<PAGE>
As filed with the Securities and Exchange Commission on July 28, 2000.
Registration No. 333-
-------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------
REGISTRATION STATEMENT
ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
---------------------------
WORLDGATE COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 23-2866697
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
---------------------------
3190 TREMONT AVENUE
TREVOSE, PENNSYLVANIA 19053
(215) 354-5100
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
---------------------------
RANDALL J. GORT, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
WORLDGATE COMMUNICATIONS, INC.
3190 TREMONT AVENUE
TREVOSE, PENNSYLVANIA 19053
(215) 354-5100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------------
COPIES OF ALL COMMUNICATIONS TO:
WALTER J. MOSTEK, JR., ESQ.
DRINKER BIDDLE & REATH LLP
1000 WESTLAKES DRIVE, SUITE 300
BERWYN, PENNSYLVANIA 19312-2409
(610) 993-2200
---------------------------
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effectiveness of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<CAPTION>
Calculation of Registration Fee
----------------------------------------------------------------------------------------------------------
Title of Shares Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Aggregate Price Per Aggregate Offering Registration Fee
Share (1) Price (1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,531,211 $24.28125 $37,179,717 $9815
$.01 Par Value Per
Share
----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended. The
maximum price per share information is based on the average of the high and
low prices of the registrant's common stock as reported on the Nasdaq
National Market System on July 21, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PROSPECTUS
----------
WORLDGATE COMMUNICATIONS, INC.
1,531,211 Shares of Common Stock
-----------------
This prospectus relates to the resale of 1,531,211 shares of our common
stock issued to the selling stockholders listed on page 13 in connection with
four separate common stock purchase agreements. The selling stockholders may
offer and sell the shares covered by this prospectus from time to time. We will
not receive any proceeds from the sale of the shares by the selling
stockholders. The selling stockholders may offer our common stock through public
or private transactions, at prevailing market prices, at prices related to
prevailing market prices or at privately negotiated prices.
Our common stock is traded on the Nasdaq National Market under the symbol
"WGAT." On July 25, 2000, the last sale price for the common stock was $29 7/16
per share.
-----------------
Investing in our common stock involves risks. You should carefully consider
the "risk factors" beginning on page 3 of this prospectus before you decide to
invest.
-----------------
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.
Our principal executive offices are located at 3190 Tremont Avenue,
Trevose, Pennsylvania 19053 and our telephone number is (215) 354-5100.
The date of this prospectus is July 28, 2000.
<PAGE>
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
You should read this entire prospectus carefully.
WORLDGATE COMMUNICATIONS
WorldGate provides a television-based Internet service, the WORLDGATE-SM-
Service, that enables cable television subscribers to access the Internet
through their televisions. The WORLDGATE Service provides:
- full featured, high speed, easy to use, always connected, low cost
consumer Internet access,
- the ability to access the Internet with a standard cable television
box that has been WORLDGATE enabled, without a phone line, an in-home
computer or a dedicated set-top appliance,
- a centralized computer network design that allows for easy deployment
and set-up, central system management and centrally administered
upgrades, and
- a television-based entry point to the Internet that enables viewers to
dynamically link from television programming and advertising to
related Internet content.
The WORLDGATE Service is designed to operate with cable systems using
advanced analog and/or current and future generation digital cable television
set-top boxes. We believe that we are the only company that can currently
provide an Internet television service through both an advanced analog and
digital cable box. We believe this is particularly important to the many cable
operators who are deploying, or will deploy, both types of cable boxes. As of
March 31, 2000, there were approximately 19,000 subscribers to the WORLDGATE
Service and 16 cable operators are commercially deploying the WORLDGATE Service.
Our CHANNEL HYPERLINKING -SM- technology integrates the dynamics of the
Internet with television's proven advertiser-sponsored entertainment model. This
technology will enable a viewer watching a television program or advertisement
to link within seconds to a related interactive Web site. We are working with
over 70 television programmers, advertisers, advertising agencies and e-commerce
merchants to develop a centralized database that provides viewers with our
CHANNEL HYPERLINKING capability.
We believe that our low cost combination of television and the Internet
will help transform advertising, electronic commerce and information delivery
for the consumer mass market.
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RISK FACTORS
------------
This section highlights specific risks with respect to an investment in our
business. Investing in our common stock involves a high degree of risk.
Purchasing our common stock is very risky and you should be able to bear the
complete loss of your investment. We also caution you that this prospectus
includes forward-looking statements that are based on management's beliefs and
assumptions and on information currently available to management. You should
carefully consider the risks described below and the other information in this
prospectus and documents incorporated by reference herein before purchasing our
common stock. The risks and uncertainties described below are not the only ones
we face. Additional risks and uncertainties not presently known by us or that we
currently deem immaterial also may impair our business operations. If any of the
following risks actually occur, our business could be harmed. In such case, the
trading price of our common stock could decline, and you may lose all or part of
your investment.
WE MAY EXPERIENCE DIFFICULTIES DEVELOPING AND IMPLEMENTING OUR MARKETING
AND BUSINESS PLANS.
We began operations in March 1995 and our service was first made
commercially available in the third quarter of 1998. As a result, our operating,
sales and marketing and other strategies are still being developed, and we do
not have a history which may give us or you an indication of how we may respond
to situations presented to us. If we are not successful in implementing our
marketing and business plans on a timely basis or otherwise effectively managing
our development, our business, operating results and financial condition will be
materially adversely affected.
