As filed with the Securities and Exchange Commission on June 12, 2000
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------------
VALUE AMERICA, INC.
(Exact name of registrant as specified in its charter)
Virginia 5999 33-0712568
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification
organization) Code Number)
------------------------
337 West Rio Road
Charlottesville, Virginia 22901
(804) 817-7700
(Address,including zip code, and telephone number, including area code
of registrant's principal executive office)
------------------------
Michael J. Waide
Executive Vice President and Chief Financial Officer
Value America, Inc.
337 West Rio Road
Charlottesville, Virginia 22901
(804) 817-7700
(Name, address, including zip code, and telephone number,
including area code of agent for service)
------------------------
Copies to:
Scott H. Richter, Esq.
LeClair Ryan, A Professional Corporation
707 East Main Street, 11th Floor
Richmond, Virginia 23219
(804) 783-2003
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If any of the 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 reinvestments 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(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [}
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CALCULATION OF REGISTRATION FEE
=================================== ============= ========================= ========================= =============
Title of each class of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered Registered offering price per share aggregate offering price registration
fee
----------------------------------- ------------- ------------------------- ------------------------- -------------
Common Stock, without par value 3,000,000 (1) $2.25 (2) $6,750,000 $1,782
=================================== ============= ========================= ========================= =============
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(1) Includes shares of common stock that may be issuable upon exercise of
certain warrants to purchase the Registrant's common stock. Pursuant to
Rule 416 promulgated under the Securities Act, this registration statement
also covers such indeterminable number of additional shares of common stock
as may become issuable upon exercise of the warrants as a result of future
stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act and based on the average of
the high and low sales prices of the common stock as reported on The Nasdaq
National Market on May 18, 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 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.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
VALUE AMERICA, INC.
___________ Shares of Common Stock
______________________
This prospectus relates to the public offer and sale of up to ___________
shares of our common stock by Acqua Wellington North American Equities Fund,
Ltd. _______ of the shares of our common stock subject to this prospectus may be
sold to Acqua Wellington pursuant to a common stock purchase agreement between
us and Acqua Wellington. _______ of the shares of our common stock subject to
this prospectus may be issued to Acqua Wellington upon exercise of warrants that
have been or that may be issued to Acqua Wellington pursuant to the common stock
purchase agreement. You should read this prospectus carefully before investing
in our common stock.
Value America's common stock trades on the Nasdaq National Market under the
symbol "VUSA". On __________, 2000, the last reported sale price of our common
stock was $ ______ per share.
______________________
This investment involves a high degree of risk. Please see "Risk Factors"
beginning on page 4 of this prospectus.
______________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ___________, 2000.
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Table of Contents
Page
About this Prospectus............................................ 2
Value America, Inc............................................... 3
About Our Common Stock Purchase Agreement........................ 3
Risk Factors..................................................... 4
Recent Developments.............................................. 10
Use of Proceeds.................................................. 11
Dividend Policy.................................................. 11
Selling Stockholder.............................................. 11
Plan of Distribution............................................. 16
Legal Matters.................................................... 18
Experts.......................................................... 18
Where You Can Find More Information.............................. 18
Statements Regarding Forward-Looking Information................. 19
______________________
About this Prospectus
Unless the context otherwise requires, the terms "we," "our," "us," "the
company" and "Value America" refer to Value America, Inc., a Virginia
corporation.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, Acqua Wellington, the selling stockholder may, from
time to time, sell up to _____________ shares of common stock in one or more
offerings. You should read both this prospectus and any prospectus supplement
together with additional information described under the heading "Where You Can
Find More Information."
2
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Value America, Inc.
Value America is an Internet retailer offering a wide selection of
technology, office, entertainment and consumer products through its online store
at www.valueamerica.com and www.va.com. We provide business, government and
individual customers with the best product selection, reliable service and
competitive prices. We derive our revenues primarily from sales of products and
services through our online store and telephone sales.
We incorporated in Nevada in March 1996 and reincorporated in Virginia in
October 1997. Our principal executive offices are located at 337 West Rio Road,
Charlottesville, Virginia 22901. Our telephone number is (804) 817-7700.
About Our Common Stock Purchase Agreement
We entered into a common stock purchase agreement with Acqua Wellington
North American Equities Fund, Ltd. to raise up to $60 million through a series
of sales of our common stock. The dollar amount of each sale is limited by our
common stock's trading price and a minimum period of time must elapse between
each sale. Each sale will be to Acqua Wellington. In turn, Acqua Wellington will
either sell our stock in the open market, place our stock through negotiated
transactions with other investors, or hold our stock in their own portfolio. See
"Plan of Distribution". This prospectus covers the resale of our stock by Acqua
Wellington either in the open market or to other investors.
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Key Facts
Shares being offered for resale to the public.............. [ ]
Total shares outstanding prior to [ ]
the offering...........................................
Total shares outstanding [ ]
after the offering.....................................
Total shares outstanding after the offering
and exercise of all options/warrants................... [ ]
Price per share to the public.............................. Market price at time of resale.
Total proceeds raised by None; however, up to $60 million may be received by
the offering........................................... Value America from Acqua Wellington under the common
stock purchase agreement and additional amounts may
be received by Value America from the exercise of
warrants. Our common stock purchase agreement with
Acqua Wellington is included as an exhibit to the
registration statement of which this prospectus is a
part.
Dividend policy............................................ No dividends expected.
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Risk Factors
An investment in the common stock involves a high degree of risk. You
should carefully consider the risks described below and the other information in
this prospectus, any supplement to this prospectus and the documents
incorporated by reference herein before investing in our common stock. Our
business and results of operations could be seriously harmed by any of the risks
described below. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of your investment.
We have a history of losses which we expect will continue, and we may not
be able to achieve profitability
We have a history of losses. The losses that we anticipate to continue in
the immediate future could sufficiently weaken us financially such that they
would prevent us from becoming profitable. There is a substantial risk that we
may not be able to generate sufficient funds from our operations, as we may be
unable to meet our sales and delivery goals and we cannot be sure that the
procedures and controls that we have instituted to insure product quality,
timely delivery and a high level of customer service will continue to succeed.
