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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No._______)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
PLANETRX.COM, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(6) Amount Previously Paid:
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(7) Form, Schedule or Registration Statement No.:
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(8) Filing Party:
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(9) Date Filed:
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Preliminary Copy
[LOGO OF PLANETRX.COM]
PLANETRX.COM, INC.
349 Oyster Point Blvd., Suite 201
South San Francisco, California 94080
[November 14, 2000]
TO THE STOCKHOLDERS OF PLANETRX.COM, INC.
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders of
PlanetRx.com, Inc., which will be held at the company's offices at 349 Oyster
Point Blvd., Suite 201, South San Francisco, California in "The Cellegy
Conference Room," on [Thursday, November 30, 2000], at [9:00 a.m.] local time.
The purpose of the meeting is to (1) approve an increase in our authorized
common stock; (2) approve the issuance of common stock under a stock purchase
agreement with Alpha Venture Capital, Inc. that provides for the sale by us of
up to $50 million of common stock as we request it over up to a 24-month period
and (3) approve an amendment to our certificate of incorporation effecting a 1-
for-8 reverse stock split. Further details are given in the attached notice of
special meeting and proxy statement.
It is important that your shares be represented and voted at the meeting.
Your vote as a stockholder of PlanetRx.com is important. You may vote your
shares by:
. marking, signing, dating and returning the enclosed proxy card as
promptly as possible in the postage prepaid envelope provided;
. dialing the toll-free voting line at 1-877-PRX-VOTE (1-877-779-8683)
and casting your vote in accordance with the instructions given to you
on the telephone; or
. casting your vote via the Internet at http//:www.eproxyvote.com in
accordance with the instructions provided on the website.
You may also vote in person at the meeting, even if you have used any of
the three options above. If your shares are not registered in your own name and
you plan to attend the meeting and vote your shares in person, you will need to
ask the broker, trust company, bank or other nominee that holds your shares to
provide you with evidence of your share ownership on November 8, 2000 and bring
that evidence to the meeting.
On behalf of the board of directors, I would like to express our
appreciation for your continued interest in the affairs of PlanetRx.com. We look
forward to seeing you at the special meeting.
Sincerely,
______________________________________
Michael Beindorff
Chairman and Chief Executive Officer
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[LOGO OF PLANETRX.COM]
PLANETRX.COM, INC.
349 Oyster Point Blvd., Suite 201
South San Francisco, California 94080
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held [November 30, 2000]
A special meeting of stockholders of PlanetRx.com, Inc. will be held at the
company's offices at 349 Oyster Point Blvd., Suite 201, South San Francisco,
California in "The Cellegy Conference Room," on [Thursday, November 30, 2000],
at [9:00 a.m.] local time for the following purposes:
1. To approve an amendment to our certificate of incorporation increasing
the number of authorized shares of common stock from 100 million to
200 million shares; and
2. To approve the issuance of common stock under a stock purchase
agreement dated as of July 24, 2000 with Alpha Venture Capital, Inc.,
a Cook Islands corporation, which provides for the sale by us of up to
$50 million of our common stock as we request it over up to a 24-month
period;
3. To approve an amendment to our certificate of incorporation effecting
a 1-for-8 reverse stock split; and
4. To transact such other business as may properly come before the
meeting or any adjournments or postponements.
The foregoing items of business are more fully described in the attached
proxy statement.
Only stockholders of record at the close of business on November 8, 2000
are entitled to notice of, and to vote at, the special meeting and at any
adjournments or postponements. A list of such stockholders will be available for
inspection at PlanetRx.com's headquarters located at 349 Oyster Point Blvd.,
Suite 201, South San Francisco, California during ordinary business hours for
the ten-day period before the special meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
________________________________________
Michael Beindorff
South San Francisco, California Chairman and Chief Executive Officer
[November 14, 2000]
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE; OR VOTE TELEPHONICALLY OR VIA THE WEB, IN ACCORDANCE WITH THE
INSTRUCTIONS ON YOUR PROXY CARD. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE
THE MEETING. IF YOU DECIDE TO ATTEND THE MEETING AND WISH TO CHANGE YOUR PROXY
VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
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PLANETRX.COM, INC.
349 Oyster Point Blvd., Suite 201
South San Francisco, California 94080
_____________________________________
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
to be held [November 30, 2000]
These proxy materials are furnished in connection with the solicitation of
proxies by the board of directors of PlanetRx.com, Inc., a Delaware corporation,
for a special meeting of stockholders to be held at the company's offices at 349
Oyster Point Blvd., Suite 201, South San Francisco, California in "The Cellegy
Conference Room," on [Thursday, November 30, 2000], at [9:00 a.m.] local time,
and at any adjournment or postponement of the special meeting. These proxy
materials are first being mailed to stockholders on or about [November 14,
2000].
PURPOSE OF MEETING
The specific proposals to be considered and acted on at the special meeting
are summarized in the accompanying notice of special meeting of stockholders.
Each proposal is described in more detail in this proxy statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
PlanetRx.com's common stock is the only type of security entitled to vote
at the special meeting. On November 8, 2000, the record date for determination
of stockholders entitled to vote at the special meeting, there were ____________
shares of common stock outstanding. Each stockholder of record on the record
date is entitled to one vote for each share of common stock held by the
stockholder on that date. All votes will be tabulated by the inspector of
election appointed for the meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes.
Quorum Required
PlanetRx.com's bylaws provide that the holders of a majority of
PlanetRx.com's common stock issued and outstanding and entitled to vote at the
special meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of business at the meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the presence
of a quorum.
Votes Required
The affirmative vote of the holders of a majority of our outstanding shares
of common stock is required for approval of Proposal 1 and Proposal 3. The
affirmative vote of the holders of a majority of the shares of common stock
present in person or by proxy at the special meeting is required for approval of
Proposal 2. Abstentions and broker non-votes will not be counted as having been
voted on any proposal.