IF WE CONTINUE TO INCUR LOSSES, WE MAY NOT BE ABLE TO FINANCE THE COMMERCIAL
DEPLOYMENT OF THE WORLDGATE SERVICE.
We have experienced losses and have had negative cash flow in each quarter
and year since inception, and we expect to continue to operate at a loss for the
foreseeable future. To make a profit, we must increase our revenues and gross
profit margin. If we are not able to do so, our losses may extend beyond the
foreseeable future and we may not be able to finance the commercial deployment,
development and enhancement of the WORLDGATE Service.
Our aggregate revenues from inception to March 31, 2000 were approximately
$8.3 million, and our aggregate accumulated deficit at March 31, 2000 was
approximately $99.9 million. In addition, we currently intend to increase our
operating expenses and capital expenditures in order to continue the commercial
deployment of the WORLDGATE Service. As a result, we expect to experience
substantial additional operating losses and negative cash flow for the
foreseeable future.
BECAUSE TELEVISION-BASED INTERNET ACCESS IS NEW, WE CANNOT BE CERTAIN THAT A
MARKET OR SUSTAINABLE DEMAND FOR THE WORLDGATE SERVICE WILL DEVELOP.
The market for television-based Internet access is new and evolving, and no
single technology or approach to providing this access has been widely adopted
by consumers or cable operators. As a result, we cannot guarantee that a market
for television-based Internet access in general, or for the WORLDGATE Service in
particular, will develop or that demand for the WORLDGATE Service will be
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<PAGE>
sustainable. If the market does not develop, develops more slowly than expected
or becomes saturated with competitors or competing technology becomes more
widely accepted, our business, operating results, and financial condition will
be materially adversely affected.
THE COMPETITIVE MARKET FOR INTERNET ACCESS MAY LIMIT DEMAND OR PRICING FOR
THE WORLDGATE SERVICE.
We experience intense competition. Many companies provide and others may in
the future provide Internet access and other services with functionality similar
to those comprising the WORLDGATE Service.
As a result of this and future competition, demand for the WORLDGATE
Service may suffer, we may be restricted in the pricing we can charge for the
WORLDGATE Service and our business, financial condition and results of
operations may be adversely affected. Competitors provide their services through
a variety of technologies, which are in various stages of implementation and
adoption. Many of our competitors have significantly greater financial,
technical, marketing, distribution, customer support, name recognition,
compelling content, access to consumers and other resources, and more
established relationships with cable operators, advertisers and content and
application providers than we have.
WE MAY NOT SUCCEED IF CABLE OPERATORS DO NOT OFFER THE WORLDGATE SERVICE TO
THEIR SUBSCRIBERS.
We have entered into a limited number of agreements with cable operators
providing for the commercial launch of the WORLDGATE Service in some of the
markets served by these cable operators. If cable operators determine that our
service is not viable as a business proposition or if they determine that the
service does not meet their business or operational expectations or strategies,
they will not offer the WORLDGATE Service to their subscribers. Furthermore,
because there are a limited number of cable operators, as well as consolidation
in the industry, the failure to reach agreements with these major cable
operators which service a significant number of cable subscribers could
materially adversely affect the market for the WORLDGATE Service.
OUR REVENUES WILL DEPEND ON THE MANNER IN WHICH CABLE OPERATORS MARKET AND PRICE
THE WORLDGATE SERVICE.
We depend on cable operators to provide the WORLDGATE Service to their
subscribers and therefore have limited or no control over a number of important
factors, including:
- the cable operators' advertising or marketing strategy, if any,
regarding their offering of the WORLDGATE Service to their
subscribers,
- the monthly fees cable operators charge to their subscribers for the
WORLDGATE Service, and
- the extent to which cable operators purchase additional WorldGate
equipment to avoid reduction in performance if subscriber demand
grows.
Our revenues may not meet our expectations if the cable operators'
marketing, pricing and operating strategies are inconsistent with our business
model.
-4-
<PAGE>
THE MARKET FOR THE WORLDGATE SERVICE WILL BE ADVERSELY AFFECTED IF CABLE
OPERATORS DO NOT CONTINUE TO UPGRADE THEIR SYSTEM INFRASTRUCTURES TO SUPPORT
TWO-WAY DATA TRANSMISSIONS.
The adoption of the WORLDGATE Service is dependent upon continued
investment by cable operators to upgrade their infrastructures to support
two-way data transmissions. It is uncertain whether cable operators will upgrade
their infrastructures and the failure of cable operators to complete these
upgrades in a timely and satisfactory manner would adversely affect the market
for the WORLDGATE Service.
Although the WORLDGATE Service can operate over one-way cable plant that is
only capable of transmitting programming to subscribers, it can do so only in
conjunction with a telephone line. As such, it is less convenient and efficient
for a subscriber to use the WORLDGATE Service over one-way cable plant and, to
date, the majority of cable operators who are deploying the WORLDGATE Service
have done so over two-way cable plants that are capable of transmitting
information from the cable operator's facility to the subscribers and vice
versa. We cannot assure you that cable operators will upgrade their cable plant
to two-way plant or that they will do so in a timely and satisfactory manner. In
the event that they do not do so, our business, financial condition and results
of operations could be materially adversely affected.
CABLE OPERATORS MAY BE CONTRACTUALLY LIMITED IN THEIR ABILITY TO OFFER THE
WORLDGATE SERVICE.
