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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 2000
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------
WATTAGE MONITOR INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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NEVADA 86-0882633
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1100 KIETZKE LANE
RENO, NEVADA 89502
(775) 327-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
----------------------------------
GERALD R. ALDERSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
WATTAGE MONITOR INC.
1100 KIETZKE LANE
RENO, NEVADA 89502
(NAME AND ADDRESS OF
AGENT FOR SERVICE)
(775) 327-6000
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
WILLIE E. DENNIS, ESQ.
RONALD R. ADEE, ESQ.
AKIN GUMP STRAUSS HAUER & FELD, LLP
590 MADISON AVENUE, 20TH FLOOR
NEW YORK, NY 10022
(212) 872-1000 (PHONE) (212) 872-1002 (FAX)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time as determined by the Selling Stockholders.
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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
AMOUNT PROPOSED PROPOSED AMOUNT OF
TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER SHARE(2) OFFERING PRICE(2) FEE
------------------------------------------ ---------------------- --------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 30,704,646 shares $ 0.72 $ 22,107,345 $ 5,836
------------------------------------------ ---------------------- --------------------- --------------------- --------------------
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended,
this registration statement also covers such indeterminate number of
shares of common stock as may be required to prevent dilution
resulting from stock splits, stock dividends or similar events.
(2) Estimated solely for the purpose of computing the amount of the
registration fee, based on the average of the bid and ask prices for
Wattage Monitor Inc.'s common stock as reported on the OTC
Electronic Bulletin Board for the five trading days prior to and
including on November 28, 2000 in accordance with Rule 457(c) under
the Securities Act of 1933, as amended.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
===============================================================================
<PAGE>
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL
NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion, dated November ____, 2000
30,704,646 Shares
Wattage Monitor Inc.
COMMON STOCK
-----------------
Shares of common stock of Wattage Monitor Inc. are being offered by
this prospectus. The shares will be sold from time to time by the selling
stockholders named in this prospectus. The prices at which such selling
stockholders may sell the shares will be determined by the prevailing market
price for the shares or in negotiated transactions. We will not receive any
proceeds from the sale of shares of common stock by the selling stockholders but
we will receive proceeds from the exercise of warrants held by certain of the
selling stockholders. Our shares are traded on the OTC Electronic Bulletin Board
under the symbol "WMON." The last reported sale price for the shares on the OTC
Electronic Bulletin Board on November 28, 2000 was $.87 per share.
-----------------
INVESTING IN THE SHARES INVOLVES A HIGH DEGREE OF RISK. FOR MORE
INFORMATION, PLEASE SEE "RISK FACTORS" BEGINNING ON PAGE 7.
-----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined whether
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-----------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER 30, 2000
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ABOUT THIS PROSPECTUS...................................................... 3
FORWARD-LOOKING STATEMENTS................................................. 3
WHERE YOU CAN FIND MORE INFORMATION........................................ 4
ABOUT WATTAGE MONITOR...................................................... 5
RISK FACTORS............................................................... 7
USE OF PROCEEDS........................................................... 11
SELLING STOCKHOLDERS...................................................... 12
PLAN OF DISTRIBUTION...................................................... 13
LEGAL MATTERS............................................................. 14
EXPERTS................................................................... 14
</TABLE>
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission (the "SEC"). The prospectus
relates to 30,704,646 shares of our common stock which the selling
stockholders named in this prospectus may sell from time to time. We will not
receive any of the proceeds from these sales but we will receive proceeds
from the exercise of warrants held by certain selling stockholders. We have
agreed to pay the expenses incurred in registering the shares, including
legal and accounting fees.
The shares have not been registered under the securities laws of any
state or other jurisdiction as of the date of this prospectus. Brokers or
dealers should confirm the existence of an exemption from registration or
effectuate such registration in connection with any offer and sale of the
shares.
This prospectus describes certain risk factors that you should
consider before purchasing the shares. See "Risk Factors" beginning on page
7. You should read this prospectus together with the additional information
described under the heading "Where You Can Find More Information."
FORWARD-LOOKING STATEMENTS
This prospectus and the other reports we have filed with the SEC,
contain "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
words or phrases "can be", "expects", "may affect", "may depend", "believes",
"estimate", "project", and similar words and phrases are intended to identify
such forward-looking statements. Such forward-looking statements are subject
to various known and unknown risks and uncertainties and we caution you that
any forward-looking information provided by or on behalf of Wattage Monitor
is not a guarantee of future performance. Our actual results could differ
materially from those anticipated by such forward-looking statements due to a
number of factors, some of which are beyond our control, in addition to those
risks discussed in "Risk Factors" in this prospectus and in our other public
filings, press releases and statements by our management, including (1) the
volatile and competitive nature of the Internet, (2) changes in domestic
economic and market conditions, and (3) the effect of federal and state
regulation on our businesses. All forward-looking statements are current only
as of the date on which such statements were made. We do not undertake any
obligation to publicly update any forward-looking statement to reflect events
or circumstances after the date on which any such statement is made or to
reflect the occurrence of unanticipated events.
