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As filed with the Securities and Exchange Commission on May 6, 1999.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AUTOBYTEL.COM INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0711569
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
18872 MACARTHUR BOULEVARD
IRVINE, CALIFORNIA 92612-1400
(Address of Principal Executive Offices) (Zip Code)
1996 STOCK OPTION PLAN
1996 STOCK INCENTIVE PLAN
1996 EMPLOYEE STOCK PURCHASE PLAN
1998 STOCK OPTION PLAN
1999 STOCK OPTION PLAN
(Full title of the plans)
ARIEL AMIR
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
18872 MACARTHUR BOULEVARD
IRVINE, CALIFORNIA 92612-1400
(Name and address of agent for service)
(949) 225-4500
(Telephone number, including area code, of agent for service)
COPIES TO:
THOMAS R. POLLOCK, ESQ.
BRIGITTE LIPPMANN, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
399 PARK AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 318-6000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Amount to be Price Per Offering Registration
Title of Securities to be Registered Registered (1) Share (2) Price (2) Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001 .... 173,334 $ 0.84 $ 145,600.56 $ 21,378.14
715,829 0.90 644,246.10
435,653 4.50 1,960,438.50
24,443 11.25 274,983.75
2,466,738 13.20 32,560,941.60
143,000 16.00 2,288,000.00
1,507,943 25.88 39,025,564.84
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5,466,940
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</TABLE>
(1) The number of shares of common stock, par value $0.001 per share (the
"Common Stock"), stated above consists of the aggregate number of shares
which may be sold upon the exercise of options which have been granted
and/or may hereafter be granted under the 1996 Stock Option Plan, 1996
Stock Incentive Plan, 1996 Employee Stock Purchase Plan, 1998 Stock Option
Plan and 1999 Stock Option Plan (collectively, the "Plans"). The maximum
number of shares which may be sold upon the exercise of such options
granted under the Plans are subject to adjustment in accordance with
certain anti-dilution and other provisions of the Plans. Accordingly,
pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement includes, in addition to the number of shares stated above, an
indeterminate number of shares which may be subject to grant or otherwise
issuable after the operation of any such anti-dilution and other
provisions.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933 as follows:
(i) in the case of shares of Common Stock which may be purchased upon
exercise of outstanding options, the fee is calculated on the basis of the
price at which the options may be exercised; and (ii) in the case of shares
of Common Stock for which options have not yet been granted and the option
price of which is therefore unknown, the fee is calculated on the basis of
the average of the high and low sale prices per share of Common Stock as
quoted on the Nasdaq National Market on May 5, 1999 (within 5 business days
prior to filing this Registration Statement).
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PART I
EXPLANATORY NOTE
This registration statement registers shares, par value $0.001 per
share, of common stock of autobytel.com inc., that were issued and sold or may
be issued and sold under Autobytel.com's 1996 Stock Option Plan, 1996 Stock
Incentive Plan, 1996 Employee Stock Purchase Plan, 1998 Stock Option Plan and
1999 Stock Option Plan (collectively the "Plans"). This registration statement
contains two parts. The first part contains a prospectus prepared in accordance
with Part I of Form S-3 (in accordance with Instruction C of the General
Instructions to Form S-8) which covers reoffers and resales of shares of the
common stock issued pursuant to the Plans. The second part contains information
required in the registration statement pursuant to Part II of Form S-8. Pursuant
to the Note to Part I of Form S-8, the plan information specified by Part I of
Form S-8 is not being filed with the Securities and Exchange Commission.
Autobytel.com will provide without charge to any person, upon written or
oral request of such person, a copy of each document incorporated by reference
in Item 3 of Part II of this registration statement (which documents are
incorporated by reference in the Section 10(a) prospectus as set forth in Form
S-8), other documents required to be delivered to eligible employees pursuant to
Rule 428(b) of the Securities Act of 1933, as amended, or additional information
about the Plans. Requests should be directed to autobytel.com inc., 18872
MacArthur Boulevard, Irvine, California 92612-1400, attention: Ariel Amir, Esq.
(telephone: 949-225-4500).
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REOFFER PROSPECTUS
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265,399 SHARES OF COMMON STOCK
AUTOBYTEL.COM INC.
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The shares of common stock, $0.001 par value per share, of autobytel.com
inc. covered by this prospectus, may be offered and sold to the public by
certain shareholders of Autobytel.com (collectively, the "Selling
Securityholders"). The Selling Securityholders have acquired the shares through
their exercise of stock options granted to them under Autobytel.com's 1996 Stock
Option Plan and 1996 Stock Incentive Plan.
Our common stock is quoted on the Nasdaq National Market under the
symbol "ABTL." On May 5, 1999, the closing price of a share of our common stock
on the Nasdaq National Market was $27.00 per share.
The Selling Securityholders may sell their shares directly or indirectly
in one or more transactions on the Nasdaq National Market or on any stock
exchange on which the shares may be listed at the time of sale, in privately
negotiated transactions, or through a combination of such methods. These sales
may be at fixed prices (which may be changed), at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices.
The Selling Securityholders may sell shares through one or more agents,
brokers or dealers or directly to purchasers. Such brokers or dealers may
receive compensation in the form of commissions, discounts or concessions from
the Selling Securityholders and/or purchasers of the shares, or both (which
compensation as to a particular broker or dealer may be in excess of customary
commissions). In connection with such sales, the Selling Securityholders and any
participating broker or dealer may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions they receive and the proceeds
of any sale of shares may be deemed to be underwriting discounts and commissions
under the Securities Act. Autobytel.com will not receive any proceeds from the
sale of the shares by the Selling Securityholders.
PROSPECTIVE PURCHASERS OF THE AUTOBYTEL.COM SHARES SHOULD SEE "RISK FACTORS"
BEGINNING ON PAGE 2.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is May 6, 1999
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AVAILABLE INFORMATION
Autobytel.com has filed with the Securities and Exchange Commission a
registration statement on Form S-8, together with exhibits and documents
incorporated by reference in the registration statement, under the Securities
Act with respect to the shares being offered pursuant to this prospectus. This
prospectus does not contain all the information set forth in the registration
statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information regarding Autobytel.com and the
common stock offered, reference is made to the registration statement, exhibits
and the documents incorporated in the registration statement by reference.
Autobytel.com is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and, in accordance therewith, files
reports and other information with the SEC. The registration statement,
including exhibits, and the reports and other information filed by Autobytel.com
can be inspected without charge at the public reference facilities maintained by
the SEC at the SEC's principal office at 450 Fifth Street, N.W., Room 1024,
Washington, D.C., 20549, and at the Regional Offices of the SEC located at Seven
World Trade Center, l3th Floor, New York, New York 10048, and Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can be obtained from such offices at fees prescribed by the SEC. The
public may obtain information on the operation of the Public Reference room by
calling the SEC at 1-800-SEC-0330. The SEC maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of this
site is http://www.sec.gov. Autobytel.com shares are quoted on the Nasdaq
National Market.
RISK FACTORS
In addition to the other information in this prospectus, prospective
investors should carefully consider the following risk factors in evaluating us,
our business and an investment in the common stock. Unless specified otherwise
as used herein, the terms "we," "us" or "our" refers to autobytel.com inc. and
its wholly owned subsidiaries.
WE HAVE A HISTORY OF NET LOSSES AND EXPECT NET LOSSES FOR THE FORESEEABLE
FUTURE. IF WE CONTINUE TO LOSE MONEY, OUR OPERATIONS WILL NOT BE FINANCIALLY
VIABLE.
We were formed in January 1995 as Auto-By-Tel LLC, and first received
revenues from operations in March 1995. We therefore have a limited operating
history upon which an investor may evaluate our operations and future prospects.
Because of the recent emergence of the Internet-based vehicle information and
purchasing industry, none of our executives has significant experience in the
industry. This limited operating history and management experience means it is
difficult for us to predict future operating results. We have incurred losses
every quarter since inception and expect to continue to incur losses for the
foreseeable future. We had an accumulated deficit of $43.3 million and $23.9
million as of December 31, 1998 and 1997, respectively. Our potential for future
profitability must be considered in light of the risks, uncertainties, expenses
and difficulties frequently encountered by companies in the early stages of
development, particularly companies in new and rapidly evolving markets, such as
the market for Internet commerce. To achieve profitability, we must, among other
things:
- generate increased vehicle buyer traffic to our Web site,
- continue to send new and pre-owned vehicle purchase requests to
dealers that result in sufficient dealer transactions to justify our
fees,
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- continue to expand the number of dealers in our network and enhance
the quality of dealers,
- respond to competitive developments,
- increase our brand name visibility,
- successfully introduce new services,
- continue to attract, retain and motivate qualified personnel, and
- continue to upgrade and enhance our technologies to accommodate
expanded service offerings and increased consumer traffic.
We cannot be certain that we will be successful in achieving these
goals.