We have had a limited operating history and incurred net losses of $1.9 million
in 1997, $53.6 million in 1998, $143.5 million in 1999 and $27.4 million during
the three months ended March 31, 2000. We expect to continue to incur losses in
2000 and 2001 and may never generate sufficient revenues to achieve
profitability in the future. Even if we do achieve profitability, we may not
sustain or increase profitability on a quarterly or annual basis in the future.
Our prior inability to generate significant revenues and expected continued
losses has raised substantial doubt about our ability to continue as a going
concern (See next risk factor).
Our independent accountants have modified their report on our financial
statements to indicate that there is substantial doubt as to our ability to
continue as a going concern; our ability to continue our operations is not
assured and is subject to substantial risk; moreover, the existence of the going
concern modification may adversely affect our business prospects, financial
condition and results of operations and may harm our relationships with vendors
and customers as well as limit our ability to obtain financing
Doubt as to whether we will be able to continue as a going concern and the
going concern modification in the audit report on our financial statements could
have a significant negative impact on us. Our auditors have included a going
concern modification in their audit report on our financial statements for the
year ended December 31, 1999, because at the time that the auditors rendered
their report, it was evident that we needed to raise additional capital, as we
did not have an amount of funds sufficient to continue operations at
then-current levels for the next twelve months and we lacked a history of
operations that would adequately suggest that our financial plans would succeed.
If at the time the auditors issue their future reports, we do not have working
capital sufficient to finance our operations for the succeeding twelve months at
the then current levels and we do not have a significant increase in orders for
our product offerings that would suggest we could readily achieve our growth
plans and, thus, generate the necessary funds, it is likely that our auditors
will include such a modification in those audit reports. We cannot assure you
that steps taken by management will result in the removal of our auditor's going
concern modification from any future reports. The risk that our auditors will
include a going concern modification in their next audit report is increased by
the likelihood that in order to further implement our business plan we will need
to raise additional funds from debt and equity offerings. Customers and vendors
may choose not to conduct business with us, or may conduct business with us on
terms that are less favorable than those customarily extended by them, as a
result of questions concerning our status as a going concern. Furthermore, if
our gross margins do not exceed our costs for an extended period, we may need to
reorganize or reach agreements with our creditors concerning the conduct of our
future business and affairs.
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We may be unable to obtain the additional financing we need
In December 1999, our board of directors formed a special committee to
explore strategic opportunities for the company. These opportunities might
include, but are not limited to, investments in Value America by new investors,
additional investments by current investors and a secondary public offering of
stock. On May 10, 2000, we entered into two equity financing arrangements - one
for the sale of $30 million in preferred stock to certain current stockholders
and others, and the other with Acqua Wellington for up to $60 million in common
stock, subject to certain conditions stated in this prospectus. While we raised
approximately $29 million, net of expenses, in the preferred stock placement, we
will require additional funds to finance our operations for the next twelve
months. We are still actively pursuing financial opportunities. There can be,
however, no assurance that such efforts will be successful. In addition, we may
be unable to obtain sufficient additional financing on favorable terms, or at
all. If we raise additional funds by selling our equity securities, the relative
ownership of our existing investors could be diluted or the new investors could
obtain terms more favorable than those of our existing investors. If we cannot
obtain sufficient financing, we may have to delay, reduce or eliminate our
marketing and promotion campaign, which could significantly limit our revenues.
Exercise of outstanding warrants and conversion of preferred stock, or issuance
of other securities in the future, would dilute existing stockholders
As of June 9, 2000, we have 14,778,322 shares of Series D preferred stock
outstanding, which are convertible into the same number of shares of common
stock. In addition, we have outstanding warrants to purchase an aggregate, as of
June 9, 2000, of 5,594,288 shares of common stock outstanding. We also have
entered into a common stock purchase agreement with Acqua Wellington under which
we could issue up to $60,000,000 in common stock as well as warrants to purchase
additional shares of common stock. The holders of common stock could experience
substantial dilution to their investment upon conversion of the preferred
shares, exercise of the warrants, or drawdowns under the common stock purchase
agreement. The aggregate dollar value of the shares of common stock issuable
pursuant to the common stock purchase agreement depends in part on future prices
of our common stock on The Nasdaq National Market. The number of shares of
common stock, and number of warrants, actually issued pursuant to the common
stock purchase agreement depends on the prices of common stock on The Nasdaq
National Market shortly before the date of issuance and sale. We cannot predict
the price of the common stock in the future. Our board of directors may
authorize the sale of additional shares of common stock or other equity
securities that are convertible into common stock without any action by our
stockholders subject to the aggregate amount of common and preferred stock
authorized by our stockholders. The issuance and conversion of any such
preferred stock or equity securities would further dilute the percentage
ownership of our stockholders.
5
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If we do not continue to improve our operational systems and customer service
capabilities, we could lose customers and damage our reputation
To support an increase in purchase volume, we must continue to improve
delivery tracking systems, provide additional customer service and efficiently
handle returns. Otherwise customers could cancel orders or decide not to shop at
Value America's store in the future. If we fail to establish and use reliable
electronic data interchange, or EDI, connections with vendors, we could
experience delays in product fulfillment, which could lead to customer
dissatisfaction and harm our business. We may not be able to integrate onto our
EDI platform all of our current and prospective vendors. To date a significant
portion of our business depended upon telephone ordering. We have had periods
during which our employees were unable to meet targeted response or
otherwise to respond satisfactorily to customers.
If our online store became unavailable, we could lose customers
We could lose existing or potential customers if they do not have ready
access to our online store or if our online store, transaction processing
systems, credit card processors and computer systems do not perform reliably and
to our customers' satisfaction. In addition, network interruptions or other
computer system shortcomings, such as inadequate capacity, could:
o prevent customers from accessing the online store,
o reduce our ability to fulfill orders,
o reduce the attractiveness of our product offerings,
o reduce the number of products sold,
o cause customer dissatisfaction or
o seriously damage our reputation.