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If there are not sufficient votes to approve the proposals at the time of
the special meeting, the meeting may be adjourned in order to permit further
solicitation of proxies by the board of directors. However, no proxy voted
against a proposal will be voted in favor of an adjournment or postponement to
solicit additional votes in favor of the proposal.
Proxies
Whether or not you are able to attend PlanetRx.com's special meeting, you
are urged to complete and return the enclosed proxy, which is solicited by
PlanetRx.com's board of directors and which will be voted as you direct on your
proxy when properly completed. In the event no directions are specified,
properly completed proxies will be voted "FOR" Proposals 1, 2 and 3, and in the
discretion of the proxy holders as to other matters that may properly come
before the special meeting. You may also revoke or change your proxy at any time
before the special meeting. To do this, send a written notice of revocation or
another signed proxy with a later date to the Secretary of PlanetRx.com at
PlanetRx.com's principal executive offices before the beginning of the special
meeting. You may also automatically revoke your proxy by attending the special
meeting and voting in person. All shares represented by a valid proxy received
before the special meeting will be voted.
Solicitation of Proxies
PlanetRx.com will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this proxy statement, the proxy,
and any additional soliciting material furnished to stockholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to the beneficial owners. In
addition, PlanetRx.com may reimburse such persons for their costs of forwarding
the solicitation material to the beneficial owners. The original solicitation of
proxies by mail may be supplemented by solicitation by telephone, telegram, or
other means by directors, officers, employees or agents of PlanetRx.com. No
additional compensation will be paid to these individuals for these services.
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PROPOSAL 1:
AMENDMENT TO CERTIFICATE OF INCORPORATION AUTHORIZING
AN ADDITIONAL 100 MILLION SHARES OF COMMON STOCK
Our board of directors has proposed amending Article IV of our certificate
of incorporation to increase the number of authorized shares of common stock
from 100 million to 200 million shares. The full text of the proposed amendment
is attached to this proxy statement as Appendix A.
As described in Proposal 2, we have entered into an agreement with Alpha
Venture Capital, Inc., a Cook Islands corporation, to sell up to $50 million of
our common stock from time to time at our election over up to a 24-month period
under what is sometimes called an equity line of credit. Adoption of the
amendment to our certificate of incorporation is required in order for us to
sell more than approximately 49 million shares under the stock purchase
agreement with Alpha. However, adoption of the proposed amendment is not
conditioned on stockholder approval of the transactions with Alpha described in
Proposal 2. If Proposal 1 is approved, authorized shares of common stock that
are not issued to Alpha will be available for issuance from time to time in the
future.
As of November 8, 2000, there were _____ shares of common stock
outstanding. In addition, as of that date, ____ shares were reserved for
issuance under our stock option plans and _____ additional shares were reserved
for issuance under outstanding warrants. Holders of common stock are not
entitled, as a matter of right, to preemptive rights or the right to subscribe
for any other PlanetRX.com securities. The issuance of common stock from time to
time in the future to Alpha or to others could significantly dilute the
interests of existing holders of our common stock.
The affirmative vote of the holders of not less than a majority of our
outstanding shares of common stock is required for approval of the amendment
increasing our authorized shares of common stock from 100 million to 200 million
shares. Broker non-votes and abstentions will not be counted as having been
voted on the proposal.
The board of directors recommends a vote "FOR" the amendment to our
certificate of incorporation increasing the number of authorized shares of
common stock to 200 million. All proxies solicited by the board of directors
will be voted "FOR" Proposal 1 unless stockholders specify in their proxies a
contrary choice.
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PROPOSAL 2:
APPROVAL OF ISSUANCE OF STOCK TO ALPHA
The board of directors also is seeking stockholder approval for the
issuance of common stock under a stock purchase agreement with Alpha Venture
Capital, Inc., a Cook Islands corporation, providing for the sale to Alpha of up
to $50 million of our common stock from time to time at our election over up to
a 24-month period. We signed the stock purchase agreement with Alpha on July
25, 2000. The agreement establishes what is sometimes called an equity line of
credit or an equity draw down facility. We may make periodic draws in exchange
for shares of our common stock. The amount of each draw and the number and
price of the shares so sold will depend on the trading price and trading volume
of our common stock around the time of the draw.
Because our common stock is listed on the Nasdaq National Market, we are
required to comply with Nasdaq's listing rules. One of those rules provides
that we must get stockholder approval before we issue common stock or securities
convertible into or exercisable for common stock in a private offering if:
. the price at which we will issue the common stock is less than the
greater of book or market value of the common stock; and
. the number of shares to be issued will equal 20% or more of the number
of shares of common stock outstanding or 20% or more of the voting
power outstanding at the closing of the transaction that gave rise to
the issuance.
The amount of common stock we expect to issue Alpha under the stock
purchase agreement exceeds 20% of the number of shares of common stock we had
outstanding on July 25, 2000, the date of closing of the agreement. The
majority of those shares will be issued at less than the greater of book or
market value of our common stock.
We are also seeking stockholder approval under a Nasdaq listing rule that
requires stockholder approval for stock issuances that will result in a change
of control. Depending on the number of shares sold to Alpha under the agreement
and on the extent of resales of the shares by Alpha, Alpha could own a majority
of our outstanding common stock as a result of purchases under the draw down
facility.
Need for Additional Capital
Since our organization in 1995, we have incurred significant losses and
negative cash flow, and we expect operating losses and negative cash flow to
continue for the foreseeable future. As of June 30, 2000, we had an accumulated
deficit of $196.8 million. We expect to incur additional costs and expenses
related to:
. marketing and customer acquisition and other promotional activities;
. the continued development of the PlanetRx.com website, our computer
network and the systems that we use to process customers' orders and
payments;
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. the continued development of healthcare-related content on the
PlanetRx.com website;
. the development of marketing and distribution relationships with
strategic business partners; and
. the establishment and development of relationships in the healthcare
industry.