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WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires us to file information with the SEC
concerning our business and operations. We file annual, quarterly and special
reports, proxy statements and other information with the SEC. You can read and
copy these documents at the public reference facility maintained by the SEC at
Judiciary Plaza, 450 Fifth Street, NW, Room 1024, Washington, DC 20549. You can
also copy and inspect such reports, proxy statements and other information at
the regional offices of the SEC located at Seven World Trade Center, 13th Floor,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public on the
SEC's web site at http://www.sec.gov. You can also inspect our reports, proxy
statements and other information at the offices of the Nasdaq Stock Market.
The SEC allows us to "incorporate by reference" the information we have
previously filed with it, which means that we can disclose important information
to you by referring you to those documents. The information that we incorporate
by reference is considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act:
1. Our Annual Report on Form 10-KSB for the year ended December 31,
1999 filed on March 15, 2000.
2. The Definitive Proxy Statement for the Annual Meeting of Wattage
Monitor on Schedule 14A, dated May 5, 2000.
3. The Definitive Proxy Statement for the increase in the total number
of shares of Common Stock that Wattage Monitor may issue to fifty million
shares, on Schedule 14A, dated September 11, 2000.
4. Our Quarterly Report on Form 10-QSB for the three months ended
September 30, 2000 filed on November 20, 2000.
5. Our Quarterly Report on Form 10-QSB for the three months ended June
30, 2000 filed on August 10, 2000.
6. Our Quarterly Report on Form 10-QSB for the three months ended March
31, 2000 filed on May 9, 2000.
7. Our Quarterly Report on Form 10-QSB for the three months ended
September 30, 1999 filed on November 12, 1999.
8. Our filing on Form 8-K, dated September 28, 2000, disclosing the
documentation supporting our effort to secure a $10,000,000 financing
transaction.
This prospectus is part of a registration statement we filed with the
SEC (Registration No. 333- ). You may request a free copy of any of the
above filings by writing or calling Kristi Grund, Wattage Monitor Inc., 1100
Kietzke Lane, Reno, Nevada 89502, (775) 327-6000.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement to this prospectus. We have not
authorized anyone else to provide you with different information. The selling
stockholders should not make an offer of these shares in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any supplement to this prospectus is accurate as of any date other
than the date on the cover page of this prospectus or any supplement.
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ABOUT WATTAGE MONITOR
EXECUTIVE SUMMARY
Wattage Monitor is the preeminent electricity information and
transaction service, providing competing electric prices and switching
services in deregulated markets. Through our flagship brand,
WattageMonitor.com, we provide a free-to-use service that presents commercial
and residential consumers with their electricity service options. The service
is available through our web site (www.wattagemonitor.com) or via a toll free
phone call (1-888-WATTAGE). Through the Wattage Monitor service consumers can
see a complete list of competitive electric utility offers in their area,
choose a new electricity supplier, obtain information about the current
status of electric choice in their area, and access a wide variety of
industry data, statistical analysis, and proprietary indices. Organized by
zip code, the information is simple to access and provides a complete picture
of the localized electric utility landscape, all in one place.
We also make our electric utility news and information feed available
to partner web sites. This data-stream (and transaction capability) enables
other web sites to deliver electric utility pricing (and electric utility
purchase capabilities) to its visitors. Our data offering delivers a combination
of proprietary technology and industry-leading aggregation of commercial and
residential electric utility pricing information to supply customers with fast,
accurate and complete information regarding the energy marketplace.
We receive fees from electricity suppliers to present consumers with
information regarding their service and commissions from suppliers on the
on-going electricity service consumers order from suppliers via the Wattage
Monitor service. We provide electric market research, a newsletter and consumer
surveys on a fee and subscription basis to electric utilities and others
interested in this industry. In addition, in our relationships with partner web
sites deploying the Wattage Monitor data feed, we plan to share the sales
commissions and any advertising revenue those sites generate.
The electric utility industry in the United States is vast, highly
fragmented and in the early stages of deregulation. Unlike previously
deregulated industries like telecommunications, this industry has historically
operated locally, not nationally. There are no national franchises. A large
number of competitive electricity suppliers have been attracted to compete
because of the sheer market size and the absence of one industry leader.
There are approximately one hundred million residential households
using electricity in the United States, consuming roughly one trillion kWh's of
electricity annually and generating approximately $90 billion of annual revenue.
Using consumption as a measure, there is roughly the same amount of electricity
used by commercial customers (non-manufacturing business establishments).