We have experienced brief computer system interruptions in the past, which
may recur from time to time. If traffic through our online store were to
increase substantially, we may need to expand and upgrade our technology. We may
be unable to predict accurately changes in the volume of customer traffic and
therefore expand and upgrade systems and infrastructure in time to avoid system
interruptions. All of our computer and communications equipment is in
Charlottesville, Virginia. This equipment is vulnerable to interruption or
damage from fire, flood, power loss, telecommunications failure and earthquake,
and some system components do not have immediate automatic backup equipment. Our
computer and communications systems may be vulnerable to computer viruses,
physical or electronic break-ins and other disruptions. Our property damage and
business interruption insurance provide adequate coverage for any such loss that
we may suffer.
We may be unable to attract customers and process sales if we do not maintain
and build relationships with manufacturers, vendors and other third parties
6
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We may be unable to offer a desirable selection of merchandise, attract
customers and process sales if management does not maintain and build
relationships with manufacturers, vendors and other third parties. We are
entirely dependent upon manufacturers and distributors to provide merchandise
for sale in our online store. In the year ended December 31, 1999, goods
manufactured by IBM represented approximately 27% of net sales and goods
manufactured by Proteva represented approximately 21% of net sales. In addition,
vendors may decide, for reasons outside our control, not to offer particular
products for sale on the Internet. We rely on product vendors to fulfill a
number of traditional retail functions, such as maintaining inventory, accepting
product returns and preparing merchandise for shipment to individual customers.
Our vendors may not be willing to provide these services at competitive rates or
to develop the communication technology necessary to support our direct shipment
infrastructure. We have no effective means to ensure that our vendors will
perform these services to our satisfaction.
Our vendors have no obligation to make any products available for sale to
our customers and may terminate their relationships with us at any time without
penalty. A vendor with limited inventory may not give us priority in allocating
its available inventory or take action that may preclude us from offering our
customers merchandise on the best terms. Our credit card provider may cancel our
credit card processing agreement if we do not meet certain terms and conditions,
including financial viability. There is no guarantee that we will meet all terms
in the agreement and, if the agreement with our credit card processor
terminates, it would significantly harm our ability to do business. Our
operations also depend heavily upon a number of other third parties, including
Internet service providers and product delivery services. We cannot control the
actions of these third parties, and we do not have long-term contractual
relationships with any of them. We also use third-party delivery services to
deliver all of our products to customers. Increases in delivery costs or
inefficient delivery as a result of strikes or other reasons could seriously
harm our profitability.
Customers may be unwilling to use the Internet to purchase goods
Our long-term future depends heavily upon the general public's willingness
to use the Internet as a means to purchase goods. The failure of the Internet to
develop into an effective commercial tool would seriously damage our operations.
In addition, delays in the development or adoption of new standards and
protocols or increased governmental regulation could stop or delay the growth of
the Internet as a means to purchase goods and services. Other considerations,
including security, reliability, accessibility and quality of service, may
adversely affect the growth of the Internet. These considerations have not been,
and may never be, resolved to the satisfaction of many potential Internet
customers.
We face intense competition from many participants in the electronic commerce
industry
The electronic commerce industry is intensely competitive and we expect
competition in the industry to increase. Barriers to entry into the electronic
commerce market are relatively low. Moreover, all of the products that we sell
in our online store are available through traditional retail outlets.
Accordingly, we must compete with both companies in the electronic commerce
market and in the traditional retail industry. A number of Internet companies
offer search engines and other tools that locate multiple vendors of particular
products. The pervasive use of these search engines could result in severe price
competition and could reduce our revenues and result in increased losses or
reduced profits.
7
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If our common stock fails to maintain Nasdaq's required minimum market price or
we fail to meet other Nasdaq requirements, our common stock could be delisted
from the Nasdaq national market, become less easily tradable and decline in
value
If our stock price declines or if we continue to experience losses from our
operations, we may not be able to maintain the standards required for continued
listing on the Nasdaq National Market. Delisting would eliminate the substantial
benefit currently enjoyed by holders of our common stock of being able to easily
buy or sell our common stock because our common stock is listed on the Nasdaq
National Market. For continued listing of our common stock on the Nasdaq
National Market, we must, among other things, maintain a minimum bid price of at
least $5.00 per share. In May 2000, our stock price declined to $1.4531 per
share. As of ____________, 2000 our stock price was $_____ per share. In the
event our common stock is removed from the Nasdaq National Market, any trading
in our common stock might then be conducted on the Nasdaq SmallCap Market, which
is a significantly less active market than the Nasdaq National Market. As a
result, a shareholder could find it more difficult to dispose of our common
stock.
Furthermore, if we did not qualify for listing on the Nasdaq SmallCap
Market or if our common stock was subsequently delisted from the Nasdaq SmallCap
Market, our common stock could be subject to the rules and regulations under the
Securities Exchange Act of 1934 relating to "penny stocks," which impose
additional requirements on broker-dealers who sell such securities to persons
other than established customers and certain institutional investors. For
transactions covered by the penny stock rules, a broker-dealer must, among other
things, make a special suitability determination for the purchaser and have
received the purchaser's written consent to the transaction prior to sale.
Brokers effecting transactions in a penny stock are also subject to customer
disclosure and record keeping obligations. Consequently, if we fail to qualify
for listing on, or if we were removed from, the Nasdaq SmallCap Market, the
ability or willingness of broker-dealers to sell or make a market in our common
stock could decline.
Security risks of electronic commerce may discourage customers from purchasing
goods from us
In order for the electronic commerce market to develop successfully, we and
other market participants must be able to transmit confidential information
securely over public networks. Third parties may have the technology or know-how
to breach the security of our customer transaction data. Any such breach could
cause customers to lose confidence in the security of our online store and
choose not to shop at our online store. We expect that we will need to dedicate
substantial resources to prevent or remedy any security breach. Concerns about
the security and privacy of transactions over the Internet could inhibit the
growth of the Internet and electronic commerce. Our security measures may not
effectively prohibit others from obtaining improper access to the information in
our online store which could expose us to risks of liability and seriously
disrupt our operations.