We are aware that some cable operators, such as Cablevision, Comcast
Corporation, Cox Communications, Inc. and AT&T Corporation, whose cable systems
collectively serve more than 26 million U.S. homes, or at least 26% of all U.S.
homes, have entered into distribution agreements with At Home Corporation. These
agreements contain exclusivity provisions that purport to prohibit these cable
operators from conducting or participating in any business in the United States
that involves the provision of residential Internet services over their cable
plants at data transmission speeds greater than 128 Kbps. These agreements could
be interpreted to preclude or hinder these cable operators from offering the
WORLDGATE Service to their subscribers at speeds in excess of 128 Kbps. If cable
operators are unwilling or unable to offer the WORLDGATE Service to subscribers
in these cable systems, our business, financial condition and results of
operations would be materially adversely affected.
CABLE OPERATORS AND CABLE BOX MANUFACTURERS MAY NOT OFFER THE WORLDGATE SERVICE
BECAUSE THEY MAY HAVE POTENTIAL CONFLICTS OF INTEREST.
Some cable operators and cable box manufacturers are stockholders of other
companies that provide Internet services. To the extent that these cable
operators elect not to offer the WORLDGATE Service because of these
affiliations, our business, financial condition and results of operations could
be materially adversely affected. For example, AT&T, Comcast, Cox and
Cablevision are stockholders of At Home; and MediaOne Group, Inc. (which has
agreed to be acquired by AT&T) and Time Warner have established their own
cable-based Internet service, called Road Runner, with proprietary content
featuring various Time Warner publications and services. Also, some companies
that provide Internet services, such as Microsoft Corporation, are stockholders
of cable operators or cable box manufacturers. We cannot assure you that there
will not be other investments among providers of Internet services, cable
operators and/or cable box manufacturers. As a result, these cable operators and
cable box manufacturers may be reluctant to provide any service, including the
WORLDGATE Service, or to otherwise work with any entity that provides other
Internet services in competition with their affiliates.
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<PAGE>
ONLY CABLE TELEVISION SUBSCRIBERS WHO UTILIZE A CABLE SET-TOP BOX CAN RECEIVE
THE WORLDGATE SERVICE.
For cable television subscribers to receive the WORLDGATE Service, they
must have a cable set-top box that can be WorldGate enabled. Currently, many
cable television subscribers receive their cable television service through the
cable line directly into their televisions, without a set-top box. We cannot
assure you that cable operators serving these subscribers will elect to provide
them with set-top boxes for the purpose of offering the WORLDGATE Service, or
that these customers will choose to utilize a set-top box in order to receive
the WORLDGATE Service.
WE CANNOT OFFER THE WORLDGATE SERVICE IF CABLE BOX MANUFACTURERS DO NOT
INCORPORATE OUR TECHNOLOGY INTO THEIR CABLE BOXES.
In order to access the WORLDGATE Service, a consumer needs a WorldGate
enabled digital or advanced analog cable box. We rely on cable box
manufacturers, particularly General Instrument (now a part of Motorola) and
Scientific-Atlanta, the two largest suppliers of cable boxes to cable
operators, to install our technology in their cable boxes. Neither General
Instrument nor Scientific Atlanta is required to install our technology in
its cable boxes and neither company is prohibited from establishing
relationships with any of our competitors and incorporating our competitors'
technologies into their cable boxes. In addition, our technology must be
certified by General Instrument and Scientific-Atlanta for each model of
cable box before cable operators are willing to deploy them to their
subscribers, and, although we have certification for some models, we cannot
assure you that our technology will be certified for other models on a timely
basis, if at all.
Additionally, because General Instrument and Scientific-Atlanta are the two
largest suppliers of cable boxes, their decision not to install our technology
in their cable boxes or to develop similar technology with our competitors would
have a material adverse effect on our future success. Both General Instrument
and Scientific-Atlanta have joined us in promoting the WORLDGATE Service and if
either company severed this relationship with us, we would lose a valuable sales
and marketing resource.
WE ARE SUBJECT TO CAPACITY CONSTRAINTS AND SYSTEM FAILURES.
Due to the limited deployment of the WORLDGATE Service, the ability of our
service to accommodate a substantial number of users is not yet known. We cannot
assure you that we will be able to provide high quality performance and high
transaction speeds as the number of subscribers grows or their usage increases.
In addition, as subscriber penetration grows it may be necessary for cable
operators to purchase additional equipment, and we cannot assure you that they
will do so.
The performance of the WORLDGATE Service is also subject to reduction in
performance and interruption from human errors, telecommunication failures,
computer viruses and similar events. Any of these problems in our systems or
those of cable operators could result in reduced subscriber demand. We have
experienced performance reduction and service interruptions from time to time in
the past and we expect that these problems will continue from time to time. Our
failure to provide uninterrupted service at a level of performance acceptable to
subscribers would have a material adverse effect on our business, financial
condition and results of operations.
PENDING INTELLECTUAL PROPERTY CLAIMS AGAINST US COULD BE COSTLY AND RESULT IN
THE LOSS OF SIGNIFICANT RIGHTS.
We are subject to patent litigation that claims we are infringing other
parties' intellectual property rights.
-6-
<PAGE>
- Interactive Channel Technologies, Inc. and SMI Holdings, Inc.,
subsidiaries of Source Media, Inc. (whose technology has been acquired
by Liberate Technologies), filed a complaint against us alleging that
we infringed patents issued to Source Media.
- Advanced Interactive, Inc. filed a complaint against us and several
other defendants alleging that the defendants infringed a patent
assigned to Advanced Interactive.