Industrial customers constitute the third market segment, again equal in kWh's
used to the residential and commercial markets.
Suppliers attracted to this market have found acquiring customers to be
quite expensive. There are over three thousand entities that currently provide
customers electricity in the United States, including several very large
electric utilities. None currently serves more than approximately 5% of the
national market. Even the largest electric utilities are isolated
geographically, and while they may dominate in their given regions, they have
little or no presence elsewhere. All of them must find a way to reach customers
in this new business environment or disappear.
In a competitive electric power market, users of electricity need
accurate and objective electrical service and rate information to choose a
supplier. Suppliers must find a cost-effective way to present their programs to
consumers and enroll them as customers. Our company, both as an impartial
provider of free information to individual consumers and as a market access
channel for industry participants and commercial customers, has become the early
industry standard for such services.
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RECENT DEVELOPMENTS
On November 28, 2000, we entered into an agreement with funds
affiliated with Weiss Peck & Greer, LLC, a New York limited liability company
("WPG") and PurchasePro.com, Inc. ("PurchasePro"), a Nevada corporation by which
WPG and PurchasePro will purchase an aggregate of 25,600,000 shares of our
common stock at $0.272 per share. The agreement is subject to the satisfaction
of certain conditions, including the registration of their shares of common
stock. We also recently entered into an agreement with PurchasePro under which
we are designated a Preferred Supplier in the PurchasePro Global Marketplace and
in all PurchasePro powered and/or developed e-marketplaces.
Assuming the satisfaction of the conditions necessary to complete our
sale of these shares to WPG and PurchasePro, we will have sufficient liquidity
to implement our business plans through all of 2001, well into 2002, and perhaps
beyond. We will also significantly increase our visibility with and access to
electricity consumers with choice, particularly to the small to medium sized
business market, as a result of our agreement with PurchasePro.
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RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD GIVE CAREFUL CONSIDERATION TO THE FOLLOWING RISK FACTORS, TOGETHER WITH
ALL OF THE OTHER INFORMATION INCLUDED IN THIS PROSPECTUS, BEFORE MAKING AN
INVESTMENT DECISION.
In order to relate the risk factors set forth below to the broad
categories of risk to which they correspond, the risk factors are organized in
three groups:
- Risks in establishing Wattage Monitor as a going concern;
- Risks in growing Wattage Monitor; and
- Risks of Wattage Monitor's Common Stock by virtue of its
characteristics, such as liquidity and potential dilution.
RISKS IN ESTABLISHING WATTAGE MONITOR AS A GOING CONCERN
IF WE DO NOT COMPLETE THE $7 MILLION EQUITY FINANCING CURRENTLY SUBJECT
TO AN EXECUTED, BINDING STOCK PURCHASE AGREEMENT, THEN WE MAY BE UNABLE TO
CONTINUE OPERATING.
To have the opportunity to demonstrate that our business model can
be successfully implemented requires the capital to try. Without the receipt
of funds in the aggregate principal amount of approximately $7 million from
funds affiliated with Weiss Peck & Greer, LLC and PurchasePro.com, Inc.,
pursuant to the terms of a Stock Purchase Agreement executed by us and those
parties we will not have the financial resources to continue.
THE ACTIVE PARTICIPATION OF SUPPLIERS AND CONSUMERS IN OUR SYSTEM IS
NECESSARY FOR OUR BUSINESS TO SUCCEED.
From inception, we thought and still believe there were three
requirements necessary to prove our business model:
- Creation of the Wattage Monitor information system;
- Demonstration that consumers use the Wattage Monitor service; and
- Electricity supplier participation.
With our recent success enrolling suppliers, we believe we have
successfully demonstrated our ability to achieve each of these requirements.
However, until suppliers began to participate, consumers' use of our system was
necessarily for information only, not to switch suppliers. Now the challenge is
to scale the business as competition spreads to additional states, to capitalize
on our market leading position and to have consumers use our service to switch
suppliers as well as to obtain information.
The first step in scaling our business was to secure a strong market
share of participating suppliers in each of the regulated utility territories in
each of the states with active (more than one or two suppliers) competition:
California, New Jersey, New York and Pennsylvania. Through the October of 2000,
our market share defined as the percentage of competitive offers in a territory
that are available for switching through our system - was greater than 44% in
all cases, as much as 100% in some cases, and averaged approximately 70%. While
we believe that our current market share is strong, there is no guarantee that
our market share position can be maintained.
Before we can generate significant revenue, we must maintain strong
supplier participation in our system and attract consumers to utilize our
service to switch to their supplier of choice, not just to obtain information.