Our management and directors own a significant portion of our voting stock, and
they may take actions as stockholders that reduce the market price of our stock
Our executive officers, directors and related entities own a large enough
stake in us to have an influence on the matters presented to stockholders. As of
June 9, 2000, they owned 7,655,958 shares, or approximately 16.8% of our
outstanding common stock and 9,359,595 shares, or approximately 63.3% of our
outstanding Series D preferred stock. Holders of our common stock and preferred
stock vote as a single class and, as a result, executive officers and directors
control approximately 28.2% of the outstanding voting stock. In addition,
warrants and stock options to purchase an aggregate of 5,087,359 shares of
common stock are held by our directors, executive officers and related entities.
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If all such warrants and stock options were exercised, the directors and
executive officers would own or control approximately 25.2% of outstanding
common stock, or approximately 33.8% of our voting stock. As a result, these
shareholders may have the ability to significantly affect all matters requiring
shareholder approval, including the election and removal of directors, the
approval of significant corporate transactions, such as any merger,
consolidation or sale of all or substantially all of our assets, and the control
of our management and affairs. Accordingly, such concentration of ownership may
have the effect of delaying, deterring or preventing a change in control of
Value America, impede a merger, consolidation, takeover or other business
combination involving us or discourage a potential acquirer from making a tender
offer or otherwise attempting to obtain control of Value America which in turn
could have an adverse effect on the market price of our common stock.
Administrative burdens of collecting additional taxes may hinder our ability to
operate
We do not currently collect sales or use taxes for the sale of goods into
states other than Virginia. If we establish operations in other states, we may
need to collect sales and use taxes imposed by those states. Other governmental
authorities may require us to collect taxes for sales into the areas they
control. These taxes could discourage customers from making purchases through
our online store. If any additional governmental authorities require us to
collect and remit taxes, the administrative burdens could be cumbersome and
expensive.
We may be unable to protect our proprietary technology
Our success depends to a significant degree upon protection of our software
and other proprietary intellectual property rights. We may be unable to deter
misappropriation of our proprietary information, detect unauthorized use and
take appropriate steps to enforce our intellectual property rights. Our
competitors could, without violating our proprietary rights, develop
technologies that are as good as or better than our technology. We have
registered various forms of the "Value America" service mark in the United
States for limited uses and have applied to register another form of that
service mark in the United States. Our application could be denied, and issued
registrations could be challenged. The legal protection for these service marks
that we are able to obtain may not be sufficient for our business purposes. For
example, other companies could use the name "Value America" and similar names to
identify their products and services. Any such use could confuse our customers
and impair our ability to build our brand identity. If we are unable to protect
the name "Value America" or any of the other names that we use, our business
could suffer serious harm. On March 24, 1999, a party filed a lawsuit against us
alleging violations of federal trademark law, state law and common law. The
party seeks monetary damages, an injunction barring use of the "Value America"
mark and cancellation of our trademark registration for the "Value America"
mark. Because the protection of intellectual property rights is often critically
important to the success of companies in the industry, our competitors or others
could assert additional claims that our use of proprietary rights or our
technologies infringe their proprietary rights. We may not have the resources to
pursue any litigation to a final judgment and may not prevail in such
litigation. In defending such litigation, we have incurred significant legal and
other expenses and our management at times has been distracted from the
principal business operations. If any party making a claim against us were to
prevail in litigation against the company, we may have to pay substantial
damages. The court could also grant injunctive or other equitable relief that
could prevent us from offering our products and services without a license or
other permission from others.
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The loss of key personnel, or the inability to retain highly skilled personnel,
could adversely affect our business
We are dependent on the principal members of our management and information
technology staff. The loss of our management and key information technology
employees could have an adverse effect on our business. In addition, we believe
that our future success will depend in large part upon our ability to motivate
and retain our highly skilled information technology and managerial personnel.
We cannot assure that we will be successful in retaining the personnel we
require. The failure to retain such personnel could adversely affect us.
Government regulation and legal uncertainties may hinder our ability to operate
Application of existing laws to the Internet, particularly with respect to
property ownership, the payment of sales or use taxes, libel, and personal
privacy, is uncertain and may take years to resolve. Growth and development of
electronic commerce may also prompt calls for more stringent consumer protection
laws. These laws may impose additional burdens on companies conducting business
over the Internet.
Virginia Law and our charter documents contain anti-takeover and indemnification
provisions that may depress the market price of our common stock
Virginia corporate law and our charter documents contain certain provisions
that could delay or prevent a change of control or a merger or other form of
takeover that our stockholders might find attractive. Certain of these
provisions:
o provide for a staggered board of directors, under which it would take
three successive annual meetings to replace all directors.
o restrict the ability of our stockholders to remove our directors and
require our stockholders to provide us advance notice if they intend t
nominate individuals to serve as directors or if they intend to propose
matters for our stockholders to act upon at a meeting.
These provisions could limit the price that investors will pay for shares of our
common stock.
Our charter documents require us to indemnify our executive officers and
directors against certain liabilities and expenses that they may incur while
defending lawsuit brought against them as executive officers and directors for
their acts or omissions on our behalf.
Recent Developments
Effective May 10, 2000, we entered into a preferred stock purchase
agreement with certain existing stockholders of Value America and other
investors. Pursuant to the agreement, we have issued 14,778,322 shares of Series
D preferred stock and warrants to purchase 4,433,497 shares of our common stock.
The new issue of preferred stock entitles the holders to convert the preferred
stock into shares of common stock on a one-for-one basis at a conversion price
equal to (a) Value America"s closing stock price of $2.03 on May 9, 2000, if the
holder converts no later than November 16, 2001, or (b) after November 16, 2001
at $2.34 per share, a 15 percent premium over the May 9 closing price. The
warrants have an exercise price of $2.44, a 20 percent premium over the May 9
closing price of our common stock.