If the plaintiffs win either lawsuit, we could be precluded from offering
the WORLDGATE Service. We cannot assure you that licenses to any of the
technologies owned by the plaintiffs in these lawsuits would be available to us
on commercially reasonable terms, if at all. Irrespective of the validity or the
successful assertion of these claims, they could result in significant costs and
diversion of management time and resources. This would have a material adverse
effect on our business, financial condition and results of operations.
THE SUCCESS OF OUR CHANNEL HYPERLINKING TECHNOLOGY WILL BE ADVERSELY AFFECTED IF
ADVERTISERS AND TELEVISION PROGRAMMERS DO NOT PROVIDE US WITH NECESSARY CONTENT.
Our future growth and long-term success depends substantially on our
ability to convince advertisers and television programmers to use our CHANNEL
HYPERLINKING technology with their advertisements and television programs. As of
March 31, 2000, other than QVC, Inc., no advertiser or programmer had paid us to
use our CHANNEL HYPERLINKING technology, or was obligated to use our CHANNEL
HYPERLINKING technology in their advertisements or programs. We believe that the
adoption of the CHANNEL HYPERLINKING technology is substantially dependent on
our service meeting advertisers' and programmers' business or operational
expectations or strategies, and us achieving a significant number of subscribers
to the WORLDGATE Service.
We cannot assure you that we will achieve either of the above goals. If we
fail to incorporate our CHANNEL HYPERLINKING technology in a substantial number
of advertisements and programs, our business, operating results and financial
condition could be materially adversely affected.
RAPID TECHNOLOGICAL CHANGE COULD RENDER OUR SERVICES OBSOLETE.
The market for consumer Internet access services and online content is
characterized by rapid technological developments, frequent new product
introductions and evolving industry standards. The nature of the market for
these products and services and their rapid evolution requires that we
continually improve the performance, features and reliability of the WORLDGATE
Service, particularly in response to competitive offerings. We may not be
successful in responding quickly, cost-effectively and adequately to these
developments. There may be a time-limited market opportunity for the WORLDGATE
Service, and we may not be successful in achieving widespread acceptance of the
WORLDGATE Service before competitors offer products and services with speed and
performance similar to, or better than, our current offerings.
THE LOSS OF ANY ONE OF OUR LARGEST CUSTOMERS COULD ADVERSELY AFFECT OUR REVENUES
AND FUTURE PROSPECTS.
We have in the past derived, and expect in the future to derive, a
significant portion of our revenues from a limited number of customers. In the
event that any of these customers cease to offer the WORLDGATE Service, our
business, operating results and financial condition could be materially
adversely affected. In 1997, three cable operators accounted for approximately
100% of our revenues, in 1998, ten cable operators accounted for approximately
98% of our revenues, and in 1999, ten cable
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operators accounted for 79% of our revenues. Moreover, in 1998, Charter and
Click!Network accounted for 44% and 10%, respectively, of our revenues, and in
1999, Charter, Click!Network, Buckeye Cable Systems and Singapore CableVision
Ltd. accounted for 26%, less than 10%, 17% and 13%, respectively, of our
revenues. We cannot assure you that any of these customers will continue to
offer the WORLDGATE Service to their cable subscribers.
OUR INTERNATIONAL OPERATIONS ARE SUBJECT TO MANY UNCERTAINTIES.
A key component of our strategy is the expansion of the WORLDGATE Service
into international markets. We have limited experience in developing localized
versions of our service and in developing relationships with international cable
system operators. We may not be successful in expanding our service offerings
into foreign markets. In addition to the uncertainty regarding our ability to
generate revenues from foreign operations and expand our international presence,
there are certain risks inherent in doing business on an international level,
such as:
- difficulties in collecting accounts receivable and longer collection
periods,
- regulatory requirements, including the regulation of Internet access,
- export and import restrictions, including tariffs and other trade
barriers,
- difficulties in staffing and managing foreign operations;
- political instability, and
- fluctuations in currency exchange rates.
Any of these factors could materially adversely affect the success of our
current and future international operations.
WE MAY HAVE LIABILITY FOR INFORMATION RETRIEVED OR REPLICATED ON THE INTERNET.
Claims for negligence, copyright or trademark infringement or other legal
theories could be made against us because information can be downloaded and
redistributed by users of the WORLDGATE Service. Copyright and trademark laws
are evolving both domestically and internationally and we are uncertain how they
apply to the WORLDGATE Service. The imposition of liability for information
carried by us would have a material adverse effect on our business, operating
results and financial condition.
WE MAY HAVE LIABILITY FOR E-COMMERCE TRANSACTIONS.
As part of our business, we are seeking to enter into agreements with
content providers, advertisers and e-commerce merchants under which we will
receive a share of revenue from the purchase of goods and services by users of
the WORLDGATE Service. These arrangements may expose us to additional legal
risks and uncertainties, including potential liabilities to consumers of these
products and services. Our insurance may not cover potential claims of this type
or may not be adequate to indemnify us for all liability that may be imposed.
-8-
<PAGE>
WE COULD BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION WHICH AFFECTS OUR
ABILITY TO OFFER OUR SERVICE OR WHICH AFFECTS DEMAND FOR OUR SERVICE.
We are subject to varying degrees of federal, state, local and foreign
regulations as well as laws enacted by the U.S. Congress and other governments.
The Federal Communications Commission has established regulations that, among
other things, set licensing, access, installation and equipment standards for
communications systems. We are uncertain how these regulations may be applied to
Internet services offered over cable television systems.