IF OUR DEALER TURNOVER INCREASES, OUR DEALER NETWORK AND REVENUE DERIVED FROM
THIS NETWORK MAY DECREASE.
Substantially all of our revenues are derived from fees paid by our
network of subscribing dealerships. If dealer turnover increases and we are
unable to add new dealers to mitigate any turnover, our revenues will decrease
as our network of dealers decreases. If the number of dealers in our network
declines our revenues may decrease and our business, results of operations and
financial condition will be materially and adversely affected. A material factor
affecting dealer turnover is our ability to provide dealers with high quality
purchase requests. High quality purchase requests are those that result in high
closing ratios. Closing ratio is the ratio of the number of vehicles purchased
at a dealer generated from purchase requests to the total number of purchase
requests sent to that dealer. All of our subscribing dealerships have entered
into written marketing agreements with us having a stated term of one year or
five years, but they are cancelable at the option of either party upon 30 days
notice. We cannot assure that dealers will not terminate their agreements with
us. Subscribing dealers may terminate their relationship with us for any reason,
including an unwillingness to accept our subscription terms or in order to join
alternative marketing programs. Our business is dependent upon our ability to
attract and retain qualified new and pre-owned vehicle dealers. During 1998, 556
subscribing dealers in the United States terminated their affiliation with us or
were terminated by us. During 1998 we also added 1,323 subscribing dealers to
our dealership network. In order for us to grow or maintain our dealer network,
we may need to reduce dealer turnover.
WE MAY LOSE SUBSCRIBING DEALERS IF WE RECONFIGURE DEALER TERRITORIES. IF WE LOSE
DEALERS, WE WILL LOSE THE REVENUES ASSOCIATED WITH THOSE DEALERS.
If the volume of purchase requests increases, we may need to reduce or
reconfigure the exclusive territories currently assigned to dealerships in order
to serve consumers more effectively. If a dealer is unwilling to accept a
reduction or reconfiguration of its territory, it may terminate its relationship
with us. The loss of dealers will cause a subsequent reduction in revenue unless
we are able to mitigate this loss by adding new dealers or increasing the fees
we receive from our other dealers. A dealer also could sue us to prevent such
reduction or reconfiguration, or collect damages from us. We have experienced
one such lawsuit. A material decrease in the number of dealers subscribing to
our network or litigation with dealers could have a material adverse effect on
our business, results of operations and financial condition.
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WE RELY HEAVILY ON OUR PARTICIPATING DEALERS TO PROMOTE OUR BRAND VALUE BY
PROVIDING HIGH QUALITY SERVICES TO OUR CONSUMERS. IF DEALERS DO NOT PROVIDE OUR
CONSUMERS HIGH QUALITY SERVICES, OUR BRAND VALUE WILL DIMINISH AND THE NUMBER OF
CONSUMERS WHO USE OUR SERVICES MAY DECLINE CAUSING A DECREASE IN OUR REVENUES.
Promotion of our brand value depends on our ability to provide consumers
a high quality experience for purchasing vehicles throughout the purchasing
process. If our dealers do not provide consumers with high quality service, the
value of our brand could be damaged and the number of consumers using our
services may decrease. We devote significant efforts to train participating
dealerships in practices that are intended to increase consumer satisfaction.
Our inability to train dealers effectively, or the failure by participating
dealers to adopt recommended practices, respond rapidly and professionally to
vehicle inquiries, or sell and lease vehicles in accordance with our marketing
strategies, could result in low consumer satisfaction, damage our brand name and
could materially and adversely affect our business, results of operations and
financial condition.
OUR QUARTERLY FINANCIAL RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS WHICH
MAY MAKE IT DIFFICULT FOR INVESTORS TO PREDICT OUR FUTURE PERFORMANCE.
Our quarterly operating results may fluctuate due to many factors. Our
expense levels are based in part on our expectations of future revenues which
may vary significantly. We plan our business operations based on increased
revenues and if our revenues do not increase faster than our expenses, our
business, results of operations and financial condition will be materially and
adversely affected. Other factors that may adversely affect our quarterly
operating results include:
- our ability to retain existing dealers, attract new dealers and
maintain dealer and customer satisfaction,
- the announcement or introduction of new or enhanced sites, services
and products by us or our competitors,
- general economic conditions and economic conditions specific to the
Internet, online commerce or the automobile industry,
- a decline in the usage levels of online services and consumer
acceptance of the Internet and commercial online services for the
purchase of consumer products and services such as those offered by
us,
- our ability to upgrade and develop our systems and infrastructure
and to attract new personnel in a timely and effective manner,
- the level of traffic on our Web site and other sites that refer
traffic to our Web site,
- technical difficulties, system downtime or Internet brownouts,
- the amount and timing of operating costs and capital expenditures
relating to expansion of our business, operations and
infrastructure,
- governmental regulation, and
- unforeseen events affecting the industry.
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SEASONALITY IS LIKELY TO CAUSE FLUCTUATIONS IN OUR OPERATING RESULTS. INVESTORS
MAY NOT BE ABLE TO PREDICT OUR ANNUAL OPERATING RESULTS BASED ON A QUARTER TO
QUARTER COMPARISON OF OUR OPERATING RESULTS.
To date, our quarter to quarter growth in revenues have offset any
effects due to seasonality. However, we expect our business to experience
seasonality as it matures. If this occurs, investors may not be able to predict
our annual operating results based on a quarter to quarter comparison of our
operating results. Seasonality in the automotive industry, Internet and
commercial online service usage and advertising expenditures is likely to cause
fluctuations in our operating results and could have a material adverse effect
on our business, operating results and financial condition. We anticipate that
purchase requests will typically increase during the first and third quarters
when new vehicle models are introduced and will typically decline during the
second and fourth quarters. Internet and commercial online service usage and the
growth rate of such usage typically declines during the summer.
INTENSE COMPETITION COULD REDUCE OUR MARKET SHARE AND HARM OUR FINANCIAL
PERFORMANCE. OUR MARKET IS COMPETITIVE NOT ONLY BECAUSE THE INTERNET HAS MINIMAL
BARRIERS TO ENTRY, BUT ALSO BECAUSE WE COMPETE DIRECTLY WITH OTHER COMPANIES IN
THE OFFLINE ENVIRONMENT.
Our vehicle purchasing services compete against a variety of Internet
and traditional vehicle purchasing services and automotive brokers. Therefore,
we are affected by the competitive factors faced by both Internet commerce
companies as well as traditional, offline companies within the automotive and
automotive-related industries. The market for Internet-based commercial services
is new, and competition among commercial Web sites is expected to increase
significantly in the future. Our business is characterized by minimal barriers
to entry, and new competitors can launch a competitive service at relatively low
cost. To compete successfully as an Internet-based commercial entity, we must
significantly increase awareness of our services and brand name. Failure to
achieve these objectives will cause our revenues to decline and would have a
material adverse effect on our business, results of operations and financial
condition.
We compete with other entities which maintain similar commercial Web
sites including Autoweb.com, Cendant Membership Service, Inc.'s AutoVantage,
Microsoft Corporation's Carpoint and Stoneage Corporation. Republic Industries,
Inc., a large consolidator of dealers, has announced its intention to launch a
Web site for marketing vehicles. We also compete indirectly against vehicle
brokerage firms and affinity programs offered by several companies, including
Costco Wholesale Corporation and Wal-Mart Stores, Inc. In addition, all major
vehicle manufacturers have their own Web sites and many have recently launched
or announced plans to launch online buying services, such as General Motors
Corporation's BuyPower. We also compete with vehicle insurers, lenders and
lessors as well as other dealers that are not part of our network. Such
companies may already maintain or may introduce Web sites which compete with
ours.
We believe that the principal competitive factors in the online market
are:
- brand recognition,
- speed and quality of fulfillment,
- variety of value-added services,
- ease of use,
- customer satisfaction,
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- quality of service, and
- technical expertise.
We cannot assure that we can compete successfully against current or
future competitors, many of which have substantially more capital, existing
brand recognition, resources and access to additional financing. In addition,
competitive pressures may result in increased marketing costs, decreased Web
site traffic or loss of market share or otherwise may materially and adversely
affect our business, results of operations and financial condition.
IF ANY OF OUR RELATIONSHIPS WITH INTERNET SEARCH ENGINES OR ONLINE AUTOMOTIVE
INFORMATION PROVIDERS TERMINATES, OUR PURCHASE REQUEST VOLUME COULD DECLINE. IF
OUR PURCHASE REQUEST VOLUME DECLINES, OUR PARTICIPATING DEALERS MAY NOT BE
SATISFIED WITH OUR SERVICES AND MAY TERMINATE THEIR RELATIONSHIP WITH US OR
FORCE US TO DECREASE THE FEES WE CHARGE FOR OUR SERVICE. IF THIS OCCURS, OUR
REVENUES WOULD DECREASE.