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Use of Proceeds
We will not receive any proceeds from the sale of common stock by Acqua
Wellington. However, we will receive proceeds from the sale of shares of common
stock to Acqua Wellington under the common stock purchase agreement. We may
receive additional amounts if Acqua Wellington exercises the warrants to
purchase our common stock.
We intend to use the net proceeds from the sale of our common stock to
Acqua Wellington for working capital and other general corporate purposes. We
have not identified specific uses for the net proceeds, and our management will
have broad discretion in the application of the net proceeds. Pending such uses,
we intend to invest the net proceeds in short-term, investment-grade,
interest-bearing securities.
Dividend Policy
We have not paid cash dividends on our common stock. We anticipate that we
will continue to retain any earnings for use in the operation of our business
and we do not currently intend to pay dividends.
Selling Stockholder
The following table sets forth information with respect to Acqua Wellington
as of ____________, 2000 and the shares of common stock beneficially owned by
Acqua Wellington and the shares of common stock underlying warrants issued to
Acqua Wellington that may be offered pursuant to this prospectus. Acqua
Wellington has sole voting and investment power with respect to its securities.
This information has been obtained from Acqua Wellington.
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Shares Shares Available Number of Shares
Beneficially for Sale Under Owned After the
Owned Warrants this Prospectus Offering
Acqua Wellington
North American -0- 250,000
Equities Fund, Ltd.
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Note regarding common stock and warrants
The information relating to the number of shares underlying the warrants
assumes exercise as of ___________, 2000. The warrants were acquired in
connection with the common stock purchase agreement.
Notes regarding number of shares available for sale under this prospectus
The number of shares to be sold to Acqua Wellington and the warrants to be
issued to Acqua Wellington under the common stock purchase agreement cannot be
predicted by us at this time. Consequently, the number of shares to be offered
by Acqua Wellington as set forth in the table and available for sale under this
prospectus represents an estimate. The actual number of shares of common stock
issuable under the agreement could be materially less or more.
11
<PAGE>
In the future, Acqua Wellington may obtain additional shares of our common
stock that it may desire to offer for sale. The number of shares it may obtain
is presently indeterminable. See "-- Relationships between the selling
stockholder and us."
Note regarding number of shares owned after offering
Because Acqua Wellington may offer all, some or none of its common stock,
we cannot provide a definitive estimate of the number of shares that Acqua
Wellington will hold after the offering. Acqua Wellington may also acquire
additional shares of common stock and warrants pursuant to the common stock
purchase agreement from time to time after a specified sale. The shares
beneficially owned after the offering column assumes the sale of all shares
offered.
Relationships between the selling stockholder and us
The selling stockholder has not held any position or office and has not had
any other material relationship with Value America or any of our affiliates
within the past three years other than as a result of its ownership of shares of
our securities. This information is based upon information provided by Acqua
Wellington.
Common Stock Agreement
On May 10, 2000, we entered into a common stock purchase agreement with
Acqua Wellington North American Equities Fund, Ltd., the selling stockholder, in
which we have agreed to sell and Acqua Wellington has agreed to purchase, shares
of our common stock, and warrants to purchase our common stock, subject to the
terms and conditions described below. The agreement allows us, in our sole
discretion, to give Acqua Wellington up to 12 monthly draw down requests during
a 15 1/2 month period after the effective date of the registration statement of
which this prospectus is a part.
In order to request a draw down we must give Acqua Wellington a notice
specifying the draw down amount, the lowest price at which we will sell shares
of common stock to Acqua Wellington, which we will refer to as the threshold
price, and the date of commencement of the draw down period. Each draw down
period will consist of 20 consecutive trading days and there will be at least 5
trading days between successive draw down periods.
The maximum draw down amount that we are permitted to request with respect
to each draw down period and the applicable discount to market price at which
Acqua Wellington will be permitted to purchase shares of our common stock
depends upon the threshold price. If we set the threshold price:
o at $3, the maximum draw down amount will be $3 million and the discount
will be 93%;
o between $3 and $16, for every $1 increase in the threshold price, the
maximum draw down amount can be increased by us by up to $1 million and
the discount will be increased by .1%;
o between $3 and $1, for every $1 decrease in the threshold price, the
maximum draw down amount will be decreased by $1 million and the
discount will be 93%; and
o equal to or greater than $.35 but less than $1, the maximum draw down
amount will be $1 million and the discount will be 90%.
12
<PAGE>
The number of shares of our common stock to be purchased by Acqua
Wellington during any draw down period will be determined on a daily basis based
on the daily volume weighted average price of our common stock on the Nasdaq
National Market (or, if our common stock ceases to be traded on the Nasdaq
National Market, but is traded on the American Stock Exchange or the Nasdaq
Small Cap Market, or the OTC Bulletin Board if mutually agreed upon by us and
Acqua Wellington), as reported by Bloomberg Financial LP using the AQR function.
If the daily volume weighted average price for any trading day is less than the
threshold price, then Acqua Wellington will not be required to purchase that
day"s portion of the draw down amount.
Warrants
Acqua Wellington will receive draw down warrants to purchase a number of
shares of our common stock equal to 30% of the number of shares purchased during
each draw down period unless:
o the threshold price is above $10, in which case no warrants will be
issued, or
o the threshold price is less than $1, in which case Acqua Wellington
will receive draw down warrants to purchase a number of shares of our
common stock equal to 100% of the number of shares purchased during
such draw down period.
The draw down warrants will have a three year term and an exercise price equal
to 120% of the average purchase price at which shares of our common stock were
purchased during a draw down period if the threshold price was $1 or greater and
100% if the threshold price was less than $1. We can cause the expiration of 40%
of the outstanding draw down warrants issued when the threshold price was below
$1, upon 5 days' notice, if the daily volume weighted average price of our
common stock is above $4 for 10 consecutive trading days. No draw down warrants
will be issued until the number of shares of our common stock covered by the
draw down warrants would exceed 250,000.