We also anticipate that due to its increasing popularity and use, the
Internet will be subject to increased attention and regulation. These laws and
regulations may regulate issues such as user privacy, defamation, network
access, pricing, taxation, content, quality of products and services and
intellectual property ownership and infringement. These laws and regulations
could expose us to liability, materially increase our cost of providing our
service, and decrease the growth and acceptance of the Internet in general and
access to the Internet over cable systems.
OUR BUSINESS WOULD SUFFER IF WE WERE TO LOSE THE SERVICES OF HAL M. KRISBERGH
OR OTHER KEY PERSONNEL.
Our success depends in significant part upon the continued service of our
key technical, sales and senior management personnel, particularly Mr.
Krisbergh, who has significant relevant experience in the cable television
industry. No officer or employee of WorldGate is bound by an employment
agreement, and any officer or employee of WorldGate could terminate his or her
relationship with us at any time. Our future success will also depend on our
ability to attract, train, retain and motivate highly qualified senior
management, technical, marketing and sales personnel. Because competition for
these personnel is intense, we cannot assure you that we will be able to do so.
THE ABILITY TO INFLUENCE THE OUTCOME OF STOCKHOLDER VOTES MAY BE LIMITED BY THE
SIGNIFICANT OWNERSHIP INTEREST OF OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER.
Hal M. Krisbergh beneficially owns approximately 28% of the outstanding
common stock as of July 1, 2000. Mr. Krisbergh has the voting power to exercise
substantial control over the election of our entire board of directors and all
votes on matters requiring stockholder approval. This concentration of ownership
may also have the effect of delaying or preventing a change in control of
WorldGate.
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS COULD DISCOURAGE UNWANTED
TAKEOVER ATTEMPTS AND COULD REDUCE THE OPPORTUNITY FOR STOCKHOLDERS TO GET A
PREMIUM FOR THEIR SHARES.
We are subject to Delaware laws and to provisions of our certificate of
incorporation and by-laws that could have the effect of delaying, deterring or
preventing a change in control of WorldGate. As a result, our management could
attempt to utilize these laws and provisions to discourage or reject unsolicited
bids to acquire us, including bids that would have paid stockholders a premium
over the then current market price of their shares.
WE MAY BE UNABLE TO OBTAIN NECESSARY ADDITIONAL CAPITAL TO FUND OPERATIONS IN
THE FUTURE.
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<PAGE>
To date, we have funded operations primarily through private sales of
equity securities and through our initial public offering of common stock in
April 1999. If we are unable to obtain additional financing on terms acceptable
to us as needed, our business, operating results and financial condition would
be materially adversely affected. Our capital requirements in the future will
depend on numerous factors, including:
- the rate of acceptance of the WORLDGATE Service by cable operators,
cable subscribers, advertisers, television programmers, e-commerce
companies and Internet content providers,
- our ability to maintain and increase the number of subscribers, and
- the rate of commercialization of the WORLDGATE Service and the
acquisition of related businesses or technology, if any.
We cannot predict the timing or amount of our capital requirements. Any
additional equity financing, if available, may be dilutive to our stockholders,
and debt financing, if available, may involve significant restrictions on our
financing and operating activities.
OUR COMMON STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE.
The market price of our common stock has been and will likely continue to
be highly volatile as the stock market in general, and the market for
Internet-related and technology companies in particular, has been highly
volatile. Investors may not be able to resell their shares of our common stock
following periods of volatility because of the market's adverse reaction to such
volatility. The trading prices of many technology and Internet-related
companies' stocks have reached historical highs within the last 52 weeks and
have reflected relative valuations substantially above historical levels. During
the same period, such companies' stocks have also been highly volatile and have
recorded lows well below such historical highs. We cannot assure you that our
stock will trade at the same levels of other Internet stocks or that Internet
stocks in general will sustain their current market prices. Factors that could
cause such volatility may include, among other things:
- actual or anticipated variations in quarterly operating results;
- announcements of technological innovations;
- new products or services;
- changes in financial estimates by securities analysts;
- conditions or trends in the Internet or cable industry;
- changes in the market valuations of other Internet or cable companies;
- announcements by us or our competitors of significant acquisitions,
strategic partnerships or joint ventures;
- capital commitments;
- additions or departures of key personnel; and
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<PAGE>
- sales of common stock.
Many of these factors are beyond our control. These factors may materially
adversely affect the market price of our common stock, regardless of our
operating performance.
SUBSTANTIAL SALES OF OUR COMMON STOCK COULD LOWER OUR STOCK PRICE.
The market price for our common stock could drop as a result of sales of a
large number of our presently outstanding shares, including shares issued upon
the exercise of outstanding options and warrants, or the perception that these
sales could occur. These factors also could make it more difficult for us to
raise funds through future offerings of our common stock. Certain holders of our
common stock have demand and piggy-back registration rights. The exercise of
such rights could adversely affect the market price of our common stock.
We have also filed:
- on October 8, 1999, a shelf registration statement (Registration No.
333-87029) under the Securities Act for the resale of 331,490 shares
of common stock issuable upon exercise of outstanding warrants and
373,863 shares of common stock.
- on April 28, 2000, a registration statement (Registration No.
333-35936) under the Securities Act for resale of 119,047 shares of
common stock that we issued to the selling stockholder, and
- on May 20, 1999 a registration statement (Registration No. 333-78943)
to register all shares of common stock under our stock option plan.
These shares are eligible for resale in the public market without
restriction.