We depend on a number of strategic relationships to direct a substantial
amount of purchase requests and traffic to our Web site. The termination of any
of these relationships or any significant reduction in traffic to Web sites on
which our services are advertised or offered, or the failure to develop
additional referral sources, would cause our purchase request volume to decline.
Since our dealers would be receiving fewer purchase requests, they may no longer
be satisfied with our service and may terminate their relationships with us or
force us to decrease the fees we charge for our services. If our dealers
terminate their relationship with us or force us to decrease the fees we charge
for our services, our revenues will decline which will have a material adverse
effect on our business, results of operations and financial condition. We
receive a significant number of purchase requests through a limited number of
Internet search engines, such as Excite, and online automotive information
providers, such as Edmund's and Kelley Blue Book. For example, in 1997 and 1998,
approximately 49% and 34%, respectively, of our purchase requests came through
Edmund's. We may not be able to maintain our relationship with Edmund's or other
online service providers or find alternative, comparable marketing partners
capable of originating significant numbers of purchase requests on terms
satisfactory to us. In addition, we periodically negotiate revisions to existing
agreements and these revisions could increase our costs in future periods. A
number of our agreements with online service providers may be terminated without
cause. Also, our agreement with Excite relating to our sponsorship of Netscape
Communications Corporation's NetCenter Auto Channel is conditioned on Excite's
NetCenter agreement with Netscape remaining in effect. The NetCenter agreement
between Excite and Netscape can be terminated in the event of a change in
control which may be triggered by America Online's acquisition of Netscape.
IF WE CAN NOT BUILD STRONG BRAND LOYALTY OUR BUSINESS MAY SUFFER.
We believe that the importance of brand recognition will increase as
more companies engage in commerce over the Internet. Development and awareness
of the Autobytel.com brand will depend largely on our ability to obtain a
leadership position in Internet commerce. If dealers do not perceive us as an
effective channel for increasing vehicle sales, or consumers do not perceive us
as offering reliable information concerning new and pre-owned vehicles, as well
as referrals to high quality dealers, in a user-friendly manner that reduces the
time spent for vehicle purchases, we will be unsuccessful in promoting and
maintaining our brand. Our brand may not be able to gain widespread acceptance
among consumers or dealers. Our failure to develop our brand sufficiently would
have a material adverse effect on our business, results of operations and
financial condition.
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IF WE LOSE OUR KEY PERSONNEL OR ARE UNABLE TO ATTRACT, TRAIN AND RETAIN
ADDITIONAL HIGHLY QUALIFIED SALES AND MARKETING, MANAGERIAL AND TECHNICAL
PERSONNEL, OUR BUSINESS MAY SUFFER.
Our future success depends on our ability to identify, hire, train and
retain highly qualified sales and marketing, managerial and technical personnel.
In addition, as we introduce new services we will need to hire a significant
number of personnel. Competition for such personnel is intense, and we may not
be able to attract, assimilate or retain such personnel in the future. The
inability to attract and retain the necessary managerial, technical and sales
and marketing personnel could have a material adverse effect on our business,
results of operations and financial condition.
Our business and operations are substantially dependent on the
performance of our executive officers and key employees, some of whom are
employed on an at-will basis and all of whom have worked together for only a
short period of time. We maintain "key person" life insurance in the amount of
$3.0 million on the life of Mark W. Lorimer, our Chief Executive Officer and
President. The loss of the services of Mr. Lorimer or Ann Marie Delligatta,
Executive Vice President and Chief Operating Officer, or one or more of our
other executive officers or key employees could have a material adverse effect
on our business, results of operations and financial condition.
WE ARE A NEW BUSINESS IN A NEW INDUSTRY AND NEED TO MANAGE OUR GROWTH AND OUR
ENTRY INTO NEW BUSINESS AREAS IN ORDER TO AVOID INCREASED EXPENSES WITHOUT
CORRESPONDING REVENUES.
We are constantly expanding our operations and introducing new services
to consumers and dealers in order to establish ourselves as a leader in the
evolving market for Internet-based vehicle purchasing services. We also intend
to enter into new foreign markets. The growth of our operations requires us to
increase expenditures before we generate revenues. For example, we need to hire
personnel to oversee the introduction of new services before we generate revenue
from these services. Our inability to generate satisfactory revenues from such
expanded services to offset costs could have a material adverse effect on our
business, financial condition and results of operations. As of December 31,
1998, we had 180 employees, compared to 159 employees as of December 31, 1997,
and 73 employees as of December 31, 1996.
We believe establishing industry leadership also requires us to:
- test, introduce and develop new services and products, including
enhancing our Web site,
- expand the breadth of products and services offered,
- expand our market presence through relationships with third parties,
and
- acquire new or complementary businesses, products or technologies.
We cannot assure you that we can successfully manage these tasks.
IF FEDERAL OR STATE FRANCHISE LAWS APPLY TO US WE MAY BE REQUIRED TO MODIFY OR
ELIMINATE OUR MARKETING PROGRAMS. IF WE ARE UNABLE TO MARKET OUR SERVICES IN THE
MANNER WE CURRENTLY DO OUR REVENUES MAY DECREASE AND OUR BUSINESS MAY SUFFER.
We believe that neither our relationship with our dealers nor our dealer
subscription agreements constitute "franchises" under federal or state franchise
laws and that we are not subject to the coverage of state and motor vehicle
dealer licensing laws. However, in the event that any state's regulatory
requirements relating to franchises or our method of business impose additional
requirements on us or
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include us within an industry-specific regulatory scheme, we may be required to
modify our marketing programs in such states in a manner which undermines the
program's attractiveness to consumers or dealers, we may become subject to fines
or other penalties or if we determine that the licensing and related
requirements are overly burdensome, we may elect to terminate operations in such
state. In each case, our revenues may decline and our business, results of
operations and financial condition could be materially and adversely affected.
A Federal district court in Michigan has ruled that our dealer
subscription agreement is not a "franchise" under Michigan law. However, if our
relationship or written agreement with our dealers were found to be a
"franchise" under federal or state franchise laws, then we could be subjected to
other regulations, such as franchise disclosure and registration requirements
and limitations on our ability to effect changes in our relationships without
our dealers. We also believe that our dealer marketing service does not qualify
as an automobile brokerage activity and therefore state broker licensing
requirements do not apply to us. In response to Texas Department of
Transportation concerns, we modified our marketing program in that state to
include a pricing model under which all subscribing dealerships in Texas are
charged uniform fees based on the population density of their particular
geographic area and to make our program open to all dealerships who wish to
apply.
IF FINANCIAL BROKER AND INSURANCE LICENSING REQUIREMENTS APPLY TO US IN STATES
WHERE WE ARE NOT CURRENTLY LICENSED, WE WILL BE REQUIRED TO OBTAIN ADDITIONAL
LICENSES AND OUR BUSINESS MAY SUFFER.
We currently hold financial broker licenses in the states of Florida,
Indiana, Rhode Island and Wisconsin and have applied for renewals in the states
of California and Colorado. If we are required to be licensed elsewhere, it may
result in an expensive and time-consuming process that could divert the effort
of management away from day-to-day operations. In the event other states require
us to be licensed and we are unable to do so, or are otherwise unable to comply
with regulations required by changes in current operations or the introduction
of new services, we could be subject to fines or other penalties, and our
business, results of operations and financial condition could be materially and
adversely affected.
We provide a link on our Web site to an online insurance application
program offered by the American International Group. We receive fees from a
member company of the American International Group in connection with this
advertising activity. We do not believe that this activity requires us to be
licensed under state insurance laws. The use of the Internet in the marketing of
insurance products, however, is a relatively new practice. It is not clear
whether or to what extent state insurance licensing laws apply to activities
similar to ours. Given these uncertainties, we currently hold, through a
wholly-owned subsidiary, insurance agent licenses in California, Indiana,
Nebraska, New Jersey, and Utah. We have applied for insurance agent licenses in
the remaining thirty-two states that issue corporate licensing and are awaiting
approval. In the event other states require us to be licensed and we are unable
to do so, or are otherwise unable to comply with regulations required by changes
in current operations or the introduction of new services, we could be subject
to fines or other penalties, and our business, results of operations and
financial condition could be materially and adversely affected.
INTERNET COMMERCE HAS YET TO ATTRACT SIGNIFICANT REGULATION. GOVERNMENT
REGULATIONS MAY RESULT IN ADMINISTRATIVE MONETARY FINES, PENALTIES OR TAXES THAT
MAY REDUCE OUR FUTURE EARNINGS.
There are currently few laws or regulations that apply directly to the
Internet. Because our business is dependent on the Internet, the adoption of new
local, state, national or international laws or regulations may decrease the
growth of Internet usage or the acceptance of Internet commerce which could, in
turn, decrease the demand for our services and increase our costs or otherwise
have a material adverse effect on our business, results of operations and
financial condition.