The stock purchase agreement with Alpha provides an attractive mechanism
for raising capital. Alpha has committed to provide us up to $50 million as we
request it for a 12-month period, in return for common stock. If we draw down a
minimum of $10 million during the first 12-month period, we may extend the term
of our agreement an additional 12 months. Once every 10 trading days, we may
request a draw down of no less than $500,000 and up to $8 million, subject to a
cap based on the trading price and volume of our common stock. We expect to use
the proceeds from the stock sales to Alpha for working capital and capital
expenditures, including the uses outlined above.
We currently expect that our available cash resources combined with the
maximum draw down under our agreement with Alpha will be sufficient to meet our
anticipated working capital and capital expenditure requirements for at least
the next 12 months. However, if our stock price and trading volume decline from
current levels, we may not be able to draw down all $50 million under the
agreement, and our available cash resources may only meet our requirements for
the next six months.
Description of Alpha
Alpha Venture Capital is engaged in the business of investing in publicly
traded equity securities for its own account. Alpha's principal offices are
located at Cumberland House, Cumberland Street, Nassau, New Providence, The
Bahamas. Investment decisions for Alpha are made by its board of directors.
Other than the warrants we issued to Alpha in connection with signing the stock
purchase agreement, Alpha does not currently own any of our securities as of the
date of this proxy statement. Other than its obligation to purchase common
shares under the stock purchase agreement, it has no other commitments or
arrangements to purchase or sell any of our securities. There are no business
relationships between Alpha and us, other than the stock purchase agreement.
Description of Stock Purchase Agreement
Our stock purchase agreement with Alpha establishes what is sometimes
termed an equity line of credit or an equity draw down facility. In general,
the draw down facility operates like this: Alpha has committed to provide us up
to $50 million as we request it in return for common stock we issue to Alpha.
Once every 10 trading days, we may request a draw of up to $8 million of that
money. The maximum amount we actually can draw down upon each request will be
determined by the trading volume and price of our common stock for the 20
trading days before our request. Each draw down must be for at least $500,000.
At the end of a 10 day trading period following the draw down request, the per
share price is determined based on the five lowest volume-weighted average daily
prices of the common stock during that 10 day period. We then divide the draw
down amount by the per share purchase price to determine the number of shares we
will issue to Alpha in return for that money.
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The total of all draws cannot exceed $50 million, and no single draw can
exceed $8 million. We are under no obligation to request a draw for any period.
The per share dollar amount Alpha pays for our common stock upon each draw
down includes a 9% discount from the five lowest daily volume-weighted average
prices of our common stock for the 10-day period after our draw down request.
The percentage discount will get smaller if our stock rises above $1.50 per
share after we submit a draw down notice but before the draw down funding date.
For each draw down, we also must issue to Alpha warrants to purchase our common
stock. A description of the warrants which will be issued to Alpha upon draw
downs is described in more detail below.
Based on a review of our trading volume and stock price history and the
number of draw downs we estimate making, we are registering with the Securities
and Exchange Commission for resale by Alpha 95,320,000 shares of common stock
for possible issuance under the stock purchase agreement. In addition, we are
registering 4,680,000 shares of common stock issuable upon exercise of 500,000
warrants we have granted to Alpha and additional warrants we must grant to Alpha
at each draw down closing.
Amount of the Draw
No draw can be less than $500,000, more than $8 million or more than 400%
of the dollar amount of the average daily trading volume of the common stock,
calculated based on the average closing bid price and average daily trading
volume for the 20 consecutive trading days immediately before the related draw
down notice date. Subject to those limitations, the amount we can draw down is
the amount we request in our draw down notice.
We cannot make another draw down request until expiration of the 10 trading
days that follow a draw down request we have already made.
Price Per Share and Number of Shares
The 10 trading days immediately following the draw down notice are used to
determine the price per share of the common stock that we will issue in return
for the money provided by Alpha, and thus the number of shares that Alpha will
receive.
To determine the price per share of common stock that we must issue in
connection with the draw down, take the average of the 5 lowest reported daily
volume-weighted average prices of our common stock for the 10 trading days
immediately after the draw down notice, and multiply it by the draw down
discount calculation percentage. The draw down discount calculation percentage
is initially equal to 91%. However, for each $.50 that the common stock's
market price increases from $1.50 as of the related draw down request date, the
draw down discount calculation percentage will increase incrementally by .25%,
to a maximum of 97%.
To determine the number of shares we will issue, we will divide the dollar
amount of our draw down request by the per share price of the common stock.
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Sample Calculation of Stock Purchases
The following is an example of the calculation of the draw down amount and
the number of shares we would issue to Alpha in connection with that draw down
based on hypothetical assumptions.
i. Sample Draw Down Amount Calculation
In this example, suppose we provide notice to Alpha that we wish to make a
draw down. Suppose the average daily trading volume for the 20 days before our
draw down notice is 800,000 shares and that the average closing bid price of our
common stock for the 20 days before the notice is $0.63 per share. The dollar
amount of the average daily trading volume of the common stock is 800,000
multiplied by $0.63, or $504,000. We cannot draw down more than 400% of that
number, or $2,016,000.
ii. Sample Calculation of Per Share Price and Number of Shares
Assume the following:
. that we have made a draw down request that is capped at $2,016,000
based on the formula above;
. that the average of the 5 lowest reported daily volume-weighted
average prices of the common stock for the 10 trading days immediately
after the draw down notice is $0.68; and
. that the market price for the common stock was not above $1.50 as of
the related draw down date, and therefore the draw down discount
calculation percentage is 91%.
Based on these assumptions, the price per share that that Alpha would pay for
these shares would be $0.68 multiplied by 91%, or $0.6188. Therefore, based on
the maximum allowable draw down of $2,016,000 in this situation, we would issue
approximately 3,257,919 shares to Alpha.
On August 31, 2000, we had 51,042,081 shares of common stock outstanding.