Upon signing the agreement, we issued Acqua Wellington a warrant to
purchase 250,000 shares of our common stock with a three year term and an
exercise price equal to $2.35. This exercise price will be subject to adjustment
in the event that the exercise price of the first 250,000 draw down warrants
that would have been issued would have had a lower exercise price if they had
been issued. This warrant will become exercisable upon the earlier of September
14, 2000 and consummation of the first draw down and will not be subject to
rescission or cancellation by us even if we never request that Acqua Wellington
draw down any amounts.
Promptly after the effectiveness of the registration statement and before
the initial draw down request, we will also issue to Acqua Wellington two
warrants to purchase 750,000 shares of our common stock each, each with the
terms described below. We will issue additional warrants each to purchase
750,000 shares, quarterly, for up to three additional quarters. These warrants
will expire on the earliest of:
13
<PAGE>
o termination of the agreement,
o 90 days after the issue date and
o the date we shall have received $6,000,000 in the aggregate from the
exercise of all of these warrants.
One type of these warrants will have an exercise price equal to the greater of:
o $2.00 and
o 93% of the daily volume weighted average price of our common stock on
the date of exercise.
If the threshold price is equal to or greater than $2.00 and the daily volume
weighted average price of our common stock is equal to or greater than the
threshold price, we will have the right to require Acqua Wellington to exercise
this warrant to purchase up to 6,000 shares of our common stock on that trading
day.
The other type of these warrants will have an exercise price equal to the
greater of:
o $1.00 and
o 93% of the daily volume weighted average price of our common stock on
the date of exercise.
If the threshold price is set above $1.00 but below $2.00 on any trading day and
the daily volume weighted average price of our common stock is equal to or
greater than the threshold price, we will have the right to require Acqua
Wellington to exercise this warrant to purchase up to 24,000 shares of our
common stock on that trading day.
Conditions
Pursuant to the agreement, Acqua Wellington's obligation to accept a draw
down notice and to purchase shares upon a draw down and the exercise of the
Warrants is subject to the following conditions:
o Bring-down of representations and warranties and performance of
covenants;
o no material adverse effect on Value America;
o no injunction shall have been issued, or action commenced by a
governmental authority, prohibiting the purchase or the issuance of the
shares of our common stock;
o the registration statement shall have been declared effective and
remain in effect;
o the purchase of the shares of our common stock will not cause Acqua
Wellington's beneficial ownership to exceed 10% of the total number of
shares of our common stock outstanding; and
o the issuance of the shares of our common stock will not violate the
shareholder approval requirements of Nasdaq.
14
<PAGE>
Our obligation to issue shares of our common stock pursuant to a draw down
or upon exercise of any warrant is subject to the accuracy of Acqua Wellington's
representations and warranties and the performance by Acqua Wellington of its
covenants, no injunction having been issued or action commenced by a
governmental authority prohibiting the purchase or issuance of the shares of our
common stock and the issuance of the shares of our common stock not violating
the shareholder approval requirements of Nasdaq. Under Nasdaq rules, shareholder
approval is required before issuing securities equal to 20% or more of our
common stock if the securities are being issued for less than the greater of
book or market value.
Termination
The agreement may be terminated by Acqua Wellington upon the occurrence of
any of the following events:
o a material adverse effect on Value America;
o if we issue convertible debentures or enters into an equity financing
facility without Acqua Wellington's prior written consent;
o our common stock ceases to be registered under the Securities Exchange
Act of 1934, or listed or traded on any of the Nasdaq National Market,
American Stock Exchange or Nasdaq SmallCap Market (or the OTC Bulletin
Board, if mutually agreed upon by us and Acqua Wellington); or
o we require shareholder approval under the Nasdaq rules to issue
additional shares and that approval is not obtained within 60 days.
The agreement may also be terminated by mutual written consent of the parties.
Other Agreements
The agreement prohibits us from entering into another financing agreement
other than debt financings and specified equity financings during a draw down
period without the prior consent of Acqua Wellington. If Acqua Wellington
consents, it will have the option to purchase up to the same number of shares as
will be issued in the other financing at a price and on such terms as we would
issue shares during a draw down or at the price and on such terms contained in
the other financing or not to participate.
Acqua Wellington has agreed that, before and during the term of any draw
down period, neither it nor any of its affiliates or any entity managed by it
will be in a net short position with respect to shares of our common stock in
any accounts directly or indirectly managed by Acqua Wellington or any of its
affiliates or any entity managed by it. Acqua Wellington has also agreed not to
sell common stock on any trading day in excess of 25% of the day's trading
volume or in block lots or block trades.
15
<PAGE>
If we fail to deliver shares being purchased in a draw down or on exercise
of warrants on the applicable settlement date or exercise, and the failure
continues for 10 trading days, we will be required to pay, in cash or
unregistered common stock at the option of Acqua Wellington, as liquidated
damages, an amount equal to 2% of the draw down amount for that draw down
pricing period for the initial 30 days, and for each additional 30-day period
thereafter until the failure is cured.
Plan of Distribution
Acqua Wellington or its respective pledgees, donees, transferees or other
successors in interest may, from time to time, sell all or a portion of the
shares on The Nasdaq National Market, in privately negotiated transactions or
otherwise. Shares may be sold at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices related to such market prices
or at negotiated prices. The shares may be sold by Acqua Wellington by one or
more of the following methods, without limitation:
o block trades in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of that exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o privately negotiated transactions;
o short sales;
o through the writing of options on the shares;
o in one or more underwritten offerings on a firm commitment or best
effort basis; and
o a combination of any of these methods of sale.
In effecting sales, brokers and dealers engaged by Acqua Wellington may
arrange for other brokers or dealers to participate. Broker-dealers may agree
with Acqua Wellington to sell a specified number of such shares at a stipulated
price per share. To the extent such broker-dealer is unable to do so acting as
agent for Acqua Wellington, to purchase as principal any unsold shares at the
stipulated price. Broker-dealers who acquire shares as principals may thereafter
resell such shares from time to time in transactions on The Nasdaq National
Market at prices and on terms then prevailing at the time of sale, at prices
related to the then-current market price or in negotiated transactions.