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Tax authorities in a number of states are currently reviewing the
appropriate tax treatment of companies engaged in Internet commerce. New state
tax regulations may subject us to additional state sales, use and income taxes.
EVOLVING GOVERNMENT REGULATIONS MAY REQUIRE FUTURE LICENSING WHICH COULD
INCREASE ADMINISTRATIVE COSTS OR ADVERSELY AFFECT OUR REVENUES.
In a regulatory climate that is uncertain, our operations may be subject
to direct and indirect adoption, expansion or reinterpretation of various
domestic and foreign laws and regulations. Compliance with these future laws and
regulations may require us to obtain appropriate licenses at an undeterminable
and possibly significant initial monetary and annual expense. These additional
monetary expenditures may increase future overhead, thereby potentially reducing
our future results of operations.
We have identified what we believe are the areas of domestic government
regulation, which if changed, would be costly to us. These laws and regulations
include franchise laws, motor vehicle brokerage licensing laws, insurance
licensing laws, and motor vehicle dealership licensing laws, which may be
applicable to aspects of our business. There could be laws and regulations
applicable to our business which we have not identified or which, if changed,
may be costly to us.
The introduction of new services and expansion of our operations to
foreign countries may require us to comply with additional, yet undetermined,
laws and regulations. Compliance may require obtaining appropriate business
licenses, filing of bonds, appointment of foreign agents and periodic business
reporting activity. The failure to adequately comply with these future laws and
regulations may delay or possibly prevent some of our products or services from
being offered in a particular foreign country, thereby having an adverse affect
on our results of operations.
OUR SUCCESS IS DEPENDENT ON OUR KEEPING PACE WITH ADVANCES IN TECHNOLOGY. IF WE
ARE UNABLE TO KEEP PACE WITH ADVANCES IN TECHNOLOGY, CONSUMERS MAY STOP USING
OUR SERVICES AND OUR REVENUES WILL DECREASE.
The Internet and electronic commerce markets are characterized by rapid
technological change, changes in user and customer requirements, frequent new
service and product introductions embodying new technologies and the emergence
of new industry standards and practices that could render our existing Web site
and technology obsolete. If we are unable to adapt to changing technologies, our
business, results of operations and financial condition could be materially and
adversely affected. Our performance will depend, in part, on our ability to
continue to enhance our existing services, develop new technology that addresses
the increasingly sophisticated and varied needs of our prospective customers,
license leading technologies and respond to technological advances and emerging
industry standards and practices on a timely and cost-effective basis. The
development of our Web site, Dealer Real Time system and other proprietary
technology entails significant technical and business risks. We may not be
successful in using new technologies effectively or adapting our Web site,
Dealer Real Time system, or other proprietary technology to customer
requirements or to emerging industry standards.
WE ARE VULNERABLE TO COMMUNICATIONS SYSTEM INTERRUPTIONS BECAUSE ALL OF OUR
PRIMARY SERVERS ARE LOCATED IN A SINGLE LOCATION. IF COMMUNICATIONS TO THAT
LOCATION WERE INTERRUPTED, OUR OPERATIONS COULD BE ADVERSELY AFFECTED.
We host our Web site and Dealer Real Time system at our corporate
headquarters in Irvine, California. Although we maintain redundant local offsite
backup servers, all of our primary servers are located at our corporate
headquarters and are vulnerable to interruption by damage from fire, earthquake,
flood, power loss, telecommunications failure, break-ins and other events beyond
our control. In the
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event that we experience significant system disruptions, our business, results
of operations and financial condition would be materially and adversely
affected. We have, from time to time, experienced periodic systems interruptions
and anticipate that such interruptions will occur in the future. We maintain
business interruption insurance which pays up to $6 million for the actual loss
of business income sustained due to the suspension of operations as a result of
direct physical loss of or damage to property at our offices. However, in the
event of a prolonged interruption, this business interruption insurance may not
be sufficient to fully compensate us for the resulting losses.
INTERNET COMMERCE IS NEW AND EVOLVING WITH FEW PROFITABLE BUSINESS MODELS. WE
CANNOT ASSURE THAT OUR BUSINESS MODEL WILL BE PROFITABLE.
The market for Internet-based purchasing services has only recently
begun to develop and is rapidly evolving. While many Internet commerce companies
have grown in terms of revenue, few are profitable. We can not assure that we
will be profitable. As is typical for a new and rapidly evolving industry,
demand and market acceptance for recently introduced services and products over
the Internet are subject to a high level of uncertainty and there are few proven
services and products. Moreover, since the market for our services is new and
evolving, it is difficult to predict the future growth rate, if any, and size of
this market.
IF CONSUMERS DO NOT ADOPT INTERNET COMMERCE AS A MAINSTREAM MEDIUM OF COMMERCE,
OUR REVENUES MAY NOT GROW AND OUR EARNINGS MAY SUFFER.
The success of our services will depend upon the adoption of the
Internet by consumers and dealers as a mainstream medium for commerce. While we
believe that our services offer significant advantages to consumers and dealers,
there can be no assurance that widespread acceptance of Internet commerce in
general, or of our services in particular, will occur. Our success assumes that
consumers and dealers who have historically relied upon traditional means of
commerce to purchase or lease vehicles, and to procure vehicle financing and
insurance, will accept new methods of conducting business and exchanging
information. In addition, dealers must be persuaded to adopt new selling models
and be trained to use and invest in developing technologies. Moreover, critical
issues concerning the commercial use of the Internet, such as, ease of access,
security, reliability, cost, and quality of service, remain unresolved and may
impact the growth of Internet use. If the market for Internet-based vehicle
marketing services fails to develop, develops slower than expected or becomes
saturated with competitors, or if our services do not achieve market acceptance,
our business, results of operations and financial condition will be materially
and adversely affected.
THE PUBLIC MARKET FOR OUR COMMON STOCK MAY CONTINUE TO BE VOLATILE, ESPECIALLY
SINCE MARKET PRICES FOR INTERNET-RELATED AND TECHNOLOGY STOCKS HAVE OFTEN BEEN
UNRELATED TO OPERATING PERFORMANCE.
Prior to the initial public offering of our common stock in March 1999,
there was no public market for our common stock. We cannot assure that an active
trading market will be sustained or that the market price of the common stock
will not decline. Even if an active trading market does develop, the market
price of the common stock is likely to continue to be highly volatile and could
be subject to wide fluctuations in response to factors such as:
- actual or anticipated variations in our quarterly operating results,
- announcements of new product or service offerings,
- technological innovations,
- competitive developments,
- changes in financial estimates by securities analysts,
- conditions and trends in the Internet and electronic commerce
industries,
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<PAGE> 13
- adoption of new accounting standards affecting the automotive
industry, and
- general market conditions and other factors.
Further, the stock markets, and in particular the Nasdaq National
Market, have experienced extreme price and volume fluctuations that have
particularly affected the market prices of equity securities of many technology
companies and have often been unrelated or disproportionate to the operating
performance of such companies. The trading prices of many technology companies'
stocks are at or near historical highs. We cannot assure that such high trading
prices will be sustained. These broad market factors may adversely affect the
market price of our common stock. In addition, general economic, political and
market conditions such as recessions, interest rates or international currency
fluctuations, may adversely affect the market price of the common stock. In the
past, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted against
companies with publicly traded securities. Such litigation, if instituted, could
result in substantial costs and a diversion of management's attention and
resources, which would have a material adverse effect on our business, results
of operations and financial condition.
WE FACE UNCERTAINTIES WITH CHANGING LEGISLATION IN THE AUTOMOTIVE INDUSTRY WHICH
COULD REQUIRE INCREASED REGULATORY AND LOBBYING COSTS AND MAY HARM OUR BUSINESS.
Our purchasing service may result in changing the way vehicles are sold
which may be viewed as threatening by new and pre-owned vehicle dealers who do
not subscribe to the Autobytel.com program. Such businesses are often
represented by influential lobbying organizations, and such organizations or
other persons may propose legislation which could impact the evolving marketing
and distribution model which our service promotes. Should current laws be
changed or new laws passed, our business, results of operations and financial
condition could be materially and adversely affected. As we introduce new
services, we may need to comply with additional licensing regulations and
regulatory requirements.
To date, we have not spent significant resources on lobbying or related
government affairs issues but we may need to do so in the future. A significant
increase in the amount we spend on lobbying or related activities would have a
material adverse effect on our results of operations and financial condition.
OUR INTERNATIONAL EXPANSION MAY REQUIRE US TO COMPLY WITH BURDENSOME REGULATORY,
TARIFF AND LICENSING REQUIREMENTS. OUR NEED TO COMPLY WITH BURDENSOME
GOVERNMENTAL REQUIREMENTS MAY ADVERSELY AFFECT OUR ABILITY TO GROW OUR BUSINESS.
We intend to expand our new vehicle purchasing service to foreign
markets through licensing our technology, business processes and trade names and
by establishing relationships with vehicle dealers and strategic partners
located in foreign markets.