There are a number of factors that we believe affect both supplier and consumer
participation in our service. Three of the more important factors are:
7
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- Market Immaturity -- When states decide to create competition in their
electricity industry it generally requires legislation to do so. After
adopting that legislation, the specific structure of the market and the
requirements for participating in it evolve through hearings and
implementing regulations issued by the various state Public Utility
Commissions. That process is not complete today, even in states that
originally enacted legislation two or three years ago. Such an evolving
process makes it both difficult for suppliers to compete for customers
and difficult for consumers to understand how to participate, as the
exact rules of engagement are not yet firmly established or continue to
change.
- Consumer Behavior -- While one hundred million households and fifteen
million businesses use electricity, virtually none have ever chosen
their electric supplier. There is no established basis to determine how
such customers make their choices.
- Organizational Immaturity -- All competing suppliers, including those
(more than half) that are subsidiaries of very large enterprises, are
nevertheless newly created. This "start-up" nature of all companies in
this market means that the suppliers are still developing their
approach to obtaining consumers/customers.
Although we believe that reluctance to participate in our system by
suppliers and reluctance to switch by consumers seem to be disappearing, our
marketing efforts continue to be more difficult than originally anticipated.
INSIGNIFICANT HISTORICAL REVENUES DO NOT ENABLE US TO EVALUATE WHETHER
OR NOT WE WILL EVER OPERATE PROFITABLY.
Because we have never generated significant revenues, we cannot be sure
that we will ever generate the revenue necessary to be a successful business. We
have incurred losses since inception. As we continue to implement our strategy,
we intend to spend significant amounts on sales and marketing, research and
development and general and administrative activities. We expect that we
generally will incur these costs in advance of anticipated related revenues,
which may result in operating losses for the foreseeable future.
Any investment in our company must be considered in light of problems
frequently encountered by companies in an early stage of development. Our
ability to achieve a profitable level of operating revenue will depend on, among
other things:
- the market's acceptance of our products and services;
- the rate at which states adopt electric competition; and
- the manner in which each state chooses to phase in competition.
RISKS IN GROWING WATTAGE MONITOR
WE ARE UNCERTAIN THAT WE WILL GROW, OR THAT WE WILL BE ABLE TO
EFFECTIVELY MANAGE OUR GROWTH.
Any growth we may experience will result in increased responsibility
for existing and new management personnel. This is particularly significant in
the high growth, Internet industry where the demand for skilled personnel is
quite extreme and turn-over is high. Effective growth management will depend on
the following:
- Our ability to integrate new personnel into our corporate structure;
- Improving our operational, management and financial systems and
controls; and
- Our capacity to recruit, train, motivate and manage employees.
If we are unable to do so, our business, results of operations and
financial condition may be adversely affected.
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OUR BUSINESS DEPENDS ON CONTINUED USE AND IMPROVEMENT OF THE INTERNET.
Our products and services are targeted toward consumers and businesses
that use the Internet. The Internet is subject to a high level of uncertainty
and is characterized by rapidly changing technology, evolving industry
standards, and frequent new product and service introductions. Accordingly, you
should consider the risks and difficulties frequently encountered in new and
rapidly evolving markets. Critical issues concerning the commercial use of the
Internet remain unresolved and may affect the growth of Internet use. Despite
growing interest in the many commercial uses of the Internet, many consumers and
businesses have been deterred from purchasing Internet products and services for
a number of reasons, including:
- inadequate protection of the confidentiality of stored data and
information moving across the Internet;
- inconsistent quality of service;
- inability to integrate business applications on the Internet;
- the need to deal with multiple vendors, whose products are frequently
incompatible; and
- lack of availability of cost-effective, high-speed products and
services.
If Internet usage does not grow or is not sustained at the rates which
we presently anticipate, our business, financial condition and results of
operations will be materially and adversely affected.
WE DEPEND ON CERTAIN KEY PERSONNEL AND THE LOSS OF ANY OF THEM MAY
ADVERSELY AFFECT US.
Our success is greatly dependent upon the efforts of Gerald R.
Alderson, our President and Chief Executive Officer. The loss of his services,
or those of certain other key management or personnel, could have a material
adverse effect on us. Currently, we have an employment agreement with Mr.
Alderson. The initial term of the agreement expires in 2000, but is subject to
automatic renewal. We have not obtained key man life insurance for Mr. Alderson
or any of our other key employees.
WE ARE UNCERTAIN WE CAN OBTAIN THE CAPITAL TO GROW OUR BUSINESS.
To fully realize our business objectives and potential, we will require
significant financing in addition to this offering. We cannot be sure that we
will be able to secure the financing we will require, or that it will be
available on favorable terms. If we are unable to obtain it, we will be required
to substantially curtail our approach to implementing our business objectives.
Additional financing may be debt, equity or a combination of debt and equity. If
we raise additional funds through the issuance of equity securities, a
significant dilution to the net tangible book value per share of our common
stock could result. If we raise additional funds by issuing debt, we may be
subject to limitations on our operations, including limitations on the payment
of dividends.
