such as user privacy,
pricing, online content regulation, taxation and the characteristics and quality
of online products and services are under consideration by federal, state, local
and foreign governments and agencies. Several telecommunications companies have
petitioned the United States Federal Communications Commission to regulate
Internet service providers and online service providers in a manner similar to
the regulation of long distance telephone carriers and to impose access fees on
such companies. This regulation, if imposed, could increase the cost of
transmitting data over the World Wide Web. Moreover, it may take years to
determine the extent to which existing laws relating to issues such as
intellectual property ownership and infringement, libel, obscenity and personal
privacy are applicable to the World Wide Web. The United States Federal Trade
Commission and government agencies in certain states have been investigating
certain Internet companies regarding their use of personal information. We could
incur additional expenses, and could also be subject to restrictions on our
ability to use and provide customers information, if any new regulations
regarding the use of personal information are introduced or if these agencies
choose to investigate our privacy practices. Any new laws or regulations
relating to the World Wide Web, or certain application or interpretation of
existing laws, could decrease the growth in the use of the World Wide Web,
decrease the demand for our website or otherwise materially adversely affect our
business.
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DEVELOPMENT OF WEBSITES AND NETRAX CATALOG
Although we have completed the initial development of our websites, we
have to continually update them to incorporate purchases of new and existing
content. The number of NETrax which may be acquired by purchasers are limited
and we can give no assurance that we will be able to expand the selection of
NETrax available for purchase. If we are unable to increase the number of NETrax
available for purchase, we will be unable to generate sufficient revenue to
support continued development. Our ability to expand our NETrax offerings
depends significantly upon our ability to negotiate licenses with major record
labels. We currently have no such licenses. See "Risk Factors - Dependence on
Major Record Labels".
DEPENDENCE ON LICENSED TECHNOLOGY AND MUSIC RIGHTS
We rely on certain technology licensed from third parties, including
Mr. Fritsch, our chief executive officer, from whom we license certain key
technologies and trademarks. We may need to license additional technologies in
the future in order to support its platform. There can be no assurance that new
third party technology licenses will be available to us on acceptable terms or
at all. In addition, we license music content from record labels and artists,
and we can give no assurance that any particular music content will be available
to us on acceptable terms or at all. The intellectual property upon which we
rely includes certain technology which are licensed to us by Mr. Fritsch. Such
license, however, only continues in effect so long as we pay compensation equal
to 0.25% of gross revenue to Mr. Fritsch (until the later of 20 years or the
expiration of any such patents which may be issued). If we fail to pay Mr.
Fritsch such compensation, MCY will lose its license and its ability to utilize
such technology. We can give no assurance that Mr. Fritsch will not terminate
the license for other reasons. If Mr. Fritsch were to terminate the license,
such termination will likely have a materially adverse effect on our business.
See "Business - Technology".
We have not obtained licenses for the public performance of all
copyrighted musical works which will be the subject of our business operations.
We do not believe such licenses are necessary for the conduct of our business,
but will seek to obtain such licenses if necessary. The companies that
administer the reporting and collection of royalties based on musical
performances believe that the downloading of digital music files is a
"performance," entitling them to receive payment. If such licenses are necessary
and we fail to obtain them, we may become subject to claims of copyright
infringement.
INTERNATIONAL MARKETS
Our success depends on our ability to generate international sales. We
can give no assurance that we will be successful in generating international
sales of our products.
Our sales to customers in certain foreign countries may be subject to a
number of risks including: foreign currency risk; the risks that agreements may
be difficult or impossible to enforce and receivables difficult to collect
through a foreign country's legal system; foreign customers may have longer
payment cycles; or foreign countries could impose withholding taxes or otherwise
tax our foreign income, impose tariffs, embargoes, or exchange controls, or
adopt other restrictions on foreign trade. In addition, the laws of certain
countries do not protect our offerings and intellectual property rights to the
same extent as the laws of the United States. Our failure to compete
successfully or to expand the distribution of our offerings in international
markets could have a material adverse effect on our business, results of
operations, and financial condition.
SINGLE STOCKHOLDER WILL CONTROL APPROXIMATELY 80% OF STOCKHOLDERS' VOTES
Mr. Fritsch will beneficially own approximately 23,680,078 shares of
our common stock and all of our outstanding Series 1 preferred stock which
collectively carry approximately 80% of all voting rights held by all of our
stockholders. Mr. Fritsch will be able to control all matters requiring approval
by our stockholders, including the election of directors and the approval of
significant corporate transactions. This concentration in ownership will
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<PAGE>
make some transactions more difficult or impossible without the support of Mr.