By expanding our operations to various other countries, we may become
subject to laws or treaties that regulate the marketing, distribution and sale
of motor vehicles. We will need to spend our resources to determine whether the
laws of the countries in which we seek to operate require us to modify, or
prohibit the use of, our Autobytel.com system. In addition, the laws of other
countries may impose licensing, bonding or similar requirements on us as a
condition to doing business in these countries.
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WE HAVE LIMITED EXPERIENCE IN PROVIDING OUR INTERNET-BASED MARKETING SERVICE
ABROAD. WE MAY NOT BE SUCCESSFUL IN ESTABLISHING OUR BUSINESS ABROAD WHICH MAY
LIMIT OUR FUTURE GROWTH.
We have had limited experience in providing our Internet-based marketing
service abroad and we cannot be certain that we will be successful in
introducing or marketing our services abroad. In addition, there are risks
inherent in conducting business in international markets, such as:
- changes in political conditions,
- regulatory requirements,
- potentially weaker intellectual property protections,
- tariffs and other trade barriers, fluctuations in currency exchange
rates, or potentially adverse tax consequences,
- difficulties in managing or overseeing foreign operations, and
- educating consumers and dealers who may be unfamiliar with the
benefits of online marketing and commerce.
One or more of such factors may have a material adverse effect on our current or
future international operations and, consequently, on our business, results of
operations and financial condition.
OUR COMPUTER INFRASTRUCTURE MAY BE VULNERABLE TO SECURITY BREACHES. ANY SUCH
PROBLEMS COULD JEOPARDIZE CONFIDENTIAL INFORMATION TRANSMITTED OVER THE
INTERNET, CAUSE INTERRUPTIONS IN OUR OPERATIONS OR CAUSE US TO HAVE LIABILITY TO
THIRD PERSONS.
Our computer infrastructure is potentially vulnerable to physical or
electronic computer break-ins, viruses and similar disruptive problems and
security breaches. Any such problems or security breach could cause us to have
liability to one or more third parties and disrupt all or part of our
operations. Any of these events would have a material adverse effect on our
business, results of operations and financial condition. A party who is able to
circumvent our security measures could misappropriate proprietary information,
jeopardize the confidential nature of information transmitted over the Internet
or cause interruptions in our operations. Concerns over the security of Internet
transactions and the privacy of users could also inhibit the growth of the
Internet in general, particularly as a means of conducting commercial
transactions. To the extent that our activities or those of third party
contractors involve the storage and transmission of proprietary information such
as personal financial information, security breaches could expose us to a risk
of financial loss, litigation and other liabilities. Our insurance does not
currently protect against such losses.
WE DEPEND ON CONTINUED TECHNOLOGICAL IMPROVEMENTS IN OUR SYSTEMS AND IN THE
INTERNET OVERALL. IF WE ARE UNABLE TO HANDLE AN UNEXPECTEDLY LARGE INCREASE IN
VOLUME OF CONSUMERS USING OUR WEB SITE, WE CANNOT ASSURE OUR CONSUMERS OR
DEALERS THAT PURCHASE REQUESTS WILL BE EFFICIENTLY PROCESSED AND OUR BUSINESS
MAY SUFFER.
If the Internet continues to experience significant growth in the number
of users and the level of use, then the Internet infrastructure may not be able
to continue to support the demands placed on it by such potential growth. The
Internet may not prove to be a viable commercial medium because of inadequate
development of the necessary infrastructure, timely development of complementary
products
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<PAGE> 15
such as high speed modems, delays in the development or adoption of new
standards and protocols required to handle increased levels of Internet activity
or increased government regulation.
An unexpectedly large increase in the volume or pace of traffic on our
Web site or the number of orders placed by customers may require us to expand
and further upgrade our technology, transaction-processing systems and network
infrastructure. We may not be able to accurately project the rate or timing of
increases, if any, in the use of our Web site or expand and upgrade our systems
and infrastructure to accommodate such increases. In addition, we cannot assure
that our dealers will efficiently process purchase requests.
OUR BUSINESS COULD BE INTERRUPTED BY YEAR 2000 PROBLEMS IF OUR VENDORS,
CONSUMERS OR DEALERS ARE UNABLE TO CONVERT THEIR SYSTEMS. THEIR FAILURE TO
CONVERT THEIR SYSTEMS MAY AFFECT THE ABILITY OF OUR CONSUMERS AND DEALERS TO
ACCESS OUR WEB SITE OR THE DEALER REAL TIME SYSTEM. OUR BUSINESS WOULD SUFFER IF
SUCH FAILURE PREVENTED ACCESS TO OUR ONLINE SYSTEMS.
Because many computer applications have been written using two digits
rather than four to define the applicable year, date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
"Year 2000 issue" could result in system failures or miscalculations causing
disruptions of operations, including disruptions of our Web site, the Dealer
Real Time system or normal business activities.
We cannot predict the extent to which the Year 2000 issue will affect
our vendors, consumers or dealers, or the extent to which we would be vulnerable
if such parties fail to resolve any Year 2000 issues on a timely basis. The
failure of such parties to convert their systems on a timely basis or effect a
conversion that is compatible with our systems in order to avoid any Year 2000
issues could have a material adverse effect on us. In addition, to the extent
our customers are unable to access our Web site or dealers are unable to access
the Dealer Real Time system, such failures would have a material adverse effect
on our business, results of operations, or financial condition.
The worst-case scenario related to the Year 2000 issue would be an
overall failure of the national Internet and telecommunications infrastructure.
If this failure were to prevent users and dealers from accessing the Internet,
we would attempt to provide alternative means to allow users to connect to our
servers. Any national disruption to the telecommunications systems used by our
business will have a material adverse effect on our business, results of
operations, or financial condition.
MISAPPROPRIATION OF OUR INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS COULD
IMPAIR OUR COMPETITIVE POSITION.
Our ability to compete depends upon our proprietary systems and
technology. While we rely on trademark, trade secret and copyright law,
confidentiality agreements and technical measures to protect our proprietary
rights, we believe that the technical and creative skills of our personnel,
continued development of our proprietary systems and technology, brand name
recognition and reliable Web site maintenance are more essential in establishing
and maintaining a leadership position and strengthening our brand. Despite our
efforts to protect our proprietary rights, unauthorized parties may attempt to
copy aspects of our services or to obtain and use information that we regard as
proprietary. Policing unauthorized use of our proprietary rights is difficult.
We cannot assure that the steps taken by us will prevent misappropriation of
technology or that the agreements entered into for that purpose will be
enforceable. Misappropriation of our intellectual property or potential
litigation would have a material adverse effect on our business, results of
operations and financial condition. Effective trademark, service mark, copyright
and trade secret protection may not be available in every country in which our
products and services are made available online. In addition, litigation may be
necessary in the future to enforce
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<PAGE> 16
or protect our intellectual property rights or to defend against claims or
infringement or invalidity. As part of our confidentiality procedures, we
generally enter into agreements with our employees and consultants and limit
access to our trade secrets and technology.
OUR FOUNDERS, OFFICERS AND DIRECTORS AND THEIR AFFILIATES HAVE SUBSTANTIAL
CONTROL OF OUR VOTING STOCK AND HAVE THE ABILITY TO MAKE DECISIONS THAT COULD
ADVERSELY AFFECT STOCKHOLDERS. SUCH DECISIONS COULD ADVERSELY AFFECT OUR STOCK
PRICE.
The control of a large amount of our stock by insiders could have an
adverse effect on the market price of our common stock. Our executive officers
and directors beneficially own or control approximately 6,174,352 shares or 31%
of the outstanding shares of our common stock. In addition, our founders, Peter
Ellis and John Bedrosian beneficially own or control approximately 17% and 15%,
respectively, of the outstanding shares of our common stock. Our officers,
directors, founders and their affiliates, assuming they vote together, have the
ability to control the election of our board of directors and the outcome of
corporate actions requiring stockholder approval, including mergers and other
changes of corporate control, going private transactions and other extraordinary
transactions.
SUBSTANTIAL SALES OR THE PERCEPTION OF FUTURE SALES OF OUR COMMON STOCK MAY
DEPRESS OUR STOCK PRICE. SINCE THE MARKET PRICES FOR INTERNET-RELATED STOCKS ARE
LIKELY TO REMAIN VOLATILE, OUR STOCK PRICE MAY BE MORE ADVERSELY AFFECTED THAN
OTHER COMPANIES BY SUCH FUTURE SALES.