OUR RESULTS MAY DIFFER MATERIALLY FROM THOSE FORECASTED OR EXPRESSED IN THE
FORWARD-LOOKING STATEMENTS.
Expressed forward-looking statements are not historical facts, but rather
are based on our current expectations, estimates and projections about
WorldGate's industry and our beliefs and assumptions. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates"
and similar expressions are intended to identify forward-looking statements.
These statements are not guarantees of future performance and are subject to
some risks, uncertainties and other factors, many of which are beyond our
control, are difficult to predict and could cause actual results to differ
materially from those expressed or forecasted in the forward-looking statements.
We caution you not to place undue reliance on these forward-looking statements,
which reflect our management's view only as of the date of this document. We are
not generally obligated to update these statements or publicly release the
result of any revisions to them to reflect events or circumstances after the
date of this document or to reflect the occurrence of unanticipated events.
USE OF PROCEEDS
---------------
We will not receive any proceeds from the sale of the shares by the selling
stockholders. The selling stockholders will receive all of the net proceeds from
the sale of the shares.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by them for brokerage, accounting, tax, legal
services or other expenses incurred by the selling stockholders in disposing of
their shares. We will bear all other costs, fees and expenses incurred in
-11-
<PAGE>
effecting the registration of the shares covered by this prospectus, including,
without limitation, all registration and filing fees, Nasdaq National Market
listing fees, fees and expenses of our counsel, fees of our accountants, and
blue sky fees and expenses.
-12-
<PAGE>
SELLING STOCKHOLDERS
--------------------
The following table sets forth certain information regarding the beneficial
ownership of the shares of common stock by the selling stockholders as of July
24, 2000. The shares are being registered to permit public secondary trading of
these shares, and each selling stockholder may offer the shares for resale from
time to time.
We do not know when or in what amounts the selling stockholders may offer
shares for sale. The selling stockholders may not sell all or any of the shares
offered by this prospectus. Because the selling stockholders may offer all or
some of the shares pursuant to this offering, and because there are currently no
agreements, arrangements or understandings with respect to the sale of any of
the shares that will be held by the selling stockholders after completion of the
offering, we cannot estimate the number of shares that will be held by the
selling stockholders after completion of the offering. However, for purposes of
this table, we have assumed that, after completion of the offering, none of the
shares covered by this prospectus will be held by the selling stockholders.
On July 24, 2000, WorldGate agreed to sell 1,531,211 shares of common stock
in a private placement to the selling stockholders at the price of $16.02 per
share pursuant to four separate common stock purchase agreements. This
prospectus covers the resale by those selling stockholders of the shares issued
in the private placement. The private placement was exempt from the registration
requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D
of the Securities Act.
Unless otherwise indicated below, to our knowledge, all persons listed
below have sole voting and investment power with respect to their shares of
common stock, except to the extent authority is shared by spouses under
applicable law. Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission, based on factors including voting and
investment power with respect to shares, subject to applicable community
property laws. Shares of common stock subject to options or warrants exercisable
within 60 days of July 24, 2000 are deemed outstanding for the purpose of
computing the percentage ownership of the person holding such options or
warrants, but are not deemed outstanding for computing the percentage ownership
of any other person.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING AFTER THE OFFERING (1)
-----------------------------------------------------------------------------------------------------------------
NAMES OF NUMBER OF PERCENTAGE NUMBER OF SHARES NUMBER OF PERCENTAGE
SELLING STOCKHOLDERS SHARES # BEING OFFERED SHARES #
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ACC Operations, Inc. (2) 500,000 2.2% 500,000 --- ---
-----------------------------------------------------------------------------------------------------------------
Charter Communications Holding 402,018 1.7% 31,211 370,807 1.6%
Company, LLC (2)
-----------------------------------------------------------------------------------------------------------------
Comcast Programming Holdings, 500,000 2.2% 500,000 --- ---
Inc. (2)
-----------------------------------------------------------------------------------------------------------------
Cox Communications Holdings, 500,000 2.2% 500,000 --- ---
Inc. (2)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
# Percentage is based on 21,704,009 shares of outstanding common stock
as of July 21, 2000, plus the 1,531,211 shares WorldGate agreed to
sell to the selling stockholders on July 24, 2000.
* Less than 1% of the outstanding common stock.
(1) Assumes the resale by the selling stockholders of all shares offered
for sale under this prospectus.
-13-
<PAGE>
(2) Each selling stockholder also holds a warrant to purchase up to
500,000 shares of common stock, although the warrants are not
presently exercisable. The number of shares purchasable pursuant to
the warrant will be based on the number of homes in the selling
stockholder's distribution system to which WorldGate SERVICE is
deployed.
-14-
<PAGE>
PLAN OF DISTRIBUTION
--------------------
Selling stockholders may, from time to time, elect to sell all or a portion
of the shares offered under this prospectus in the Nasdaq National Market. Sales
are anticipated to be made at prices prevailing in the Nasdaq National Market at
the times of such sales. Selling stockholders may also make private sales
directly or through a broker or brokers, who may act as agent or principal. In
connection with any sales, selling stockholders and any brokers participating in
such sales may be deemed to be underwriters within the meaning of the Securities
Act.
Selling stockholders also may sell the securities to one or more
underwriters or dealers for public offering and sale by them. In such case, a
prospectus supplement will set forth the terms of the offering and the method of
distribution and will identify any firms acting as underwriters, dealers or
agents in connection with the offering, including:
- the name or names of any underwriters;
- the purchase price of the securities and the proceeds to selling
stockholders from the sale;
- any underwriting discounts and other items constituting underwriters'
compensation;
- any public offering price;
- any discounts or concessions allowed or reallowed or paid to dealers;
and
- any securities exchange or market on which the securities offered in
the prospectus supplement may be listed.