THE COMPETITIVE ELECTRIC MARKET IS NEW, SO IT IS UNKNOWN HOW IT WILL
EVOLVE OR HOW THE COMPANIES THAT OPERATE IN IT WILL BEHAVE.
All competitive electric suppliers, including those that are
subsidiaries of large enterprises, are new. The start-up nature of all companies
in this market and the formative nature of the market itself mean that the
companies in the market were created by their founders or parents to implement a
specific business plan. Necessarily, we were not a part of those plans because
we did not exist at the time the plans were formulated. These new organizations
generally decide that they must first try to implement their original plan
before they either change direction or add a second approach to their efforts to
obtain customers, such as the one we offer. The time it takes for these newly
formed companies to mature will materially affect the timing of our growth.
There can be no assurance that this will occur in a timely enough manner to
allow us to profitably offer our service.
OUR COMPUTER-BASED INFORMATION SYSTEM MAY NOT BE SUFFICIENT TO SATISFY
THE REQUIREMENTS OF CONSUMERS AND SUPPLIERS AND MAY BECOME OBSOLETE OR MAY FAIL
TO PERFORM AS EXPECTED.
With the initial October 1998 release of our nationwide, zip code-based
information system and its subsequent use by tens of thousands of electric
consumers, a number of system problems were identified. WM 2.0, released
September 1, 1999 and revised in April of 2000, addressed those problems and
represents a more mature web site to deliver the services we believe consumers
want. WM 3.0, scheduled for launch in the first quarter of
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2001, is intended to provide greater transaction flexibility and allow more
efficient implementation of web site partnering opportunities. However, with
the rapid rate at which the deregulating electricity market is evolving and
growing in both scope and complexity, there can be no assurance that WM 2.0
or our projected WM 3.0 will meet their performance standards or that
additional system functionality will not be necessary. The technology that
enables delivery of the information services we offer, such as computer
Internet-based access systems, are subject to rapid and significant
technological change. Competitors may develop more effective and efficient
technology that may render our technology obsolete. If this occurs, we will
need to make a substantial investment to upgrade to remain competitive.
Further, a reduction in the performance, reliability and availability
of our network infrastructure will impede our ability to distribute our products
and services to our users, as well as our reputation and ability to attract and
retain funding, users and content providers. Our systems and operations could be
damaged or interrupted by fire, flood, power loss, telecommunications failure,
Internet breakdown, earthquake and similar events. Our systems are also subject
to viruses, break-ins, sabotage, intentional acts of vandalism, hacking,
cyber-terrorism and similar misconduct. Our computer and communications
infrastructure is located in Brooklyn, New York. We do not have fully redundant
systems or a formal disaster recovery plan, and we do not carry adequate
business interruption insurance to compensate us for losses that may occur from
a system outage. Any system error or failure that causes interruption in
availability of products or content or an increase in response time could result
in a loss of potential or existing customers or content providers and decreases
in stock values. If we suffer sustained or repeated interruptions, our products
and services could be less attractive to such entities or individuals and our
business would be harmed.
WE DEPEND UPON OUR PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY
FOR SUCCESS.
As an information service company, our success depends in particular on
our ability to protect our proprietary information and trademarks. To do so, we
rely on a combination of copyright, trademark and trade secret laws,
nondisclosure and other contractual agreements with employees and third parties,
and technical measures. We cannot be sure that the steps we have taken will be
adequate to protect us. In addition, third parties may develop equivalent or
superior information systems. We have filed for patents on our service, but no
action has yet been taken on our applications. We may be subject to or may
initiate proceedings in the United States Patent and Trademark Office, which may
demand significant financial and management resources. Although we believe our
products and information system do not infringe upon the proprietary rights of
others, there can be no assurance that third parties will not assert
infringement claims against us. Litigation may be necessary to enforce our
intellectual property rights or to defend against claimed infringement by
others. Any litigation may result in substantial cost to us and a diversion of
our efforts.
RISKS ATTRIBUTABLE TO OUR COMMON STOCK'S CHARACTERISTICS
WE CAN ISSUE PREFERRED STOCK AND DILUTE THE POSITION OF THE
SHAREHOLDERS OF OUR COMMON STOCK.
Our certificate of incorporation provides that we may issue up to
5,000,000 shares of preferred stock, from time to time, in one or more series.
The board of directors is authorized to determine the number of shares, rights,
preferences, privileges and restrictions of any new issuance of preferred stock,
without any vote or action by the holders of our common stock. The board of
directors may issue preferred stock with voting or conversion rights that could
adversely affect the rights of the holders of common stock. The potential
issuance of preferred stock may have the effect of delaying or preventing a
change in control, discourage bids for the common stock at a premium over its
market price, or adversely affect the market price of the common stock.