Sale of substantial numbers of shares of common stock in the public
market could adversely affect the market price of our common stock and make it
more difficult for us to raise funds through equity offerings in the future. A
substantial number of outstanding shares of common stock and shares of common
stock issuable upon exercise of outstanding stock options will become available
for resale in the public market at prescribed times. Of the 17,874,502 shares
that were outstanding as of April 30, 1999, 4,877,560 shares are eligible for
sale in the public market without restriction. 7,122,481 shares of common stock
are currently restricted until September 26, 1999 under lock-up agreements with
the underwriters for our initial public offering, and another 5,808,977 shares
are restricted until December 26, 1999 under lock-up agreements with these same
underwriters. Upon the expiration of these lock-up agreements, such shares of
common stock will become eligible for sale in the public market in accordance
with the provisions of Rules 144 and 701 under the Securities Act and any
contractual restrictions on their transfer, as applicable. BT Alex. Brown
Incorporated may, in its sole discretion and at any time without notice, release
all or any portion of the shares subject to lock-up agreements. In addition,
holders of approximately 12,997,957 shares of common stock are entitled to
certain registration rights with respect to such shares until such time as the
holders of such common stock may sell such shares under Rule 144 of the
Securities Act.
WE ARE UNCERTAIN OF OUR ABILITY TO OBTAIN ADDITIONAL FINANCING FOR OUR FUTURE
CAPITAL NEEDS. IF WE ARE UNABLE TO OBTAIN ADDITIONAL FINANCING WE MAY NOT BE
ABLE TO CONTINUE TO OPERATE OUR BUSINESS.
We currently anticipate that our cash, cash equivalents and short-term
investments will be sufficient to meet our anticipated needs for working capital
and other cash requirements until at least March 31, 2000. We may need to raise
additional funds sooner, however, in order to fund more rapid expansion, to
develop new or enhance existing services or products, to respond to competitive
pressures or to acquire complementary products, businesses or technologies.
There can be no assurance that additional financing will be available on terms
favorable to us, 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 potential acquisition opportunities, develop or enhance services or products
or respond to competitive pressures would be significantly limited. Such
limitation could have a material adverse effect on our business, results of
operations, financial condition and prospects.
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OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND DELAWARE LAW CONTAIN PROVISIONS
THAT COULD DISCOURAGE A THIRD PARTY FROM ACQUIRING US OR LIMIT THE PRICE THIRD
PARTIES ARE WILLING TO PAY FOR OUR STOCK.
Provisions of our amended and restated certificate of incorporation and
bylaws relating to our corporate governance could make it difficult for a third
party to acquire us, and could discourage a third party from attempting to
acquire control of us. These provisions allow us to issue preferred stock with
rights senior to those of the common stock without any further vote or action by
the stockholders. These provisions provide that the board of directors is
divided into three classes, which may have the effect of delaying or preventing
changes in control or change in our management because less than a majority of
the board of directors are up for election at each annual meeting. In addition,
these provisions impose various procedural and other requirements which could
make it more difficult for stockholders to effect corporate actions such as a
merger, asset sale or other change of control of us. Such charter provisions
could limit the price that certain investors might be willing to pay in the
future for shares of our common stock and may have the effect of delaying or
preventing a change in control. The issuance of preferred stock also could
decrease the amount of earnings and assets available for distribution to the
holders of common stock or could adversely affect the rights and powers,
including voting rights, of the holders of the common stock.
We are also subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law. In general, the statute prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. For purposes of Section
203, a "business combination" includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder, and an
"interested stockholder" is a person who, together with affiliates and
associates, owns or did own 15% or more of the corporation's voting stock.
OUR ACTUAL RESULTS COULD DIFFER FROM FORWARD-LOOKING STATEMENTS IN THIS
PROSPECTUS.
This prospectus contains forward-looking statements based on current
expectations which involve risks and uncertainties. Our actual results could
differ materially from those anticipated in these forward-looking statements as
a result of many factors, including the risk factors set forth above and
elsewhere in this prospectus. The cautionary statements made in this prospectus
should be read as being applicable to all forward-looking statements wherever
they appear in this prospectus.
AUTOBYTEL.COM
OVERVIEW
We are a leading, branded Internet site for new and pre-owned vehicle
information and purchasing services. Through our Web site, www.autobytel.com,
consumers can research pricing, specifications and other information regarding
new and pre-owned vehicles. When consumers indicate they are ready to buy, they
can be connected to Autobytel.com's network of over 2,700 dealers in North
America, with each dealer representing a franchise for a particular vehicle
make. Dealers participate in our network by entering into non-exclusive
contracts with us. We expect our dealers to provide a haggle-free, competitive
offer. We provide our services free of charge to consumers and derive
substantially all of our revenues from fees paid by participating dealers.
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We believe our services benefit both consumers and participating dealers
in the following ways:
- we supply consumers with information they can use to make an
informed and intelligent vehicle purchasing decision,
- we provide consumers a convenient buying experience,
- we provide consumers access to a broad range of related services
such as insurance, financing and leasing through our Web site,
- we reduce our participating dealers' costs by directing to them
large volumes of potential automotive buyers, and
- we train our dealers to appropriately deal with knowledgeable
Internet consumers.
We introduced our new vehicle purchasing services in May 1995 and our
Certified Pre-Owned CyberStore program in April 1997. Our new vehicle purchasing
service enables consumers to shop for and select a new vehicle through our Web
site by providing research on new vehicles such as pricing, features,
specifications and colors. When consumers indicate they are ready to buy, they
can complete a purchase request online. A purchase request is an online inquiry
a consumer makes to receive a price quote for a specific vehicle from one of the
dealers in our network. The CyberStore allows consumers to search for a
pre-owned vehicle according to the price, make, model, color, year and location
of the vehicle. The CyberStore locates and displays the descriptions, locations
and actual photographs of all vehicles that satisfy the consumer's search
parameters.
According to CNW Marketing/Research, an independent research
organization, United States consumers spent over $657 and $667 billion on new
and pre-owned vehicles representing the sale of over 60.0 and 60.3 million
vehicles in 1997 and 1998, respectively. Although automotive retailing attracts
significant consumer dollars, we believe that consumers associate the
traditional vehicle buying experience with high-pressure sales tactics. In the
United States, new vehicles are traditionally sold through face-to-face,
negotiated transactions at approximately 49,000 dealerships franchised by
manufacturers. Approximately 40% of pre-owned vehicles are also sold through
these dealerships. Our company was founded with the objective of significantly
improving the purchasing process for consumers and dealers.
From inception through March 31, 1999, we have successfully expanded our
dealer network to over 2,700 dealers and have directed approximately 2.5 million
purchase requests to our dealer network. During 1998, we directed over 1.3
million purchase requests to our dealers. The dealers in our network use our
online information platform, the Dealer Real Time system. The Dealer Real Time
system is an Internet-based communications platform that provides dealers with
immediate purchase request information, the ability to track customers and
purchase requests, and other value-added features, including automatic uploading
of pre-owned vehicle inventory into our database. We believe that the Dealer
Real Time system gives dealers a competitive advantage compared to delivering
purchase requests by fax.
We have developed strategic marketing, advertising, development and
distribution affiliations with other companies, including:
- Internet search engine providers, such as Excite, Inc.,
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- cable service providers, such as MediaOne Interactive Services,
Inc.,
- international automotive distributions, such as Inchcape Automotive
Limited and Bilia AB,
- Internet providers of vehicle pricing and specification information,
such as Edmund's Publications Corp., Kelley Blue Book, Pace
Publications, Inc. and IntelliChoice, Inc., and
- financing and insurance providers, such as Chase Manhattan
Automotive Finance Corporation, General Electric Capital Auto
Financial Services, Inc. and New Hampshire Insurance Corporation, a
member company of the American International Group.
We have entered into agreements with e-solutions, Inc., Intec, Inc. and
Trans Cosmos, Inc. to provide for the organization and establishment of a joint
venture in Japan and the license for the use of our name and systems.
Our executive officers and directors beneficially own or control
approximately 6,174,352 shares or 31% of the outstanding shares of our common
stock. In addition, our founders, Peter Ellis and John Bedrosian beneficially
own or control approximately 17% and 15%, respectively, of the outstanding
shares of our common stock.
We are a Delaware corporation incorporated on May 17, 1996. We were
previously formed in Delaware in January 1995 as a limited liability company
under the name Auto-By-Tel LLC. Our principal executive offices are located at
18872 MacArthur Boulevard, Irvine, California 92612-1400, and our telephone
number is (949) 255-4500. Our Web site is located at www.autobytel.com.
USE OF PROCEEDS
Autobytel.com will not receive any proceeds from the sale of shares
which may be sold pursuant to this prospectus for the respective accounts of the
Selling Securityholders. All such proceeds, net of brokerage commissions, if
any, will be received by the Selling Securityholders. See "Selling
Securityholders" and "Plan of Distribution."