Fritsch and may have the effect of delaying, deterring or preventing a change of
control in our company.
LITIGATION
A former trade partner contributed DM 1,600,000 to the development of
the our platform and subsequently demanded repayment of DM 1,210,000 of this
amount on January 30, 1998. Fritsch & Friends rejected this demand on February
3, 1998, and since then the partner has not pursued this alleged claim. In
addition, Fritsch & Friends entered into an agreement with an investment group
in November, 1997, which it subsequently revoked. There have been no official
claims made by this group and no correspondence with the group for over 12
months. We believe that we will be unlikely to sustain material losses in
connection with these matters in excess of amounts previously accrued. We can
give no assurance that future litigation by these groups will not have a
materially adverse effect upon our financial condition.
In December 1999, a former employee of MCY Music World, Inc. filed a
complaint in New York State Supreme Court claiming approximately $23,000,000 in
damages for an alleged breach of contract, wrongful termination and fraud
arising from his claim that he is entitled to additional compensation including
20,000 shares of MCY.com, Inc. common stock, stock options, fees and royalties
related to the signing and distribution of content as well as fees related to a
private placement of our stock on October 25, 1999. Due to the fact that the
complaint was only recently filed, discovery in the case has not started and MCY
has limited information upon which to assess the validity of this suit. Based,
however, upon MCY's understanding of the facts as of January 4, 2000 MCY
believes that the former employee's claims lack substantial merit, and we intend
to vigorously defend against this action.
POTENTIAL FLUCTUATIONS IN QUARTERLY FINANCIAL RESULTS
If we are unable to adjust spending in a timely manner to compensate
for any unexpected revenue shortfall, any significant revenue shortfall will
likely have an immediate material adverse effect on our business, operating
results and financial condition. In addition, we intend to substantially
increase our operating expenses for product development, sales and marketing. To
the extent such expenses precede or are not subsequently followed by increased
revenue, our operating results will fluctuate and net anticipated losses in a
given quarter may be greater than expected. Accordingly, quarter-to-quarter
comparisons of our revenue and operating results will not necessarily be
meaningful, and such comparisons may not be accurate indicators of future
performance. In addition, quarterly fluctuations in our operating results may
create volatility in the market price for our common stock.
CERTAIN IMPLICATIONS OF TRADING OVER-THE COUNTER; "PENNY STOCK" REGULATIONS
Our common stock is quoted for sale in the over-the-counter market on
the OTC Electronic Bulletin Board. An investor will find it more difficult to
dispose of securities trading over-the-counter than if such securities had been
approved for listing on a national securities exchange or on the NASDAQ SmallCap
market. We have not applied for listing on a national securities exchange or the
NASDAQ SmallCap market, but we intend to so in the future. We can give no
assurance that our securities will be listed on any such market or that any
market will develop for our securities.
The SEC has adopted "penny stock" regulations which apply to securities
traded over-the-counter. These regulations generally define "penny stock" to be
any equity security that has a market price of less than $5.00 per share, a
warrant that has an exercise price of less than $5.00 per share, an equity
security of an issuer (assuming the corporation has been in existence for at
least three years) with net tangible assets of less than $2,000,000 or an equity
security of an issuer with average revenue in the last three fiscal years of
less than $6,000,000 as indicated in audited financial statements. Subject to
certain limited exceptions, the rules for any transaction involving a "penny
stock" require the delivery, prior to the transaction, of a risk disclosure
document prepared by the company that contains certain information describing
the nature and level of risk associated with investments in the penny stock
market. A broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered
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<PAGE>
representative and current quotations for the securities. Monthly account
statements must be sent by the broker-dealer disclosing the estimated market
value of each penny stock held in the account or indicating that the estimated
market value cannot be determined because of the unavailability of firm quotes.
In addition, the rules impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and institutional accredited investors (generally institutions with
assets in excess of $5,000,000). These practices require that, prior to the
purchase, the broker-dealer determined that transactions in penny stocks were
suitable for the purchaser and obtained the purchaser's written consent to the
transaction. Consequently, the "penny stock" rules may in the future restrict
the ability of broker-dealers to sell our securities and may affect the ability
of purchasers of our securities to sell them in the secondary market.