WE ARE LISTED ON THE OTC ELECTRONIC BULLETIN BOARD, WHICH CAN BE A
VOLATILE MARKET.
Our common stock is quoted on the OTC Electronic Bulletin Board, a NASD
sponsored and operated quotation system for equity securities. The OTC
Electronic Bulletin Board was introduced as an alternative to the NQB Pink
Sheets for trading over-the-counter securities. It is a more limited trading
market than the NASDAQ SmallCap Market, and timely, accurate quotations of the
price of our common stock may not always be available. You may expect trading
volume to be low in such a market. Consequently, the activity of trading only a
few shares
10
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may affect the market and may result in wide swings in price and in volume.
The price of our common stock may fall below the price at which an investor
in this offering purchased shares, and an investor may get back less than the
amount invested if the investor sells such shares. Our shares of common stock
may be subject to sudden and large falls in value, and an investor could
experience the loss of the investor's entire investment. Past performance of
the shares of common stock is not necessarily a guide to future performance.
Our common stock may be subject to the requirements of Rule 15g-9,
promulgated under the Securities Exchange Act of 1934, as amended, if the price
of our common stock falls below $5.00 per share. Under such rule, broker-dealers
who recommend low-priced securities to persons other than established customers
and accredited investors must satisfy special sales practice requirements,
including a requirement that they make an individualized written suitability
determination for the purchaser and receive the purchaser's consent prior to the
transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of
1990 also requires additional disclosure in connection with any trades involving
a stock defined as a penny stock. Generally, the SEC defines a penny stock as
any equity security not traded on an exchange or quoted on NASDAQ that has a
market price of less than $5.00 per share. The required penny stock disclosures
include the delivery, prior to any transaction, of a disclosure schedule
explaining the penny stock market and the risks associated with it. Such
requirements could severely limit the market liquidity of the securities and the
ability of purchasers to sell their securities in the secondary market.
SINCE OUR OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS OWN A LARGE
PERCENTAGE OF OUR OUTSTANDING SHARES OF COMMON STOCK, THEY ARE ABLE TO
SIGNIFICANTLY INFLUENCE MATTERS REGARDING SHAREHOLDER APPROVAL.
Prior to the registration of our common stock under this prospectus,
our officers, directors and 5% shareholders, as a group, beneficially own
approximately 56.6% of the common stock. Upon the completion of this share
registration (including 25,600,000 shares of common stock as yet unissued), our
officers, directors, and existing 5% shareholders will as a group beneficially
own approximately 22.5% of our outstanding common stock entitled to vote. As a
result, these persons, acting together, may have the ability to control the vote
on matters submitted to our shareholders for approval. This concentration of
ownership may delay, defer or prevent a change in control, merger,
consolidation, takeover or other business combination.
THE SALE OF SHARES OF OUR COMMON STOCK REGISTERED UNDER THIS PROSPECTUS
COULD REDUCE THE PRICE OF OUR COMMON STOCK.
The effective registration of the shares covered under this prospectus
will increase our count of outstanding shares from 13,421,520 to 41,646,520. Of
this total, 6,047,166 shares are subject to lock-up agreements. In addition,
1,213,650 shares of our common stock underlying outstanding options will, upon
exercise of the options, be subject to the resale limitations of Rule 144
promulgated under the Act ("Rule 144"). Sales of our common stock resulting from
the registration of shares under this prospectus and/or sales of the restricted
securities as they become eligible for sale may affect the market price of our
common stock.
THE SECURITIES ARE NOT READILY REALIZABLE INVESTMENTS.
The shares of Common stock are not readily realizable investments and
it may be difficult for an investor to sell or realize the investment and to
obtain reliable information about its value or the extent of the risks to which
it is exposed.
USE OF PROCEEDS
We will not receive any part of the proceeds from the sale by our
shareholders of our common stock. Based on the closing bid price of our
common stock on November 28, 2000, which was $.87, the selling shareholders
would receive, before any expenses or commissions, approximately $26,713,000
if all the shares in this offering are sold.
11
<PAGE>
SELLING STOCKHOLDERS
The following table shows for our shareholders the following
information:
- The number of shares of our common stock beneficially owned by them as
of November 28, 2000 and covered by this prospectus; and
- The number of shares of common stock to be retained after this
offering, if any.
We assume no purchase in this offering by any shareholder listed below
of any shares of our common stock.
The numbers of shares indicated as owned prior to and registered in the
offering by the funds affiliated with Weiss Peck and Greer, LLC, and
PurchasePro.com, Inc. reflect shares obtained under the Stock Purchase Agreement
between the parties and us dated November 28, 2000.