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SELLING SECURITYHOLDERS
The following table sets forth information with respect to the
beneficial ownership of those Selling Securityholders who each own greater than
1,000 shares of common stock, issued under Autobytel.com's 1996 Stock Option
Plan and 1996 Stock Incentive Plan, based upon the corporate records of
Autobytel.com on May 5, 1999. In addition, this reoffer prospectus covers and
may be used by unnamed Selling Securityholders who individually hold less than
1,000 shares of common stock (4,601 shares in the aggregate) issued under
Autobytel.com's 1996 Stock Option Plan and 1996 Stock Incentive Plan. The
Selling Securityholders are not affiliates of Autobytel.com.
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT OF OUTSTANDING
OF COMMON COMMON
AMOUNT OF STOCK TO STOCK TO
COMMON STOCK AMOUNT OF BE OWNED IF BE OWNED IF
BENEFICIALLY COMMON STOCK ALL SHARES ALL SHARES
OWNED STOCK TO OFFERED OFFERED
PRIOR TO BE OFFERED HEREBY HEREBY
NAME OF SELLING STOCKHOLDER OFFERING HEREBY ARE SOLD ARE SOLD
- --------------------------- -------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C>
ALFONSO, DAVID 8,333 8,333 -- --
CHARETTE, NIKKI 1,111 1,111 -- --
CIRESA, TOM 158,071 158,071 -- --
DAVIS, DARREN 5,555 5,555 -- --
DITTEMORE, JIM 7,778 7,778 -- --
ELLSPERMANN, RANDY 55,555 55,555 -- --
FANG, JULIE 1,852 1,852 -- --
IORGULESCU, ANDREW 14,206 13,206 1,000 --
SIMMONDS, PAUL 1,852 1,852 -- --
SORRENTINO, TONY 5,555 5,555 -- --
WEBB, HOLLY 1,930 1,930 -- --
261,798 260,798 1,000 --
-------- -------- -------- --------
</TABLE>
PLAN OF DISTRIBUTION
Shares offered hereby may be sold from time to time directly by or on
behalf of the Selling Securityholder in one or more transactions on the Nasdaq
National Market or on any stock exchange on which the common stock may be listed
at the time of sale, in privately negotiated transactions, or through a
combination of such methods, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, at fixed prices (which may be
changed) or at negotiated prices. The Selling Securityholders may sell shares
through one or more agents, brokers or dealers or directly to purchasers. Such
brokers or dealers may receive compensation in the form of commissions,
discounts or concessions from the Selling Securityholders and/or purchasers of
the shares or both (which compensation as to a particular broker or dealer may
be in excess of customary commissions). In connection with such sales, the
Selling Securityholders and any participating broker or dealer may be deemed to
be "underwriters" within the meaning of the Securities Act, and any commissions
they receive and the proceeds of any sale of shares may be deemed to be
underwriting discounts and commissions under the Securities Act. All expenses of
the registration of the shares will be paid by Autobytel.com.
In order to comply with certain state securities laws, if applicable,
the shares may be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the shares may not be sold unless the
shares have been registered or qualified for sale in such state or an exemption
from regulation or qualification is available and is complied with. Sales of
shares must also be made by the Selling Securityholders in compliance with all
other applicable state securities laws and regulations.
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There can be no assurance that any of the Selling Securityholders will
sell any or all of the shares offered by them hereby.
Autobytel.com has notified the Selling Securityholders of the need to
deliver a copy of this prospectus in connection with any sale of the shares.
LEGAL MATTERS
The validity of the shares being offered hereby has been passed upon for
Autobytel.com by Paul, Hastings, Janofsky & Walker LLP, New York, New York,
counsel to Autobytel.com. Attorneys in the firm of Paul, Hastings, Janofsky &
Walker LLP own an aggregate of approximately 14,000 shares of common stock.
EXPERTS
The Consolidated Financial Statements of Autobytel.com incorporated by
reference in this prospectus have been examined by Arthur Andersen LLP,
independent public accountants, for the periods indicated in their reports
thereon. Such Financial Statements are set forth in reliance upon the reports of
such firms given upon their authority as experts in auditing and accounting.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following information filed with the Securities and Exchange
Commission is incorporated by reference herein: Autobytel.com's registration
statement on Form S-1 (Reg. No. 333-70621) filed with the Commission on January
15, 1999, including any amendment or report thereto subsequently filed by
Autobytel.com for the purpose of updating that registration statement pursuant
to the Securities Act.
All documents filed by Autobytel.com pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date hereof and prior
to the termination of the offering shall be deemed to be incorporated by
reference into this registration statement and to be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated herein by reference shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
Autobytel.com will provide without charge to any person to whom this
prospectus is delivered, upon written or oral request of such person, a copy of
each document incorporated by reference in the registration statement (other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference into this prospectus). Requests should be directed to
autobytel.com inc., 18872 MacArthur Boulevard, Irvine, California 92612-1400,
attention: Ariel Amir, Esq. (telephone 949-225-4500).
INDEMNIFICATION
Section 145 of the Delaware General Corporation Law permits a
corporation to include in its charter documents and in agreements between the
corporation and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by current law.
Article IX of Autobytel.com's Amended and Restated Certificate of
Incorporation provides for the indemnification of directors and officers to the
fullest extent permissible under Delaware law.
19
<PAGE> 22
Article VII of Autobytel.com's Bylaws provides for the indemnification
of officers and directors to the fullest extent permissible by the General
Corporation Law of the State of Delaware.
Autobytel.com has entered into agreements to indemnify its directors and
officers. These agreements, among other things, indemnify Autobytel.com's
directors and officers for expenses including attorney's fees, judgments, fines
and settlement amounts incurred by any such person in any action or proceeding
arising out of such person's services as an officer or director of
Autobytel.com.
Autobytel.com's directors and officers shall not be entitled to
indemnity under these agreements if a reviewing party appointed by the board of
directors determines that such person is not entitled to be indemnified
thereunder under applicable law. In addition, Autobytel.com's directors and
officers may not be indemnified for expenses reasonably incurred regarding any
claim related to the fact that such person was a director or officer of
Autobytel.com:
1) if the expenses result from acts, omissions or transactions for
which such person is prohibited from receiving indemnification;
2) if the claims were initiated or brought voluntarily by one of
Autobytel.com's directors or officers and not by way of defense,
counterclaim or cross claim; or
3) if a claim instituted by one of Autobytel.com's directors or
officers or by Autobytel.com to enforce or interpret the indemnity
agreement was found to be frivolous or made in bad faith by a court
having jurisdiction over such matter.
To the extent indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Autobytel.com as discussed above, Autobytel.com has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
Autobytel.com has a director and office holders' liability insurance
policy insuring its officeholders with respect to matters permitted by the
Delaware General Corporation Law. The policy is limited to liability of $20
million plus legal fees.
20
<PAGE> 23
No dealer, salesperson or any other person has been authorized to give
any information or to make any representations not contained in this prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by Autobytel.com, by any Selling Securityholder
or by any other person. This prospectus does not constitute an offer of any
securities other than those to which it relates or an offer to sell, or a
solicitation of an offer to buy, to any person in any jurisdiction in which such
an offer or solicitation would be unlawful. Neither the delivery of this
prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof or that there has been no change in the affairs of
Autobytel.com since such date.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information .................................................. 2
Risk Factors ........................................................... 2
Autobytel.com .......................................................... 15
Use of Proceeds ........................................................ 17
Selling Securityholders ................................................ 18
Plan of Distribution ................................................... 18
Legal Matters .......................................................... 19
Experts ................................................................ 19
Incorporation of Certain Documents by Reference ........................ 19
Indemnification ........................................................ 19
</TABLE>
265,399
SHARES
OF COMMON STOCK
AUTOBYTEL.COM INC.
------------------------
REOFFER PROSPECTUS
------------------------
May 6, 1999
<PAGE> 24
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following information filed with the Securities and Exchange
Commission (the "Commission") is incorporated herein by reference:
1. The Registrant's final prospectus filed pursuant to Rule 424(b)(3) on
March 26, 1999, pursuant to the Securities Act of 1933, as amended (the
"Securities Act").
2. The Registrant's Form 8-A filed on March 5, 1999, pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
3. The description of the common stock contained in the Registrant's
final prospectus filed pursuant to Rule 424(b)(3) on March 26, 1999,
pursuant to the Securities Act.
In addition, all documents filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this registration statement and prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference into this registration statement
and to be a part hereof from the date of filing of such documents with the
Commission. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this registration
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable; the class of securities to be offered is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of common stock registered
under this registration statement has been passed upon for Autobytel.com by
Paul, Hastings, Janofsky & Walker LLP. Attorneys in the firm of Paul, Hastings,
Janofsky & Walker LLP own an aggregate of approximately 14,000 shares of common
stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a
corporation to include in its charter documents and in agreements between the
corporation and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by current law.
II-1
<PAGE> 25
Article IX of Autobytel.com's Amended and Restated Certificate of
Incorporation provides for the indemnification of directors and officers to the
fullest extent permissible under Delaware law.
Article VII of Autobytel.com's Bylaws provides for the indemnification
of officers and directors to the fullest extent permissible by the General
Corporation Law of the State of Delaware.