The following table shows the number of shares we would issue to Alpha and the
price it would pay for those shares given the hypothetical variables shown in
the table, if
. we requested draw downs of the maximum amounts under the stock
purchase agreement;
. we requested as many draws as possible per year for the two year term
of the agreement, assuming we issue at least $10 million in common
stock the first year and assuming no more than 25 draws per year; and
. the trading volume and the price in the table is (1) the average daily
trading volume and average closing bid price of our common stock for
the 20 trading days before each draw down request under the common
stock purchase agreement and (2) the
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average of the five lowest volume-weighted average daily prices for
the ten trading days after our draw down request.
<TABLE>
<CAPTION>
Number of Shares
Total Amount Drawn Under Issuable to Alpha under
Average Closing Average Daily Common Stock Purchase Common Stock Price per share
Bid Price Trading Volume Agreement Purchase Agreement paid by Alpha
--------------- -------------- ------------------------ ----------------------- ---------------
<S> <C> <C> <C> <C>
$0.39/(1)/ 446,518/(4)/ $34,828,404/(7)/ 99,135,824 $0.355
0.78/(2)/ 893,036/(5)/ 50,000,000/(8)/ 70,422,378 0.710
1.17/(3)/ 1,339,554/(6)/ 50,000,000/(8)/ 46,961,585 1.065
</TABLE>
_______________________
/(1)/ Based on 50% of the closing bid price of our common stock on August 31,
2000.
/(2)/ Based on the closing bid price of our common stock on August 31, 2000.
/(3)/ Based on 150% of the closing bid price of our common stock on August 31,
2000.
/(4)/ Based on 50% of the average trading volume of our common stock for the 20
trading days preceding August 31, 2000.
/(5)/ Based on the average daily trading volume of our common stock for the 20
trading days before August 31, 2000.
/(6)/ Based on 150% of the average trading volume of our common stock for the 20
trading days before August 31, 2000.
/(7)/ Based on 50 draws over a two-year period.
/(8)/ Based on the maximum $50,000,000 available under the stock purchase
agreement.
Draw down Warrants
In addition to the common stock we will issue upon each draw down, we will
issue to Alpha warrants to purchase our common stock. The number of shares of
common stock purchasable on exercise of these warrants is based on the amount of
our draw down request, but will not exceed 4,180,000. To obtain the number of
shares of common stock purchasable on exercise of the warrants, multiply the
draw down dollar amount by 4,180,000 and divide by $50 million, which is the
maximum draw down amount under the common stock purchase agreement. Using the
examples above, for a draw down of $2,016,000, we would issue a warrant to
purchase 168,538 shares of common stock. Each warrant would be exercisable for
three years from the date of its issuance.
The exercise price for these warrants is 120% of the closing price of our
common stock on the date we receive the draw down funds. The warrants may be
exercised for cash or by a cashless exercise mechanism. A cashless exercise
means that Alpha will receive shares of common stock with a total market value
equal to the excess per share of the market value of the common stock over the
exercise price, multiplied by the number of shares being exercised.
Necessary Conditions Before Alpha is Obligated to Purchase our Shares
The following conditions must be satisfied before Alpha is obligated to
purchase the common stock that we wish to sell from time to time:
. A registration statement for the shares must be declared effective by
the Securities and Exchange Commission and must remain effective and
available as of the draw down settlement date for making resales of
the common stock purchased by Alpha;
. There can be no material adverse change in our business, operations,
properties, prospects or financial condition;
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. The representations and warranties we made in the common stock
purchase agreement must be accurate in all material respects on the
draw down closing date;
. No statute, rule, regulation, executive order, decree, ruling or
injunction may be in effect which prohibits completion of the
transactions contemplated by the stock purchase agreement; and
. Trading in our common stock must not have been suspended by the
Securities and Exchange Commission or the Nasdaq National Market.
On each draw down closing date for the sale of shares, we must deliver an
opinion from our counsel about these matters.
Costs
At the closing of the transaction on July 25, 2000, we delivered the
requisite opinion of counsel to Alpha and paid $45,000 for Alpha's legal and
administrative costs. We are also obligated to pay Alpha's legal counsel $4,500
upon its initial review of the registration statement we are filing with the
Securities and Exchange Commission for Alpha's resales, and $2,000 for each
review of amendments or supplements to the registration statement. At closing,
we also issued three-year warrants to purchase 500,000 shares of our common
stock to Alpha with an exercise price equal to the lesser of $1.375 and 120% of
the average closing bid for our common stock for the three consecutive trading
days before the effectiveness of the registration statement we have filed with
the Securities and Exchange Commission for Alpha's resales.
Termination of the Stock Purchase Agreement
The stock purchase agreement expires 12 months after the registration
statement we have filed with the Securities and Exchange Commission is declared
effective, which we estimate will occur in December 2000. However, if during
the initial term of the agreement we draw down at least $10 million, the stock
purchase agreement will be extended for an additional 12 months unless we give
Alpha notice that we do not wish to extend the term of the agreement. The stock
purchase agreement can otherwise be terminated by Alpha only if we breach the
agreement to the extent that applicable law would permit Alpha to terminate the
agreement.
Rights of First Refusal
As part of the stock purchase agreement, Alpha has rights of first refusal
if we issue equity in a private transaction. Alpha can purchase the equity on
terms equal to or better than the terms we intend to offer to third parties.
The right of first refusal does not arise if we issue equity to strategic
partners, in an acquisition transaction or upon exercise or conversion of
existing securities.
Registration Rights
To permit Alpha to resell the shares issued to it under the stock purchase
agreement, we agreed to register those shares and to maintain that registration
until the earliest of any of the following dates:
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. the date which is one year after delivery to Alpha of all of the
common stock and warrants issuable under the common stock purchase
agreement; and
. the date after which all of the common shares held by Alpha that are
covered by the registration statement may be sold, in the opinion of
our counsel, under Rule 144 under the Securities Act of 1933
irrespective of any applicable volume limitations.