USE OF PROCEEDS
The Selling Stockholders are selling all of the Shares covered by this
Prospectus for their own account. Accordingly, we will not receive any of the
proceeds from the resale of the Shares. We have agreed to bear the expenses
relating to the registration of the shares, other than brokerage commissions and
expenses, if any, which will be paid by the Selling Stockholders.
DIVIDEND POLICY
We have never declared or paid cash dividends on our Common Stock. We
currently anticipate that we will retain all available funds for use in the
operation of our business. As such, we do not anticipate paying any cash
dividends on our Common Stock in the foreseeable future.
SELLING STOCKHOLDERS
We issued securities exercisable for the shares covered by this
Prospectus to the Selling Stockholders in connection with the 1999 Stock Option
Plan, approved by the Board of Directors and Shareholders of MCY.com on August
2, 1999, and the Amended and Restated 1999 Stock Option Plan, approved by the
Board of Directors and Shareholders of MCY.com on September 17, 1999, and
incorporated herein by reference to our Current Report on Form 8-K dated October
13, 1999 (as filed on October 15, 1999). The shares underlying such securities
were registered under the Securities Act of 1933 on MCY's Form S-8, filed with
the Commission on October 27, 1999.
The following table lists certain information regarding the Selling
Stockholders' ownership of shares of our Common Stock as of January 6, 2000, and
as adjusted to reflect the sale of the shares. Information concerning the
Selling Stockholders may change from time to time.
The information in the table concerning the Selling Stockholders who
may offer Shares hereunder from time to time is based on information provided to
us by such stockholders, except for the assumed exercise of the options which is
based solely on the assumptions referenced in footnotes (1), (2), and (3) to the
table.
II-14
<PAGE>
<TABLE>
Shares of
Common Stock Shares of Shares of Common Stock Owned
Name of Selling Stockholder Owned Prior to Common Stock after the Offering (3)
Offering(1)(5) to be Sold (2) ----------------------------
Number Percent
----------------- ---------------- ------ -------
<S> <C> <C> <C> <C>
Bernhard Fritsch, President and 43.59%
Chief Executive Officer 23,813,828(4) 133,750(4) 23,640,141
Mitchell Lampert, General Counsel 393,750(4) 133,750(4) 220,063 Nil
Total
24,127,704 267,500 23,820,204 43.92%
</TABLE>
- -----------------
* Less Than 1 Percent.
(1) Assumes the exercise of 133,750 options by each Selling Stockholder.
(2) Assumes that each Selling Stockholder will exercise 133,750 options.
(3) Assumes that all of the shares of Common Stock offered hereby are sold
and no other shares of Common Stock are sold during the offering
period. Additionally assumes delivery of 39,937 shares of Common Stock
by each selling shareholder to MCY as payment for the exercise of
133,750 Options.
(4) Includes 133,750 shares of Common Stock issuable upon exercise of the
Options.
(5) Does not take into account the exercise of any other options owned by
the Selling Shareholders.
The Selling Stockholders are affiliates of MCY.
PLAN OF DISTRIBUTION
The Selling Stockholders may offer their shares of our Common Stock at
various times in one or more of the following transactions:
. on any U.S. securities exchange on which our Common Stock may
be listed at the time of such sale;
. in the over-the-counter market;
. in transactions other than on such exchanges or in the
over-the-counter market;
. in connection with short sales;
. in a combination of any of the above transactions.
The Selling Stockholders may offer their shares of Common Stock at
prevailing market prices at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices.
The Selling Stockholders may use broker-dealers to sell their shares of
Common Stock. If this happens, broker-dealers will either receive discounts or
commission from the Selling Stockholder, or they will receive commissions from
purchasers of shares of Common Stock for whom they acted as agents. Such brokers
may act as dealers by purchasing any and all of the Shares covered by this
Prospectus either as agents for others or as principals for their own accounts
and reselling such securities pursuant to this Prospectus.
II-15
<PAGE>
The Selling Stockholder and any broker-dealers or other persons acting
on the behalf of parties that participate in the distribution of the shares may
be deemed to be underwriters. As such, any commissions or profits they receive
on the resale of the shares may be deemed to be underwriting discounts and
commissions under the Securities Act.
As of the date of this Prospectus, we are not aware of any agreement,
arrangement or understanding between any broker or dealer and any of the Selling
Stockholders with respect to the offer or sale of the Shares pursuant to this
Prospectus.