Broker-dealers may use block transactions and sales to and through
broker-dealers, including transactions of the nature described above. Acqua
Wellington may also sell the shares in accordance with Rule 144 under the
Securities Act of 1933, rather than pursuant to this prospectus.
16
<PAGE>
From time to time, Acqua Wellington may pledge, hypothecate or grant a
security interest in some or all of the shares owned by it. The pledgees,
secured parties or persons to whom such securities have been hypothecated will,
upon foreclosure in the event of default, be deemed to be selling stockholders.
The number of Acqua Wellington's shares offered under this prospectus will
decrease as and when it takes such actions. The plan of distribution for Acqua
Wellington's shares will otherwise remain unchanged. In addition, subject to the
restrictions contained in the common stock purchase agreement, Acqua Wellington
may, from time to time, sell short our common stock, and in such instances, this
prospectus may be delivered in connection with such short sales and the shares
offered under this prospectus may be used to cover such short sales.
To the extent required under the Securities Act of 1933, the aggregate
amount of Acqua Wellington's shares of common stock being offered and the terms
of the offering, the names of any such agents, brokers, dealers or underwriters
and any applicable commission with respect to a particular offer will be set
forth in an accompanying prospectus supplement. Any underwriters, dealers,
brokers or agents participating in the distribution of the common stock may
receive compensation in the form of underwriting discounts, concessions,
commissions or fees from Acqua Wellington and/or purchasers of Acqua
Wellington's shares of common stock, for whom they may act (which compensation
as to a particular broker-dealer might be in excess of customary commissions).
Acqua Wellington is an "underwriter" within the meaning of the Securities
Act of 1933 in connection with the sale of any shares of common stock offered
under this prospectus. Any broker-dealers or agents that participate with Acqua
Wellington in sales of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be an
underwriting commission or discount under the Securities Act of 1933.
Acqua Wellington may enter into hedging transactions with broker-dealers
and the broker-dealers may engage in short sales of the common stock in the
course of hedging the positions they assume with Acqua Wellington, including,
without limitation, in connection with distributions of the common stock by such
broker-dealers. Acqua Wellington may enter into option or other transactions
with broker-dealers that involve the delivery of the shares offered hereby to
the broker-dealers, who may then resell or otherwise transfer such shares. Acqua
Wellington may also loan or pledge the shares offered hereby to a broker-dealer
and the broker-dealer may sell the shares offered hereby so loaned or upon a
default may sell or otherwise transfer the pledged shares offered hereby.
Acqua Wellington and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Securities Exchange Act of 1934, and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the shares by
Acqua Wellington or any other such person. The foregoing may affect the
marketability of the shares.
We have agreed to indemnify in certain circumstances Acqua Wellington and
the broker-dealers and agents who may be deemed to be underwriters, if any, of
the securities covered by the registration statement, against certain
liabilities, including liabilities under the Securities Act of 1933. Acqua
Wellington has agreed to indemnify in certain circumstances Value America
against certain liabilities, including liabilities under the Securities Act of
1933.
17
<PAGE>
The shares of common stock were originally issued to Acqua Wellington
pursuant to an exemption from the registration requirements of the Securities
Act of 1933, provided by Section 4(2) thereof. We agreed to register the common
stock under the Securities Act of 1933.
Legal Matters
LeClair Ryan, A Professional Corporation, Richmond, Virginia will provide
us with an opinion as to the legality of the common stock that may be offered
with this prospectus. As of ___________ __, 2000 LeRyan Holdings LLC, an
affiliate of LeClair Ryan, owns 492,610 shares of Value America Series D
preferred stock and holds warrants exercisable into 147,783 shares of Value
America common stock.
Experts
The consolidated financial statements of Value America, Inc. as of December
31, 1999 and 1998 and for each of the three years in the period ended December
31, 1999, incorporated in this document by reference to the Annual Report on
Form 10-K of Value America, Inc. have been so incorporated in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
Where You Can Find More Information
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the Commission's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the Commission at
1-800-SEC-0330 for further information on the Public Reference Room. Our public
filings, including reports, proxy and information statements, are also available
on the Commission's web site at http://www.sec.gov.
The Commission allows us to "incorporate by reference" information from
other documents that we file with them, which means that we can disclose
important information by referring to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file later with the Commission will automatically update and
supersede this information. We incorporate by reference into this prospectus the
documents listed below, and any future filings we make with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior
to the termination of this offering:
o Value America's annual report on Form 10-K for the year ended December
31, 1999, filed with the Commission on March 30, 2000, as amended on
May 1, 2000; and
o Value America's quarterly report on Form 10-Q for the quarter ended
March 31, 2000, filed with the Commission on May 15, 2000.
o the description of our common stock contained in Value America's
registration statement on Form 8-A (File No. 000-25689) filed under
Section 12(g) of the Exchange Act with the Commission on April 1, 1999.
18
<PAGE>
To the extent that any statement in this prospectus or a prospectus
supplement is inconsistent with any statement that is incorporated by reference
and that was made on or before the date of this prospectus or the applicable
prospectus supplement, the statement in this prospectus or the applicable
prospectus supplement shall control. The incorporated statement shall not be
deemed, except as modified or superceded, to constitute a part of this
prospectus, the applicable prospectus supplement or the registration statement.
Statements contained in this prospectus or the applicable prospectus supplement
as to the contents of any contract or other document are not necessarily
complete and, in each instance, we refer you to the copy of each contract or
document filed as an exhibit to the registration statement.
We will furnish without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of the information
that has been incorporated into this prospectus by reference (except exhibits,
unless they are specifically incorporated into this prospectus by reference).
You should direct any requests for copies to:
Value America, Inc.
337 West Rio Road
Charlottesville, Virginia 22901
Attention: Investor Relations, (804) 951-4272.
Statements Regarding Forward-Looking Information
This document and the documents incorporated in this document by reference
contain forward-looking statements within the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995 with respect to our financial
condition, results of operations and business. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates" and similar
expressions identify forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to certain
risks and uncertainties that could cause actual results to differ materially
from the results contemplated by the forward-looking statements. The section
entitled "Risk Factors" in this prospectus describe some, but not all, of the
factors that could cause these differences.