Our registration rights agreement with Alpha permits us to restrict the
resale of the shares Alpha has purchased from us under the common stock purchase
agreement for a period of time sufficient to permit us to amend or supplement
the prospectus to include material information. If we restrict Alpha for more
than 10 consecutive trading days, we will pay Alpha $1,000 per day each day
after the 10 day period and until the restriction is lifted, but only if Alpha
holds at least 10,000 shares of our common stock.
We have agreed to pay all of Alpha's expenses in connection with the
registration, including attorney's fees but excluding sales commissions and
underwriting fees. In addition, we have agreed to indemnify Alpha, its directors
and officers, and any persons controlling Alpha, against liabilities under the
securities laws relating to the registration statement, or any violations by us
of the securities laws in connection with Alpha's offering under the
registration statement.
We filed a registration statement with the Securities and Exchange
Commission on October 11, 2000 covering the resale of up to 95,320,000 shares of
common stock that we estimate we may sell the Alpha under the stock purchase
agreement and 4,680,000 shares of common stock issuable to Alpha upon exercise
of warrants it owns or will own upon draw downs.
Consequences of Stock Sales to Alpha
Dilution
The sale of stock to Alpha will result in immediate and substantial
dilution to the existing holders of our common stock. The market price for our
common stock on November 8, 2000 was $_____, and the average daily trading
volume for the 20 trading days ended on that date was ______. If that 20-day
average trading volume remained constant over the initial 12-month term of the
stock purchase agreement and we requested the maximum amount available to us
under that agreement, each draw would be capped at $______, we could make _____
draws for a total amount drawn of $50 million, and we would issue a total of
______ shares of common stock to Alpha and warrants to acquire an additional
_______ shares. Based on __________ shares of our common stock outstanding on
November 8, 2000, the shares so purchased by Alpha, without giving effect to the
exercise of its warrants, would constitute immediately after issuance
approximately ___ % of our outstanding common stock.
Potential Adverse Effect on Stock Price and Nasdaq Delisting
Alpha has advised us that it intends to resell a substantial portion of the
common stock it purchases from us immediately following purchase. If Alpha or
other stockholders sell substantial amounts of our common stock in the public
market, the market price of our common stock could fall. These sales also might
make it more difficult for us to sell common stock or equity-related securities
in the future at a time and price that we deem appropriate.
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<PAGE>
On September 15, 2000, we received a notice from Nasdaq that our common
stock has failed to maintain a minimum closing bid price of $1.00 over the last
30 consecutive trading days as required for continued listing on the Nasdaq
National Market. The notice states that if at any time before December 14, 2000,
the closing bid price of our common stock is not at least $1.00 for a minimum of
10 consecutive trading days, Nasdaq will reevaluate our compliance with its
listing qualifications. Our board of directors has proposed a 1-for-8 reverse
stock split to increase the price of our common stock to comply with Nasdaq
listing requirements. See Proposal 3.
Alpha is not required to honor our draw down requests during any period in
which our common stock is not listed on the Nasdaq National Market.
Possible Change of Control
Based on __________ shares of our common stock outstanding on November 8,
2000, if Alpha buys at least __________ shares under the stock purchase
agreement and does not resell any of the shares, Alpha will control a majority
of our outstanding common stock. Alpha would then be in a position to control
the election of directors and any other matter submitted to a vote of our
stockholders, including mergers and other extraordinary corporate transactions.
Vote Required
The affirmative vote of the holders of a majority of the shares of common
stock present in person or by proxy at the special meeting is required for
approval of the issuance of common stock under the stock purchase agreement with
Alpha. Broker non-votes and abstentions will not be counted as having been voted
on the proposal. The adoption of Proposal 2 is conditioned on the adoption of
Proposal 1.
The board of directors recommends a vote "FOR" approval of the stock
issuances to Alpha. All proxies solicited by the board of directors will be
voted "FOR" Proposal 2 unless stockholders specify in their proxies a contrary
choice.
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<PAGE>
PROPOSAL 3:
AMENDMENT TO CERTIFICATE OF INCORPORATION
EFFECTING A ONE-FOR-EIGHT REVERSE STOCK SPLIT
Our board of directors has proposed amending Article IV of our certificate
of incorporation to effect a 1-for-8 reverse stock split. The proposed amendment
will reduce the number of issued and outstanding shares of our common stock by
approximately 7/8's, with each 8 shares of common stock currently
outstanding, referred to as "old common stock," becoming 1 share of "new common
stock." The text of the proposed amendment is attached to this proxy statement
as Appendix B.
Purpose of the Reverse Stock Split
The purpose of the reverse stock split is to facilitate continued listing
of our common stock on the Nasdaq National Market. On September 15, 2000, we
received a notice from Nasdaq that our common stock has failed to maintain a
minimum bid price of $1.00 over the last 30 consecutive trading days as required
for continued listing on the Nasdaq National Market. The notice states that if
at any time before December 14, 2000, the closing bid price of our common stock
is not at least $1.00 for a minimum of 10 consecutive trading days, Nasdaq will
reevaluate our compliance with its listing qualifications. Since July 1, 2000,
the closing bid price of our common stock has ranged from $0.4375 to $1.50 per
share.
If the market price for our common stock remains below $1.00 per share and
we are no longer listed on the Nasdaq National Market, our common stock may be
deemed to be penny stock. If our common stock is considered penny stock, it
would be subject to rules that impose additional sales practices on broker-
dealers who sell our securities. For example, broker-dealers must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. Also, a disclosure schedule
must be prepared before any transaction involving a penny stock, and disclosure
is required about (1) sales commissions payable to both the broker-dealer and
the registered representative and (2) current quotations for the securities.
Monthly statements are also required to be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stock. Because of these additional obligations, some
brokers may not effect transactions in penny stocks. This could have an adverse
effect on the liquidity of our common stock.