To the extent required under the Securities Act, we will file a
supplemental prospectus to disclose (a) the name of any such broker-dealers, (b)
the number of Shares involved, (c) the price at which such Shares are to be
sold, (d) the commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable, (e) that such broker-dealers did not conduct
any investigation to verify the information set out in this Prospectus, as
supplemented, and (f) other facts material to the transaction.
The Selling Stockholders are selling all of the shares covered by this
Prospectus for their own account. Accordingly, we will not receive any proceeds
from the resale of these shares.
We shall bear customary expenses incident to the registration of the
shares for the benefit of the Selling Stockholders in accordance with our
agreements with such Selling Stockholders, other than underwriting discounts
commissions and attorneys' fees, if any, directly attributable to the sale of
such securities by or on behalf of the Selling Stockholders.
Pursuant to the terms of the Stock Option Agreements between MCY and,
respectively, Bernhard Fritsch and Mitchell Lampert, we have agreed to use our
best efforts to keep the Registration Statement of which this Prospectus is a
part effective until the earliest of (i) the date that all of the Registrable
Securities have been sold pursuant to the Registration Statement of which this
Prospectus is a part, or (ii) the date the Selling Stockholders may sell all the
Shares under the provisions of Rule 144 without limitations.
DESCRIPTION OF SECURITIES
GENERAL
We are authorized to issue up to 100,000,000 shares of Common Stock,
par value $.001 per share and up to 10,000,000 shares of Preferred Stock, par
value $.0001 per share. Without giving effect to the exercise of any options, as
of January 6, 2000, we had 54,230,988 shares of Common Stock issued and
outstanding, and 1,000,000 shares of Preferred Stock issued and outstanding.
COMMON STOCK
Each holder of our common stock is entitled to one vote for each share
standing in such holder's name in our records on all matters submitted to a vote
of our stockholders, except as otherwise required by law. Holders of our common
stock do not have cumulative voting rights so that, subject to the right of the
holders of our Series 1 voting preferred stock as discussed below, holders of
more than 50% of the combined shares of our common stock voting for the election
of directors may elect all of the directors is they choose to do so and, in that
event, the holders of the remaining shares of our common stock will not be able
to elect any members to our board of directors. In addition, the rights,
privileges and preferences of holders of our common stock will be subject to,
and may be adversely affected by, the rights of the holders of any shares of
preferred stock which we may designate and issue in the future.
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<PAGE>
Holders of our common stock are entitled to equal dividends and
distributions per share when, as and if declared by our board of directors from
funds legally available. Holders of our common stock do not have pre-emptive
rights to subscribe for any of our securities nor are any shares of our common
stock redeemable or convertible into any of our other securities. If we
liquidate, dissolve or wind up our business or affairs, our assets will be
divided up pro-rata on a share-for-share basis among the holders of our common
stock after creditors and preferred shareholders are paid.
PREFERRED STOCK
Our board of directors has the authority to issue 10,000,000 shares of
our preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions, including dividend, conversion, voting, redemption
(including sinking fund provisions), and other rights, liquidation preferences,
and the number of shares constituting any series and the designations of such
series, without any further vote or action by our stockholders. To date,
1,000,000 shares of our series 1 preferred stock have been issued to Mr.
Fritsch. Each of these shares entitles the holder to 100 votes for each share
held on all matters submitted to a vote of stockholders. The Series 1 preferred
stock does not carry any dividend, liquidation, conversion or preemptive rights.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the General Corporation Law of the State of Delaware
provides, in general, that a corporation incorporated under the laws of the
State of Delaware, such as the registrant, may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than a derivative action by or in
the right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful.
Article VII of our amended and restated certificate of incorporation
provides that to the fullest extent permitted by the Delaware General
Corporation Law as the same exists or as may hereafter be amended, none of our
directors shall be personally liable to us or to our stockholders for or with
respect to any acts or omissions in the performance of his or her duties as one
of our directors. If Article VII of our amended and restated certificate of
incorporation is amended or repealed, the amendment or repeal will not eliminate
or reduce the effect of any right or protection of our directors that existed
immediately prior to such amendment or repeal.