The number of shares indicated as owned prior to and registered in the
offering by Valiant Growth Fund, Orion Projects Limited, Delta Realty Limited
represent an aggregate of 2,625,000 shares of our Common Stock obtained by the
one-to-one conversion of their 2,625,000 shares of our Series B preferred stock
on November 22, 2000.
Joel Dumaresq, one of our directors, beneficially owns 30% of
Valiant Growth Fund.
<TABLE>
<CAPTION>
Common Stock
-------------------------------------------
Number of Shares
Owned Prior to Number of Shares
and Registered in Beneficially Owned
Name of Selling Security Holder The Offering After the Offering
------------------------------------------- ----------------- ------------------
<S> <C> <C>
WPG Raytheon Software Fund, L.P. 9,202,838 0
WPG Institutional Software Fund, L.P. 7,484,961 0
WPG Software Fund, L.P. 5,235,730 0
PurchasePro.com, Inc. 3,676,471 0
Valiant Growth Fund 1,175,000 0
Orion Projects Limited 1,175,000 0
Delta Realty Limited 1,175,000 0
Jonathan Bond 397,059 0
Richard Kirshenbaum 385,059 0
A.E.L.P. 220,588 0
Gail Alderson 147,000 0
Marcy Shockey 97,060 0
Kenneth Hattich 90,884 0
Katherine Alderson 72,824 0
Kory Alderson 72,824 0
William Oberlander 58,706 0
Nigel Carr 50,412 0
Rosemarie Ryan 39,706 0
Alison Elliott 37,824 0
CM Ruppert/ME Karlinsky, as joint tenants 17,648 0
Pamela Ehrenkranz DeWolf 12,500 0
Dorothy Piekarz Family Trust 4,330 0
Anne Alderson 4,174 0
Dorothy Piekarz 4,000 0
Jack Alderson 4,000 0
Mark Alderson 4,000 0
Nancy Mayr 4,000 0
Caryn Bailey 3,000 0
Deborah Annex 1,148 0
Elaine Connolly 900 0
</TABLE>
12
<PAGE>
PLAN OF DISTRIBUTION
Our company is registering the shares of common stock on behalf of the
selling stockholders. A selling stockholder is a person named on page 12 and
also includes any donee, pledgee, transferee or other successor-in-interest
selling shares received after the date of this prospectus from a selling
stockholder as a gift, pledge, partnership distribution or other non-sale
related transfer. We will pay the costs, expenses, and fees of registering the
common stock, but our shareholders will pay any underwriting or brokerage
commissions and similar selling expenses relating to the sale of shares of their
common stock. Sales of shares may be effected by selling stockholders from time
to time in one or more types of transactions (which may include block
transactions) on the Nasdaq National Market, in the over-the-counter market, in
negotiated transactions, through put or call options transactions relating to
the shares, through short sales of shares, or a combination of these methods of
sale, at market prices prevailing at the time of sale, or at negotiated prices.
These transactions may or may not involve brokers or dealers. The selling
stockholders have advised our company that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is there an
underwriter or coordinated broker acting in connection with the proposed sale of
shares by the selling stockholders.
The selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with these
transactions, broker-dealers or other financial institutions may engage in short
sales of the shares or of securities convertible into or exchangeable for the
shares in the course of hedging positions they assume with selling stockholders.
The selling stockholders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealers or other financial institutions of shares offered by this
prospectus, which shares these broker-dealer or other financial institution may
resell pursuant to this prospectus (as amended or supplemented to reflect such
transaction).
The selling stockholders may make these transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The selling stockholders and any broker-dealers that act in connection
with the sale of shares may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by such
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. The selling stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares against certain liabilities, including liabilities arising under
the Securities Act.
Because selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the selling stockholders may
be subject to the prospectus delivery requirements of the Securities Act. Our
company has informed the selling stockholders that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales in the market.
Selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
Upon our company being notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
- the name of each such selling stockholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the initial price at which such shares were sold;
13
<PAGE>
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
- that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
- other facts material to the transactions.
In addition, upon our company being notified by a selling stockholder
that a donee or pledgee intends to sell more than 500 shares, a supplement to
this prospectus will be filed.
LEGAL MATTERS
The validity of the common stock offered under this prospectus will be
passed upon for us by our counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
New York, New York. A partner of Akin, Gump, Strauss, Hauer & Feld, L.L.P. holds
3,000 shares of our common stock, and options to purchase 10,000 shares of
our common stock.
EXPERTS
The audited financial statements appearing in our Annual Report on
Form 10-KSB as of December 31, 1999, and for the period from inception (July
1, 1997) through December 31, 1999 and for the years ended December 31, 1999
and 1998 have been audited by Grant Thornton LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of such firms
as experts in giving such reports.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses of the
sale and distribution of the securities being registered, all of which are being
borne by us.