The board of directors believes that the reverse stock split is likely to
result in the bid price of our common stock increasing over the $1.00 minimum
bid price requirement, thereby permitting the continued listing of our common
stock on the Nasdaq National Market. However, there can be no assurance that the
market price of our common stock will rise in proportion to the reduction in the
number of outstanding shares resulting from the reverse stock split or that the
market price of our common stock will remain above $1.00 after the split.
Effectiveness of the Reverse Stock Split
If Proposal 3 is approved by stockholders, the reverse stock split would
become effective at such time as we file the amendment to our certificate of
incorporation with the Secretary of State of Delaware. Even if the reverse stock
split is approved by stockholders, our board of directors has discretion not to
carry out the reverse stock split if it determines that the split is not
necessary to avoid the delisting of our common stock from the Nasdaq National
Market, based on market prices at the time, or it determines that the split will
not be beneficial for any other reason. Upon the
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<PAGE>
filing of the amendment, all the old common stock will be converted into new
common stock as set forth in the amendment.
Certificates and Fractional Shares
As soon as practicable after the effective date, PlanetRx will request all
stockholders to return their stock certificates representing shares of old
common stock outstanding on the effective date in exchange for certificates
representing the number of whole shares of new common stock into which the
shares of old common stock have been converted as a result of the reverse stock
split. Each stockholder will receive a letter of transmittal from PlanetRx's
transfer agent containing instructions on how to exchange certificates.
STOCKHOLDERS SHOULD NOT SUBMIT THEIR OLD CERTIFICATES TO THE TRANSFER AGENT
UNTIL THEY RECEIVE THESE INSTRUCTIONS. In order to receive new certificates,
stockholders must surrender their old certificates in accordance with the
transfer agent's instructions, together with the properly executed and completed
letter of transmittal.
Beginning with the effective date, each old certificate, until surrendered
and exchanged as described above, will be deemed for all purposes to evidence
ownership of the number of whole shares of new common stock into which the
shares evidenced by the old certificates have been converted.
No fractional shares will be issued. In lieu of any fractional shares, each
holder of old common stock who would otherwise have been entitled to a fraction
of a share of new common stock upon surrender of the holder's certificates will
be entitled to receive a cash payment, without interest, determined by
multiplying (i) the fractional interest to which the holder would otherwise be
entitled, after taking into account all shares of old common stock then held of
record by the holder, and (ii) the average last sale price of shares of old
common stock for the 20 trading days immediately before the effective date or,
if no such sale takes place on such days, the average of the closing bid and
asked prices for such days, in each case as officially reported on the Nasdaq
National Market.
Effects of the Reverse Stock Split
The principal effect of the reverse stock split will be to decrease the
number of shares of common stock outstanding from approximately 51,000,000
shares to approximately 6,375,000 shares. In addition, the board will take
appropriate action to adjust proportionately the number of shares of common
stock issuable upon exercise of outstanding options, and to adjust the related
exercise prices, to reflect the reverse stock split. As a result, following the
effective date, the number of shares of common stock issuable upon the exercise
of outstanding options will be reduced from approximately 5,900,000 shares to
approximately 738,000 shares.
The reduction in the number of outstanding shares is expected to increase
the bid price of our common stock, although there can be no assurance that the
price will increase in inverse proportion to the 1-for-8 reverse stock split
ratio. The trading price of our common stock depends on many factors, including
many which are beyond our control. The higher stock price may increase investor
interest and reduce resistance of brokerage firms to recommend the purchase of
our common stock.
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<PAGE>
The liquidity of our common stock may be adversely affected by the reduced
number of shares outstanding after the reverse stock split. In addition, the
split will increase the number of stockholders who own odd-lots. An odd-lot is
fewer than 100 shares. Stockholders who hold odd-lots may experience an increase
in the cost of selling their shares and may have greater difficulty in making
sales.
The shares of new common stock will be fully paid and non-assessable. The
amendment will not change the terms of our common stock. The shares of new
common stock will have the same voting rights and rights to dividends and
distributions and will be identical in all other respects to the common stock
now authorized. Because no fractional shares of new common stock will be issued,
any stockholder who owns fewer than 8 shares of old common stock will cease to
be a stockholder of PlanetRx on the effective date. We do not anticipate that
the reverse stock split will result in any material reduction in the number of
holders of common stock. Each stockholder's percentage ownership of the new
common stock will not be altered except for the effect of eliminating fractional
shares. We estimate that it will cost between $50,000 and $250,000 to pay for
fractional shares.
Because our authorized common stock will not be reduced, the overall effect
will be an increase in authorized but unissued shares of common stock as a
result of the reverse stock split. These shares may be issued by our board of
directors in its discretion. Any future issuance will have the effect of
diluting the percentage of stock ownership and voting rights of the present
holders of common stock.
While the board of directors believes it advisable to authorize and approve
the reverse stock split for the reasons set forth above, the board is aware that
the increase in the number of authorized but unissued shares of common stock may
have a potential anti-takeover effect. Our ability to issue additional shares
could be used to thwart persons, or otherwise dilute the stock ownership of
stockholders seeking to control PlanetRx. The reverse stock split is not being
recommended by the board as part of an anti-takeover strategy.
Certain Federal Income Tax Consequences
The following description of certain federal income tax consequences is
based on the Internal Revenue Code of 1986, as amended, applicable Treasury
Regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this proxy
statement. This discussion is for general information only and does not discuss
consequences which may apply to special classes of taxpayers (for example,
nonresident aliens, broker-dealers or insurance companies) or any aspects of
state, local or foreign tax laws. Stockholders are urged to consult their own
tax advisors to determine the particular tax consequences to them of the reverse
stock split.