Our by-laws, as amended, provide that we shall indemnify our officers,
directors and employees. The rights to indemnity continue if even a person has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the person's heirs, executors and administrators. In addition, we
shall pay for any expenses incurred by a director or officer in defending any
action, suit or proceeding by reason of the fact that he or she is or was one of
our directors or officers unless such officer, director or employee is adjudged
liable for negligence or misconduct in performing his or her duties. If we do
not pay in full the claim for indemnification of any such officer, director or
employee within thirty days after we receive the written claim, the claimant may
at any time thereafter sue us to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. We may, by action of our board of
directors, indemnify our employees and agents with the same scope and effect as
the foregoing indemnification of our directors and officers.
We maintain directors and officers liability insurance coverage with a
$10,000,000 annual aggregate limit of liability. National Union Fire Insurance
Company provides us with a primary $ 2,000,000 layer while Royal
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<PAGE>
Insurance Company provides us with a $ 3,000,000 layer in excess of the National
Union policy. TIG Insurance Company provides us with a $ 5,000,000 layer in
excess over the National Union and Royal Insurance policies. All of these
policies expire on July 15, 2000.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer 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.
LEGAL MATTERS
The validity of the securities being offered hereby was reviewed and
confirmed for us by Parker Chapin Flattau & Klimpl, LLP, New York, New York.
EXPERTS
Our consolidated financial statements as of (1) July 1, 1999 and for the period
January 8, 1999 through July 31, 1999 incorporated in this Prospectus by
reference to the our Current Report on Form 8-K dated October 13, 1999 and filed
on October 15, 1999 and the combined financial statements of the predecessor
companies of MCY.com Inc. as of and for the years ended December 31, 1996, 1997
and 1998 and for the periods from January 1, 1999 through July 2, 1999 have been
audited by Richard A. Eisner & Company, LLP, independent auditors, as set forth
in their report dated September 17, 1999 accompanying such financial statements,
and are incorporated herein by reference in reliance upon the said report given
on the authority of said firm as experts in accounting and auditing.
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<PAGE>
PART II.
INCORPORATION OF DOCUMENTS BY REFERENCE.
Disclosedin Prospectus under "Where You Can Find More Information About
Us."
DISCRIPTION OF SECURITIES.
Disclosed in Prospectus under same title.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Disclosed in Prospectus under same title.
EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
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<PAGE>
EXHIBITS.
Exhibit
NUMBER DESCRIPTION
- ------ -----------
4.1 Amended and Restated Certificate of Incorporation. (1)
4.2 By-Laws, as amended. (2)
5.1 Opinion of Parker Chapin Flattau & Klimpl, LLP. (6)
23.1 Consent of Richard A. Eisner & Company, LLP. (3)
23.2 Consent of Parker Chapin Flattau & Klimpl, LLP (3).
24.1 Powers of Attorney of Directors and Certain Officers of the
Registrant.(4).
99.1 MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan.
(5)
99.2 Form of Award Agreement ("Stock Option Agreement") under the
MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan
(6)
- --------------
(1) Incorporated by reference from our current report on Form
8-K dated August 2, 1999 (date of earliest event reported).
(2) Incorporated by reference from Exhibit 3.3 to our registration
statement on Form SB-2 as filed with the Securities and
Exchange Commission ("SEC") on August 9, 1996, SEC File No.
333-9809.
(3) Filed herewith.
(4) Filed herewith as part of the signature page to this
registration statement.
(5) Incorporated by reference from Exhibit 10.0 to our current
report on Form 8-K dated October 13, 1999 (date of earliest
event reported) as filed with the SEC on October 15, 1999, SEC
File No.
333-9809.
(6) Incorporated by reference to our Form S-8 as filed with the
SEC on October 27, 1999, SEC File No. 333-9809.
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<PAGE>
ITEM 9. UNDERTAKINGS.
We undertake to do the following:
(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, as amended;
(ii) 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 thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this registration statement;
(iii) 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 paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8, Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports that we
file pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered by
such registration statement, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering.
(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.
We undertake that, for purposes of determining any liability
under the Securities Act of 1933, as amended, each filing of our annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934, as amended, that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered in such registration statement, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering.
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<PAGE>
Regarding whether indemnification for liabilities arising
under the Securities Act of 1933, as amended, may be permitted to our directors,
officers and controlling persons pursuant to the provisions described under Item
6 above, or otherwise, we have 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, as amended, and is, therefore,
unenforceable. If a claim for indemnification against such liabilities (other
than our payment of expenses incurred or paid by one of our directors, officers
or controlling persons 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, we 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
it is against public policy as expressed in the Securities Act of 1933, as
amended, and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
we certify that we have reasonable grounds to believe that we meet all of the
requirements for filing on Form S-8 and have duly caused this registration
statement to be signed on our behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 6th day of
January, 2000.
