SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): August 11, 2000
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VALUE AMERICA, INC.
(Exact name of registrant as specified in its charter)
Virginia 000-25689 33-0712568
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
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1560 Insurance Road
Charlottesville, Virginia 22911
(Address of principal executive offices, including zip code)
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Registrant's telephone number, including area code: (804) 817-7700
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ITEM 3 (a). BANKRUPTCY OR RECEIVERSHIP.
On August 11, 2000, the Company filed a voluntary petition to
reorganize under Chapter 11 of the Federal Bankruptcy Code in the U.S.
Bankruptcy Court for the Western District of Virginia, Lynchburg Division, Case
# 00-02269-WA under Judge Anderson and U.S. Trustee, James Cosby. The Company
issued a press release on August 11, 2000 announcing the filing (attached as
Exhibit 99.1 hereto).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 99.1 Press release dated August 11, 2000
pertaining to filing of voluntary
reorganization under Chapter 11.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
VALUE AMERICA, INC.
By: /s/ Michael J. Waide
Michael J. Waide
Chief Financial Officer
August 28, 2000
<PAGE>
Exhibit 99.1
For Release - Friday, August 11, 2000
Value America Files for Chapter 11 Protection
to Restructure as Electronic Services Business
CHARLOTTESVILLE, Va.--Value America, Inc. (NASDAQ:VUSA - www.VA.com) announced
today that it has filed and will reorganize its business under the protection of
a Chapter 11 bankruptcy proceeding. The filing was made in the federal
bankruptcy court for the Western District of Virginia. The Company also
announced that it has discontinued its e-retailing operations and undertaken a
reduction in force to concentrate on the development of its electronic services
business.
The electronic services business involves operating an infrastructure system for
third party manufacturers, vendors and distributors to enable them to fulfill
online orders from consumers, arrange for payment, and deliver goods and
products to the consumer, through the use of the Internet.
Glenda Dorchak, Chairman and CEO said, "The decision to shut down our Internet
retailing business was difficult. Despite tremendous efforts on the part of our
employees and the loyalty of our vendors and customers, it has become apparent
that the prospect for near term profitability of a company engaged exclusively
in the retail side of the electronic commerce industry is not assured." As part
of the shutdown today, the Company terminated 185 employees involved in its
retailing operations.
According to Dorchak, "The Chapter 11 filing will protect the interest of our
many stakeholders and should ensure that our electronic services business has an
opportunity to develop and move forward. After careful consideration, and
despite our good faith efforts, we were unable to establish to our satisfaction
that our Internet retailing operation would become profitable within a
reasonable time frame. However, we believe the Company has one of the most
sophisticated and commercially viable technology infrastructure backbones in
e-commerce today. We also believe that it will prove valuable to other companies
who want to launch an e-commerce solution of their own on the Internet."
With the help of outside consultants, the Company said it has conducted
extensive market research to understand how other companies, embarking on their
own e-commerce solutions, could deploy Value America's experience, processes and
technology. The Company also said it subjected its e-services business plan to
due diligence reviews by potential commercial partners and received favorable
feedback. The Company intends to continue with its e-services development
efforts during the Chapter 11 proceeding. Unlike other dot.com companies that
have recently filed for bankruptcy protection, Value America said it expected
its electronic services business would emerge, on a stand-alone basis, from the
reorganization filing and restructuring efforts.
Potential investors and acquirers already have expressed interest in the
electronic services business proposition, the Company announced. Dorchak said,
"We are hopeful that this filing will give Value America the breathing room it
needs to further enhance the value of our technology and infrastructure assets
and further explore opportunities for our electronic services business."
About Value America
Value America, Inc. (www.VA.com), based in Charlottesville, Virginia, was a
pioneer in online retailing, bringing features of bricks and mortar to Internet
commerce in an inventory-less model. It offers its technological and logistical
expertise in e-commerce to manufacturers, content providers, and bricks and
mortar retailers looking to come online, and to companies that have been
unsuccessful in launching their own e-commerce operations.
Forward Looking Statements
This news release contains statements of a forward-looking nature relating to
the future events or the future financial results of Value America, including
the Company's ability to develop its electronic services business and the
ability of the Company's e-services assets to survive the Chapter 11 filing.
Investors are cautioned that such statements are only predictions or represent
expectations by the Company, and that actual events or results may differ
materially. In evaluating such statements, investors should specifically
consider carefully various factors that could cause actual events or results to
differ materially from those indicated from such forward-looking statements.
Among other factors, consideration should include the Company's ability to
succeed in its transition to the electronic fulfillment business, close the
electronic retail business, and achieve cost savings and efficiencies
contemplated from the transition plan and reduction in force. Investors should
consider these and other risk factors described more fully in Value America's
filings with the Securities and Exchange Commission including those on Forms
S-1, S-3, 10-K, 10-Q and 8-K.
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Value America Media Contacts:
Investors: Media:
Michael Waide Michelle Ross
(804) 951-4272 202) 973-3614
[email protected] [email protected]