PlanetRx has been advised that because the reverse stock split is not part
of a plan to increase periodically a stockholder's proportionate interest in the
assets or earnings and profits of the company, the reverse stock split should
not result in the recognition by stockholders of any gain or loss for federal
income tax purposes (except to the extent of the cash received in lieu of
fractional shares). The holding period for each share of new common stock
received by a stockholder will include the stockholder's holding period for its
shares of old common stock with respect to which the shares of new common stock
are issued, provided that the shares of old common stock were held as capital
assets. The adjusted tax basis of each share of new common
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stock received by a stockholder (including the fractional share for which cash
is received) will be the same as the adjusted tax basis of the shares of old
common stock with respect to which the share of new common stock is issued. A
stockholder who receives cash in lieu of a fractional share of new common stock
generally will recognize taxable gain or loss equal to the difference, if any,
between the amount of cash received and the portion of the stockholder's
aggregate adjusted tax basis in the shares of old common stock allocated to the
fractional share. If the shares of old common stock allocated to the fractional
shares were held by the stockholder as capital assets, the gain or loss
resulting from the payment of cash in lieu of the issuance of a fractional share
will be taxed as capital gain or loss.
Vote Required
The affirmative vote of the holders of the majority of our outstanding
shares of common stock is required for approval of the reverse stock split.
Broker non-votes and abstentions will not be counted as having been voted for
the proposal. The adoption of Proposal 3 is not conditioned on the adoption of
Proposal 1 or 2.
Stockholders have no right under Delaware law or our Certificate of
Incorporation or bylaws to exercise dissenters' rights of appraisal with respect
to the reverse stock split.
The board of directors recommends a vote "FOR" approval of the amendment
effecting the reverse stock split. All proxies solicited by the board of
directors will be voted "FOR" Proposal 3 unless stockholders specify in their
proxies a contrary choice.
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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information about the beneficial ownership of
our common stock as of August 31, 2000. We have listed (1) each person that
beneficially owns more than 5% of the outstanding common stock, (2) each of our
directors, (3) each of our executive officers identified in the summary
compensation table in our annual meeting proxy statement, and (4) all directors
and executive officers as a group. Unless otherwise indicated, each of the
stockholders has sole voting and investment power with respect to the shares
beneficially owned.
<TABLE>
<CAPTION>
Number of Shares Percentage of Shares
Name of Beneficial Owner (1) Beneficially Owned Beneficially Owned
-------------------------------------------------------- ---------------------- ------------------------
<S> <C> <C>
Officers and Directors:
William J. Razzouk (2).................................. 1,775,666 3.5%
John McAlpin (3)........................................ 383,333 *
Allan Goldman (4)....................................... 291,250 *
David M. Beirne (5)..................................... 5,392,342 10.6
Terrence C. Burke....................................... 200,000 *
Christos Cotsakos (6)................................... 848,194 1.7
Michael Moritz (7)...................................... 5,334,989 10.5
Terrence Arndt (8)...................................... 10,269,990 20.1
Other 5% Stockholders:
Entities affiliated with Benchmark Capital (9).......... 5,334,989 10.5
2480 Sand Hill Road, Suite 200
Menlo Park, California 94025
Entities affiliated with Sequoia Capital(10)............ 5,334,989 10.5
3000 Sand Hill Road
Building 4, Suite 280
Menlo Park, California 94025
Express Scripts, Inc.................................... 10,269,990 20.1
13900 Riverport Drive
St. Louis, Missouri 63043
All executive officers and directors
as a group (12 persons) (11)............................ 24,340,169 45.9%
</TABLE>
________________________
* Represents beneficial ownership of less than 1%.
[Footnotes continued on following page]
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(1) Unless otherwise indicated, the address of each of the individuals listed
in the table is c/o PlanetRx.com, Inc., 349 Oyster Point Road, Suite 201,
South San Francisco, California 94080.
(2) As of the third quarter 2000, William Razzouk is neither an executive
officer nor a director. Accordingly, he has not been included in the
figures for directors and executive officers as a group.
(3) Includes options immediately exercisable for 150,000 shares.
(4) Includes options immediately exercisable for 275,000 shares.
(5) Includes 50,000 shares held by Ramsey/Beirne Associates and 5,334,989
shares held by Benchmark Capital Partners II, as nominee for Benchmark
Capital Partners II, L.P., Benchmark Founders' Fund II, L.P., Benchmark
Founders' Fund II-A, and Benchmark Members' Fund II, L.P. Mr. Beirne serves
as chairman of Ramsey/Beirne Associates, is a managing member of Benchmark
Capital Management Co. II, LLC, the general partner of Benchmark Capital
Partners II, L.P., Benchmark Founders' Fund II, L.P., Benchmark Founders'
Fund II-A, and Benchmark Members' Fund II, and is a director of
PlanetRx.com. He disclaims beneficial ownership of these shares held by
Ramsey/Beirne Associates and the Benchmark funds, except with respect to
7,353 shares and to the extent of his pecuniary interest therein.
(6) Includes 208,628 shares held by the Cotsakos Revocable Trust u/a/d 9/3/87
and 10,463 shares held by Christos M. Cotsakos C/F Suzanne R. Cotsakos CA
UTMA, as well as 629,092 shares held by the E*TRADE Group, Inc. Mr.
Cotsakos is chairman and chief executive officer of the E*TRADE Group, Inc.
and a director of PlanetRx.com. He disclaims beneficial ownership of the
shares held by E*TRADE Group, Inc.
(7) Includes:
. 4,835,101 shares held by Sequoia Capital VIII;
. 61,352 shares held by Sequoia International Technology Partners VIII;
. 320,099 shares held by Sequoia International Technology Partners
VIII(Q);
. 106,698 shares held by CMS Partners, LLC; and
. 11,737 shares held by Sequoia 1997.
(8) Consists of 10,369,990 shares beneficially owned by Express Scripts, Inc.
Mr. Arndt is Vice President of Marketing for Express Scripts and a director
of PlanetRx.com. He disclaims beneficial ownership of the shares held by
Express Scripts.