Only those underwriters identified in such prospectus supplement are deemed
to be underwriters in connection with the securities offered in the prospectus
supplement.
In connection with the sale of the securities, underwriters, dealers or
agents may be deemed to have received compensation from a selling stockholder in
the form of underwriting discounts or commissions and also may receive
commissions from securities purchasers for whom they may act as agent.
Underwriters may sell the securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters or commissions from the purchasers for whom they may act as
agent. Some of the underwriters, dealers or agents who participate in the
securities distribution may engage in other transactions with, and perform other
services for, a selling stockholder and its affiliates in the ordinary course of
business.
Underwriters, dealers and agents participating in the securities
distribution may be deemed to be underwriters, and any discounts and commissions
they receive and any profit they realize on the resale of the securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters and their controlling persons, dealers and agents may be entitled,
under agreements entered into with a selling stockholder, to indemnification
against and contribution toward specific civil liabilities, including
liabilities under the Securities Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with the Securities and Exchange Commission,
which means we can satisfy our legal obligations to disclose important
information contained in those documents by referring you to them. The
information included in the following documents is incorporated by reference and
is considered part of this prospectus. More recent information that we file with
the Securities and Exchange Commission automatically updates and supersedes any
inconsistent information contained in prior filings.
-15-
<PAGE>
The documents listed below have been filed under the Exchange Act with the
Securities and Exchange Commission and are incorporated by reference:
(a) Our annual report on Form 10-K for the fiscal year ended December 31,
1999.
(b) Our quarterly report on Form 10-Q for the quarterly period ended March
31, 2000.
(c) The description of our common stock contained in the our registration
statement on Form 8-A filed under Section 12 of the Exchange Act,
including any amendments or reports filed for the purpose of updating
such description.
(d) A current report on Form 8-K filed by us on July 26, 2000.
We also incorporate by reference all documents subsequently filed by us
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the
offering of the shares of common stock under this prospectus is completed. You
may request a copy of these filings, at no cost, by writing or telephoning us at
WorldGate Communications, Inc., 3190 Tremont Avenue, Trevose, Pennsylvania,
19053, attn: Secretary, telephone: (215) 354-5100.
ADDITIONAL INFORMATION
----------------------
We have filed a registration statement on Form S-3 with the Securities and
Exchange Commission registering the shares of our common stock that are being
offered by this prospectus. This prospectus is a part of the registration
statement and, as the Securities and Exchange Commission rules permit, does not
contain all of the information that stockholders can find in the registration
statement or the exhibits to the registration statement.
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the Securities and Exchange Commission's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Securities and Exchange Commission's regional offices in New York (7 World Trade
Center, Suite 1300, New York, New York 10048) and Chicago (Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois, 60661-2511). In addition,
registration statements and certain other filings made with the Securities and
Exchange Commission through its "EDGAR" system are publicly available through
the Securities and Exchange Commission's Web site on the Internet located at
http://www.sec.gov. This registration statement, including all exhibits, has
been filed with the Securities and Exchange Commission through EDGAR. Reports,
proxy and information statements and other information concerning us can be
inspected at the offices of the Nasdaq National Market, 1735 K Street, N.W.,
Washington, D.C. 20006-1506.
LEGAL MATTERS
-------------
The validity of the shares of common stock offered by this prospectus will
be passed upon for us by Drinker Biddle & Reath LLP, Berwyn, Pennsylvania.
EXPERTS
-------
The consolidated financial statements incorporated into this prospectus by
reference to the annual report on Form 10-K for the year ended December 31, 1999
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
-16-
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by WorldGate Communications, Inc. This prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, the securities offered hereby to
any person in any state or other jurisdiction in which such offer or
solicitation is unlawful. Neither the delivery of this prospectus nor any sale
made hereunder shall, under any circumstances, imply that information contained
herein is correct as of any time subsequent to its date or that there has not
been any change in the facts set forth in this prospectus or in our affairs
since the date hereof.
TABLE OF CONTENTS
-----------------
PAGE
----
PROSPECTUS SUMMARY ............................................................2
RISK FACTORS ..................................................................3
USE OF PROCEEDS ..............................................................11
SELLING STOCKHOLDERS .........................................................13
PLAN OF DISTRIBUTION .........................................................15
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE .....................................................15
ADDITIONAL INFORMATION .......................................................16
LEGAL MATTERS ................................................................16
EXPERTS ......................................................................16
WORLDGATE COMMUNICATIONS, INC.
1,531,211 SHARES OF COMMON STOCK
...........................................
PROSPECTUS
..........................................
July 28, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC registration fee..................................................$ 9,815.00
Printing fees.........................................................$ 1,000.00
Legal fees and expenses...............................................$50,000.00
Accounting fees and expenses..........................................$ 5,000.00
Blue Sky fees and expenses (including legal fees).....................$ 5,000.00
Miscellaneous fees and expenses.......................................$ 4,185.00
TOTAL........................................................$75,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant's Certificate of Incorporation, as amended, currently states
that a director of the registrant shall have no personal liability to the
registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director except to the extent that Section 102(b)(7) (or any successor
provision) of the Delaware General Corporation Law, as amended from time to
time, expressly provides that the liability of a director may not be eliminated
or limited. No amendment or repeal of this provision shall apply to or have any
effect on the liability or alleged liability of any director of the registrant
for or with respect to any acts or omissions of such director occurring prior to
such amendment or repeal.