<TABLE>
<CAPTION>
Amount
------------------
<S> <C>
Securities and Exchange Commission filing fee......... $ 6,331
Printing expenses..................................... 5,000
Legal Fees and Expenses............................... 50,000
Accounting Fees and Expenses.......................... 5,000
Miscellaneous......................................... 2,500
------------------
Total................................................. $ 68,831
------------------
</TABLE>
All of the amounts shown are estimates except for the fee payable to
the Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant's articles of incorporation eliminate the personal
liability of directors to the registrant or its stockholders for monetary
damages for breach of fiduciary duty to the extent permitted by Nevada law. The
registrant's articles of incorporation and by-laws provide that the registrant
shall indemnify its officers and directors to the extent permitted by Nevada
law, which authorizes a corporation to indemnify directors, officers, employees
or agents of the corporation in non-derivative suits if such party acted in good
faith and in a manner such party reasonably believed to be in or not opposed to
the best interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The Nevada General Corporation Act further provides that indemnification shall
be provided if the party in question is successful on the merits or otherwise.
ITEM 16. EXHIBITS
A list of exhibits included as part of this registration statement is
set forth in the Exhibit Index that immediately precedes the exhibits and is
incorporated by reference here.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sale; are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(b) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
II-1
<PAGE>
(c) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (1)(a) and (1)(b) above do not apply if the
registration statement is on Form S-3, and the information required to be,
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 the 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 of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration 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.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
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 foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than 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 the final adjudication
of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Wattage
Monitor Inc. 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 New York, New York on November 30, 2000.
WATTAGE MONITOR INC.
By: /s/ Gerald R. Alderson
-------------------------------------
Gerald R. Alderson
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose
signatures appear below each severally constitutes and appoints Gerald R.
Alderson as true and lawful attorneys-in-fact and agents, with full powers of
substitution and resubstitution, for them in their name, place and stead, in
any and all capacities, to sign any and all amendments (including
pre-effective and post-effective amendments) to this registration statement
and to sign any registration statement (and any post-effective amendments)
relating to the same offering as this registration statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as they might or could do in person, hereby ratifying and confirming
all which said attorneys-in-fact and agents, or any of them, or their
substitute or substitutes, may lawfully do, or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ GERALD R. ALDERSON November 30, 2000
----------------------------------------
Gerald R. Alderson, Director, President,
Chief Executive Officer and
Principal Financial Officer
/s/ STEPHEN D. KLEIN November 29, 2000
----------------------------------------
Stephen D. Klein, Chairman of the
Board of Directors
/s/ JOEL DUMARESQ November 29, 2000
----------------------------------------
Joel Dumaresq, Director
/s/ ALEXANDER ELLIS III November 29, 2000
----------------------------------------
Alexander Ellis III, Director
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description and Method of Filing
-------- --------------------------------
<S> <C>
2.1* Agreement and Plan of Merger by and between WattMonitor
LLC and Wattage Monitor, dated as of February 26, 1999
(filed as Exhibit 2.1 to Amendment No. 4 to Form SB-2
registration Statement, filed October 13, 1999).
3.1* Amended and Restated Articles of Incorporation of Wattage
Monitor as filed with the Secretary of State of the State
of Nevada on February 24, 1999 (filed as Exhibit 3.1 to
Amendment No. 4 to Form SB-2 Registration Statement, filed
October 13, 1999).
3.2* Amended and Restated By-Laws of Wattage Monitor, adopted
as of February 19, 1999 (filed as Exhibit 3.2 to Amendment
No. 4 to Form SB-2 Registration Statement, filed October
13, 1999).
3.3 Certificate of Amendment to Amended and Restated
Articles of Incorporation of Wattage Monitor Inc. as filed
with the Secretary of State of Nevada on October 11,
2000.**
4.1* Specimen common stock certificate (filed as Exhibit 4.1 to
Amendment No. 4 to Form SB-2 Registration Statement, filed
October 13, 1999).
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.**
10.1 Stock Purchase Agreement by and among Wattage Monitor, WPG
Software Fund, L.P., WPG Raytheon Software Fund, L.P., WPG
Institutional Software Fund, L.P. and PurchasePro.com,
Inc., dated as of November 28, 2000.**
10.2 PurchasePro.com, Inc. Preferred Supplier Agreement by and
between Wattage Monitor and PurchasePro.com, Inc., dated
as of November 20, 2000.**
10.3 Form of Lock-Up Agreement.**
23.1 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
included in Exhibit 5.1 (included in the opinion filed
as Exhibit 5.1).
23.2 Consent of Grant Thornton LLP.**
24.1 Power of Attorney (See Page II-3).
</TABLE>
-----------------
* Exhibits designated with an asterisk (*) have been previously filed with
the SEC and are incorporated herein by reference to the document referenced
in parentheticals following the descriptions of such exhibits.
** Filed herewith.