Autobytel.com has entered into agreements to indemnify its directors and
officers. These agreements, among other things, indemnify Autobytel.com's
directors and officers for expenses including attorney's fees, judgments, fines
and settlement amounts incurred by any such person in any action or proceeding
arising out of such person's services as an officer or director of
Autobytel.com.
Autobytel.com's directors and officers shall not be entitled to
indemnity under these agreements if a reviewing party appointed by the board of
directors determines that such person is not entitled to be indemnified
thereunder under applicable law. In addition, Autobytel.com's directors and
officers may not be indemnified for expenses reasonably incurred regarding any
claim related to the fact that such person was a director or officer of
Autobytel.com:
1) if the expenses result from acts, omissions or transactions for
which such person is prohibited from receiving indemnification;
2) if the claims were initiated or brought voluntarily by one of
Autobytel.com's directors or officers and not by way of defense,
counterclaim or cross claim; or
3) if a claim instituted by one of Autobytel.com's directors or
officers or by Autobytel.com to enforce or interpret the indemnity
agreement was found to be frivolous or made in bad faith by a court
having jurisdiction over such matter.
To the extent indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Autobytel.com as discussed above, Autobytel.com has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
Autobytel.com has a director and office holders' liability insurance
policy insuring its officeholders with respect to matters permitted by the
Delaware General Corporation Law. The policy is limited to liability of $20
million plus legal fees.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The shares to be sold under the reoffer prospectus were initially sold
by Autobytel.com pursuant to Rule 701 as promulgated by the Commission under the
Securities Act or Section 4(2) of the Securities Act.
II-2
<PAGE> 26
ITEM 8. EXHIBITS.
The exhibits filed as part of this registration statement are as
follows:
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- ----------
<S> <C> <C>
3.1 Amended and Restated Certificate of Incorporation of the
Registrant.(*)
3.2 Amended and Restated By-laws of the Registrant.(*)
4.1 Form of Common Stock Certificate.(*)
4.2 Amended and Restated Investors' Rights Agreement, dated
October 21, 1997, as amended from time to time, between
autobytel.com inc. and the Investors named in Exhibit A
thereto.(*)
4.3 Form of Lock-Up Agreement.(*)
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP.
10.1 1996 Stock Option Plan.(*)
10.2 1996 Stock Incentive Plan.(*)
10.3 1996 Employee Stock Purchase Plan.(*)
10.4 1998 Stock Option Plan.(*)
10.5 1999 Stock Option Plan.(*)
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP (included in
Exhibit 5.1).
23.3 Consent of CNW Marketing Research.
24.1 Power of Attorney (included on the Signature Page).
</TABLE>
- ----------
(*) Incorporated by reference to the Registrant's registration statement on
Form S-1, Registration No. 333-70621, originally filed with the
Securities and Exchange Commission on January 15, 1999, and declared
effective (as amended) on March 25, 1999.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
A. (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;
II-3
<PAGE> 27
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. 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 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (A) (1) (i) and (A) (1) (ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of 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, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
C. Insofar as indemnification for liabilities arising under the
Securities Act 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, 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 by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-4
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irvine, State of California, on May 6, 1999.
autobytel.com inc.
(Registrant)
By: /s/ Mark W. Lorimer
-------------------------------------
Mark W. Lorimer
Chief Executive Officer,
President and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark W. Lorimer, Hoshi Printer and Ariel
Amir, with full power to act without the other, and each of them, as his true
and lawful attorney- or attorneys-in-fact and agent or agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to the registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory authority, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully 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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Michael Fuchs Chairman of the Board and Director May 6, 1999
- ------------------------------
MICHAEL FUCHS
/s/ Jeffrey H. Coats Director May 6, 1999
- ------------------------------
JEFFREY H. COATS
/s/ Mark N. Kaplan Director May 6, 1999
- ------------------------------
MARK N. KAPLAN
</TABLE>
II-5
<PAGE> 29
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Kenneth J. Orton Director May 6, 1999
- ------------------------------
KENNETH J. ORTON
/s/ Robert S. Grimes Executive Vice President and Director May 6, 1999
- ------------------------------
ROBERT S. GRIMES
/s/ Mark W. Lorimer Chief Executive Officer, President May 6, 1999
- ------------------------------ and Director (Principal Executive
MARK W. LORIMER Officer)
/s/ Hoshi Printer Senior Vice President and Chief May 6, 1999
- ------------------------------ Financial Officer (Principal
HOSHI PRINTER Accounting and Financial Officer)
/s/ Ann M. Delligatta Executive Vice President and Chief May 6, 1999
- ------------------------------ Operating Officer
ANN M. DELLIGATTA
/s/ Peter Titz Director May 6, 1999
- ------------------------------
PETER TITZ
/s/ Richard A. Post Director May 6, 1999
- ------------------------------
RICHARD POST
</TABLE>
<PAGE> 30
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- ----------
<S> <C> <C>
3.1 Amended and Restated Certificate of Incorporation of the
Registrant.(*)
3.2 Amended and Restated By-laws of the Registrant.(*)
4.1 Form of Common Stock Certificate.(*)
4.2 Amended and Restated Investors' Rights Agreement, dated
October 21, 1997, as amended from time to time, between
autobytel.com inc. and the Investors named in Exhibit A
thereto.(*)
4.3 Form of Lock-Up Agreement.(*)
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP.
10.1 1996 Stock Option Plan.(*)
10.2 1996 Stock Incentive Plan.(*)
10.3 1996 Employee Stock Purchase Plan.(*)
10.4 1998 Stock Option Plan.(*)
10.5 1999 Stock Option Plan.(*)
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP (included in
Exhibit 5.1).
23.3 Consent of CNW Marketing Research.
24.1 Power of Attorney (included on the Signature Page).
</TABLE>
- ----------
(*) Incorporated by reference to the Registrant's registration statement on
Form S-1, Registration No. 333-70621, originally filed with the
Securities and Exchange Commission on January 15, 1999, and declared
effective (as amended) on March 25, 1999.
<PAGE> 1
Exhibit 5.1
Paul, Hastings, Janofsky & Walker LLP
399 Park Avenue
New York, New York 10022
(212) 318-6000
May 6, 1999
26600.89037
autobytel.com inc.
18872 MacArthur Boulevard
Irvine, California 92612-1400
Re: autobytel.com inc./Registration Statement on Form S-8
Ladies and Gentlemen:
We are furnishing this opinion as counsel to autobytel.com inc., a
Delaware corporation (the "Company"), for filing as Exhibit 5.1 to the
Registration Statement on Form S-8 (the "Registration Statement") to be filed by
the Company on or about May 6, 1999 with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, in connection with the
registration by the Company of up to 5,466,940 shares (the "Shares") of the
Company's common stock, par value $0.001 per share, pursuant to the exercise of
stock options issued or to be issued to employees and/or directors under
<PAGE> 2
the Company's 1996 Stock Option Plan, 1996 Stock Incentive Plan, 1996 Employee
Stock Purchase Plan, 1998 Stock Option Plan and 1999 Stock Option Plan
(collectively, the "Plans").
In our capacity as counsel for the Company in connection with the
matters referred to above, we have examined the Amended and Restated Certificate
of Incorporation, the Amended and Restated Bylaws of the Company, the Plans,
originals or copies of records of corporate action of the Company as furnished
to us by the Company, certificates of public officials and of representatives of
the Company and other instruments and documents, as a basis for the opinions
hereinafter expressed.
Based upon our examination as aforesaid, we are of the opinion that the
Shares are duly authorized and, when purchased and paid for upon exercise of
options pursuant to the Plans and pursuant to the agreements which accompany
each grant under the applicable Plan, will be validly issued, fully paid and
nonassessable.
We hereby consent to being named as counsel to the Company in the
Registration Statement, to the references therein to our Firm under the caption
"Legal Matters" and to the inclusion of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Paul, Hastings, Janofsky & Walker LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our reports dated March 25, 1999 included in autobytel.com inc.'s
Post Effective Amendment No. 1 to the registration statement on Form S-1 and to
all references to our Firm in this registration statement on Form S-8.
/s/ ARTHUR ANDERSEN LLP
May 4, 1999
Los Angeles, California
<PAGE> 1
EXHIBIT 23.3
CNW Marketing Research
10 Tari Lane, Bandon, OR
April 26, 1999
Ariel Amir
Vice President and General Counsel
Autobytel.com
18872 MacArthur Boulevard
2nd Floor
Irvine, CA 92612-1400
Dear Mr. Amir:
This letter will serve as permission to use our statistics, with proper
identification, in your registration statement on Form S-8.
As reflected in the attached spreadsheets, the size of the US automotive
market in 1998 was $667 billion (new and used).
Sincerely,
/s/ ART SPINELLA
-------------------------------
Art Spinella
Vice President, General Manager