19
<PAGE>
VALUE AMERICA, INC.
______________ Shares of Common Stock
____________________
PROSPECTUS
____________, 2000
____________________
You should rely only on the information contained in or specifically
incorporated by reference into this prospectus. We have not authorized anyone to
provide you with information different from that contained in this prospectus.
The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of any
sale of common stock.
<PAGE>
Part II -- Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth all expenses payable by Value America in
connection with the sale of the 3,000,000 shares of common stock being
registered. All the amounts shown are estimates except for the registration fee
and the NASDAQ fee.
SEC registration fee $ 1,782
Legal fees and expenses 50,000
Accounting fees and expenses 7,500
NASDAQ fees for newly issued shares 17,500
Miscellaneous Fees and Expenses 200
--------
Total $ 76,982
Item 15. Indemnification of Officers and Directors
Value America's articles of incorporation implement the provisions of the
Virginia Stock Corporation Act which provide for the indemnification of Value
America's directors and officers in a variety of circumstances, which may
include indemnification for liabilities under the Securities Act. Under Sections
13.1-697 and 13.1-702 of the Virginia Stock Corporation Act, a Virginia
corporation generally is authorized to indemnify its directors and officers in
civil and criminal actions if they acted in good faith and believed their
conduct to be in the best interests of the corporation and, in the case of
criminal actions, had no reasonable cause to believe that the conduct was
unlawful. Value America's Articles of Incorporation require indemnification of
directors and officers with respect to certain liabilities, expenses and other
amounts imposed upon them by reason of having been a director or officer, except
in the case of willful misconduct or a knowing violation of criminal law. In
addition, as permitted by the Virginia Stock Corporation Act, Value America's
articles of incorporation eliminate the liability of a director or officer in a
stockholder or derivative proceeding. This elimination of liability will not
apply in the event of willful misconduct or a knowing violation of the criminal
law or any federal or state securities law.
Value America has purchased officers' and directors' liability insurance
policies. Within the limits of their coverage, the policies insure (a) the
directors and officers of Value America against certain losses resulting from
claims against them in their capacities as directors and officers to the extent
that such losses are not indemnified by Value America and (b) Value America to
the extent that it indemnifies such directors and officers for losses as
permitted under the Virginia Stock Corporation Act.
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibit Index
Exhibit
Number Description of Exhibit
4.1 Warrant to Purchase Shares of Common Stock of Value America dated May
10, 2000 by and between Value America and Acqua Wellington North
American Equities Fund, Ltd.
5.1 Opinion of LeClair Ryan, A Professional Corporation, regarding the
legality of the securities being registered.
10.1 Common Stock Purchase Agreement, dated as of May 10, 2000, by and
between Value America, Inc. and Acqua Wellington North American
Equities Fund, Ltd.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of LeClair Ryan, A Professional Corporation (included in
Exhibit 5.1).
24.1 Power of Attorney (see signature page after Item 17).
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-effective
amendment hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering price may be reflected in the form of prospectus
filed with the Commission under Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by us pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are
incorporated by reference in this registration statement.
II-2
<PAGE>
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of Value
America's Annual Report under Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference into this registration statement 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Value America pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Value America of expenses
incurred or paid by a director, officer or controlling person of Value America
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the question has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by us is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 the City of Charlottesville, State of Virginia, on the 9th day of
June 2000.
VALUE AMERICA, INC.
By: /s/ Glenda M. Dorchak
(Glenda M. Dorchak, Chairman of the Board, President
and Chief Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael J. Waide and M. Kathlene
FitzPatrick, and each of them, as his or her true and lawful attorney-in-fact
and agents, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign any or all amendments (including post-effective amendments) to the
Registration Statement and to file the same, with all exhibits thereto, and all
documents in connection therewith, with the Securities and Exchange commission,
granting unto said attorneys-in-fact and agents, and each of them, full power of
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
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, each acting alone, or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
----------------------------------------- ------------------
---------------------------------
/s/ Glenda M. Dorchak Chairman of the Board, President and June 9, 2000
--------------------------------- Chief Executive Officer (Principal
(Glenda M. Dorchak) Executive Officer)
/s/ Michael J. Waide Chief Financial Officer (Principal June 9, 2000
--------------------------------- Financial Officer)
(Michael J. Waide)
/s/ M. Kathlene FitzPatrick Vice President and Controller (Chief June 9, 2000
--------------------------------- Accounting Officer)
(M. Kathlene FitzPatrick)
/s/ John Steele Chief Operating Officer June 9, 2000
---------------------------------
(John Steele)
/s/ Thomas J. Casey Director June 9, 2000
---------------------------------
(Thomas J. Casey)
II-4
<PAGE>
/s/ Leroy Keith Director June 9, 2000
---------------------------------
(Leroy Keith)
/s/ Gary D. LeClair Director June 9, 2000
---------------------------------
(Gary D. LeClair)
/s/ Gerard R. Roche Director June 9, 2000
---------------------------------
(Gerard R. Roche)
/s/ William D. Savoy Director June 9, 2000
---------------------------------
(William D. Savoy)
/s/ Frederick W. Smith Director June 9, 2000
---------------------------------
(Frederick W. Smith)
/s/ Michael R. Steed Director June 9, 2000
---------------------------------
(Michael R. Steed)
</TABLE>
II-5
<PAGE>
Exhibit Index
Exhibit
Number Description of Exhibit
4.1 Warrant to Purchase Shares of Common Stock of Value America dated May
10, 2000 by and between Value America and Acqua Wellington North
American Equities Fund, Ltd.
5.1 Opinion of LeClair Ryan, A Professional Corporation, regarding the
legality of the securities being registered.
10.1 Common Stock Purchase Agreement, dated as of May 10, 2000, by and
between Value America, Inc. and Acqua Wellington North American
Equities Fund, Ltd.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of LeClair Ryan, A Professional Corporation (included in
Exhibit 5.1).
24.1 Power of Attorney (see signature page after Item 17).