MCY.com, Inc.
By: /S/ BERNHARD FRITSCH
--------------------------------------
Name: Bernhard Fritsch
Title: President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Bernhard Fritsch with the power of
substitution, as his attorney-in-fact, in all capacities, to sign any amendments
to this registration statement (including post-effective amendments) and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorney-in-fact or his substitute may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities indicated on the 6th day of January, 2000.
SIGNATURE TITLE
-------- -----
/S/ BERNHARD FRITSCH Chairman of the Board of
- ---------------------- Directors, Chief Executive
Name: Bernhard Fritsch Officer, President and Director
/S/ LISA SHORT
- ----------------------
Name: Lisa Short Secretary
/S/ HUBERTUS VON HESSE
- ---------------------------
Name: Hubertus von Hesse Director
11-23
<PAGE>
EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION
- ----- -----------
4.1 Amended and Restated Certificate of Incorporation. (1)
4.2 By-Laws, as amended. (2)
5.1 Opinion of Parker Chapin Flattau & Klimpl, LLP. (6)
23.1 Consent of Richard A. Eisner & Company, LLP. (3)
23.2 Consent of Parker Chapin Flattau & Klimpl, LLP (3).
24.1 Powers of Attorney of Directors and Certain Officers of the
Registrant.(4).
99.1 MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan.
(5)
99.2 Form of Award Agreement ("Stock Option Agreement") under the
MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan
(6)
- ----------------------
(1) Incorporated by reference from our current report on Form 8-K
dated August 2, 1999 (date of earliest event reported).
(2) Incorporated by reference from Exhibit 3.3 to our registration
statement on Form SB-2 as filed with the Securities and
Exchange Commission ("SEC") on August 9, 1996, SEC File No.
333-9809.
(3) Filed herewith.
(4) Filed herewith as part of the signature page to this
registration statement.
(5) Incorporated by reference from Exhibit 10.0 to our current
report on Form 8-K dated October 13, 1999 (date of earliest
event reported) as filed with the SEC on October 15, 1999, SEC
File No.
333-9809.
(6) Incorporated by reference to our Form S-8 as filed with the
SEC on October 27, 1999, SEC File No. 333-9809.
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Post-Effective Amendment No. 1 to Form S-8 Registration Statement (No. 333-9809)
pertaining to the MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan
and to the incorporation by reference therein of our reports dated September 17,
1999, with respect to (i) the consolidated financial statements of MCY.com, Inc.
as of July 31, 1999 and for the period from January 8, 1999 (inception) through
July 31, 1999 and (ii) the combined financial statements of the predecessor
companies of MCY.com, Inc. as of and for the years ended December 31, 1996, 1997
and 1998 and for the periods from January 1, 1999 through July 2, 1999 and
January 1, 1996 through July 2, 1999 included in the MCY.com, Inc. Current
Report on Form 8-KSB dated October 13, 1999, filed with the Securities and
Exchange Commission.
/s/ Richard A. Eisner & Company, LLP
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Richard A. Eisner & Company, LLP
New York, New York
January 6, 2000
<PAGE>
EXHIBIT 23.2
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CONSENT OF ATTORNEYS
[Letterhead of Parker Chapin Flattau & Klimpl, LLP]
January 6, 2000
MCY.com, Inc.
1133 Avenue of the Americas
28th Floor
New York, New York 10036
Dear Sirs:
We have acted as counsel to MCY.com, Inc., a Delaware corporation (the
"Company"), in connection with its filing of a post-effective amendment to its
registration statement on Form S-8, Registration No. 333-9809 (the "Registration
Statement") being filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to an offering of an aggregate of
267,500 shares of common stock, par value $.001 per share (the "Common Stock").
We hereby consent to the filing of this consent as an exhibit to the
Registration Statement and to the reference made to us under the caption "Legal
Matters" in the prospectus constituting part of the Registration Statement.
Very truly yours,
/s/PARKER CHAPIN FLATTAU & KLIMPL, LLP
PARKER CHAPIN FLATTAU & KLIMPL, LLP