The registrant's Bylaws require the registrant to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that such person is or was a director or
officer of the registrant, or is or was serving while a director or officer of
the registrant at its request as a director, officer, employee, agent, fiduciary
or other representative of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines, excise taxes and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding to the full extent permissible under Delaware law. Any person
claiming indemnification as provided in the Bylaws shall be entitled to advances
from the registrant for payment of the expenses of defending actions against
such person in the manner and to the full extent permissible under Delaware law.
On the request of any person requesting indemnification under such provisions,
the Board of Directors of the registrant or a committee thereof shall determine
whether such indemnification is permissible or such determination shall be made
by independent legal counsel if the Board or committee so directs or if the
Board or committee is not empowered by statute to make such determination. The
indemnification and advancement of expenses provided by the Bylaws shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any insurance or other agreement,
vote of shareholders or disinterested directors or otherwise, both as to actions
in their official capacity and as to actions in another capacity while holding
an office, and shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of such person. The registrant shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the registrant or is or was serving at its request
as a director, officer, employee, agent, fiduciary or other representative of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against any liability asserted against him and incurred by him
in any such capacity, or arising out
<PAGE>
of his status as such, whether or not the registrant would have the power
to indemnify him against such liability under the provisions of the Bylaws. The
duties of the registrant to indemnify and to advance expenses to a director or
officer provided in the Bylaws shall be in the nature of a contract between the
registrant and each such director or officer, and no amendment or repeal of any
such provision of the Bylaws shall alter, to the detriment of such director or
officer, the right of such person to the advancement of expenses or
indemnification related to a claim based on an act or failure to act which took
place prior to such amendment, repeal or termination. Delaware law also permits
indemnification in connection with a proceeding brought by or in the right of
the registrant to procure a judgment in its favor. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers or persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in that Securities Act and is therefore unenforceable. The
registrant has directors and officers liability insurance.
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
4.1 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and ACC Operations, Inc., dated as of July
24, 2000. *
4.2 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and Charter Communications Holding Company,
LLC, dated as of July 24, 2000. *
4.3 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and Comcast Programming Holdings, Inc.,
dated as of July 24, 2000. *
4.4 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and Cox Communications Holdings, Inc.,
dated as of July 24, 2000. *
5.1 Opinion of Drinker Biddle & Reath LLP. *
23.1 Consent of PricewaterhouseCoopers LLP. *
23.2 Consent of Drinker Biddle & Reath LLP (included in Exhibit 5.1). *
24 Power of Attorney (included in signature page). *
* Filed herewith
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that:
(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) the
Securities Act;
(ii) To reflect in the prospectus any facts or events which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increases or decreases 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 and of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than
a 20% change in the maximum offering
<PAGE>
price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any additional or changed material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement.
(2) 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 therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) For purposes of determining any liability under the Securities Act of
1933, each filing of registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act of 1934 (and, where applicable, each filing an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein and the offering of such securities at the time shall be deemed to be
the initial BONA FIDE offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 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 or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Trevose, Pennsylvania, on July 28, 2000.
WORLDGATE COMMUNICATIONS, INC.
By: /s/ HAL M. KRISBERGH
---------------------------
Hal M. Krisbergh
Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Hal M. Krisbergh, James V. Agnello or
Randall J. Gort, the true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for the undersigned and in the name, place
and stead of the undersigned, in any and all capacities to sign any and all
amendments (including, without limitation, post-effective amendments) to this
Registration Statement on Form S-3 and any registration statement to which the
prospectus contained herein relates and any registration statement filed under
Rule 462 under the Securities Act, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises as fully to all intents and purposes as the undersigned might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or substitute or substitutes of the undersigned, may
lawfully do or cause to be done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Date: July 28, 2000 /s/ HAL M. KRISBERGH
---------------------
Hal M. Krisbergh
Chairman of the Board of Directors and
Chief Executive Officer
(Principal Executive Officer)
Date: July 28, 2000 /s/ JAMES V. AGNELLO
---------------------
James V. Agnello
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: July 28, 2000 /s/ DAVID E. WACHOB
---------------------
David E. Wachob
Director, Vice President and
General Manager
Date: July 28, 2000 /s/ THOMAS BAXTER
---------------------
Thomas Baxter
Director
Date: July 28, 2000 /s/ MARCIA J. HOOPER
---------------------
Marcia J. Hooper
Director
Date: July ___, 2000
---------------------
Alan Gerry
Director
Date: July ___, 2000
---------------------
Ronald A. Walter
Director
Date: July ___, 2000
---------------------
Clarence Irving
Director
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
4.1 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and ACC Operations, Inc., dated as of July
24, 2000. *
4.2 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and Charter Communications Holding Company,
LLC, dated as of July 24, 2000. *
4.3 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and Comcast Programming Holdings, Inc.,
dated as of July 24, 2000. *
4.4 Common Stock Purchase Agreement, by and between WorldGate
Communications, Inc. and Cox Communications Holdings, Inc., dated
as of July 24, 2000. *
5.1 Opinion of Drinker Biddle & Reath LLP. *
23.1 Consent of PricewaterhouseCoopers LLP. *
23.2 Consent of Drinker Biddle & Reath LLP (included in Exhibit 5.1). *
24 Power of Attorney (included in signature page). *
* Filed herewith