(9) Consists of 5,334,989 shares held by Benchmark Capital Partners II, L.P.
as nominee for Benchmark Capital Partners II, L.P., Benchmark Founders'
Fund II, L.P., Benchmark Founders' Fund II-A, and Benchmark Members' Fund
II, L.P.
(10) Consists of: 4,835,101 shares held by Sequoia Capital VIII;
. 4,835,101 shares held by Sequoia Capital VIII;
. 61,352 shares held by Sequoia International Technology Partners VIII;
. 320,099 shares held by Sequoia International Technology Partners
VIII(Q);
. 106,698 shares held by CMS Partners, LLC; and
. 11,737 shares held by Sequoia 1997.
(11) Includes options immediately exercisable for 1,971,074 shares.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholder proposals intended to be presented at the 2001 annual meeting
must be received by PlanetRx.com at its offices at 349 Oyster Point Blvd., Suite
201, South San Francisco, California 94080, Attn: Investor Relations, not later
than January 1, 2001 and satisfy the conditions established by the Securities
and Exchange Commission for stockholder proposals to be included in
PlanetRx.com's proxy statement for that meeting. Under Rule 14a-4(c) of the
Securities Exchange Act of 1934, a stockholder proposal intended to be presented
at the 2001 annual meeting must be received by PlanetRx.com at its offices at
349 Oyster Point Blvd., Suite 201, South San Francisco, California 94080, Attn:
Investor Relations, not later than March 16, 2001 in order to prevent the board
of directors' proxy holders from using their discretionary voting authority to
vote on the
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<PAGE>
proposal when the proposal is raised at the 2001 annual meeting, even though
there is no discussion of the proposal in PlanetRx.com's proxy statement for
that meeting.
OTHER MATTERS
The board knows of no other matters to be presented for stockholder action
at the special meeting. However, if other matters do properly come before the
special meeting or any adjournments or postponements, the board intends that the
persons named in the proxies will vote on such matters in accordance with their
best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
_______________________________________
Michael Beindorff
Chairman and Chief Executive Officer
South San Francisco, California
[November 14, 2000]
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-
PAID ENVELOPE; OR VOTE TELEPHONICALLY OR VIA THE WEB, IN ACCORDANCE WITH THE
INSTRUCTIONS ON YOUR PROXY CARD. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO
THE SPECIAL MEETING. IF YOU DECIDE TO ATTEND THE SPECIAL MEETING AND WISH TO
CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE
MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE SPECIAL MEETING.
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<PAGE>
APPENDIX A
AMENDMENT TO
RESTATED CERTIFICATE OF INCORPORATION
OF PLANETRX.COM, INC.
INCREASING THE NUMBER OF SHARES OF COMMON STOCK
The first paragraph of Article IV of the corporation's Restated Certificate
of Incorporation shall be amended to read in full as follows:
"This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total
number of shares that this corporation is authorized to issue is two
hundred five million (205,000,000) shares. Two hundred million
(200,000,000) shares shall be Common Stock, par value $.0001 per share, and
five million (5,000,000) shares shall be Preferred Stock, par value $.0001
per share."
<PAGE>
APPENDIX B
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
OF PLANETRX.COM, INC. EFFECTING A REVERSE STOCK SPLIT
A new second paragraph to Article IV of the corporation's Restated
Certificate of Incorporation shall be added as follows:
"Simultaneously with the effective date of the filing of this amendment to
the corporation's Restated Certificate of Incorporation (the "Effective
Date"), each eight shares of Common Stock of the corporation issued and
outstanding or held as treasury shares immediately prior to the Effective
Date (the "Old Common Stock") shall automatically be reclassified and
continued (the "Reverse Split"), without any action on the part of the
holder thereof, as one share of Common Stock. The Corporation shall not
issue fractional shares on account of the Reverse Split. Holders of Old
Common Stock who would otherwise be entitled to a fraction of a share on
account of the Reverse Split shall receive, upon surrender of the stock
certificates formerly representing shares of the Old Common Stock, in lieu
of such fractional share, an amount in cash (the "Cash-in-Lieu Amount")
equal to the product of (i) the fractional share which a holder would
otherwise be entitled to, multiplied by (ii) the average of the last sale
price per share of the Old Common Stock on the 20 trading days immediately
prior to the Effective Date or, if no such sale takes place on such days,
the average of the closing bid and asked prices thereof for such days, in
each case as officially reported on the Nasdaq National Market. No interest
shall be payable on the Cash-in-Lieu Amount."
<PAGE>
Preliminary Copy
PROXY PLANETRX.COM, INC. PROXY
349 Oyster Point Blvd., Suite 201, South San Francisco, CA 94080
This Proxy is Solicited on Behalf of the Board of Directors
of PlanetRx.com, Inc.
for the Special Meeting of Stockholders to be held [November 30, 2000]
The undersigned holder of common stock, par value $.0001, of PlanetRx.com,
Inc. hereby appoints Michael Beindorff and Dorothy An, or either of them,
proxies for the undersigned, each with full power of substitution, to represent
and to vote as specified in this proxy all common stock of PlanetRx.com that the
undersigned stockholder would be entitled to vote if personally present at the
special meeting of stockholders to be held on [Thursday, November 30, 2000] at
[9:00 a.m.] local time, at the company's offices at 349 Oyster Point Blvd.,
Suite 201, South San Francisco, California in "The Cellegy Conference Room," and
at any adjournments or postponements of the special meeting. The undersigned
stockholder hereby revokes any proxy or proxies heretofore executed for such
matters.
This proxy, when properly executed, will be voted in the manner as directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3, AND IN THE DISCRETION OF THE PROXIES AS TO
ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING. The undersigned
stockholder may revoke this proxy at any time before it is voted by delivering
to the corporate secretary of PlanetRx.com either a written revocation of the
proxy or a duly executed proxy bearing a later date, or by appearing at the
special meeting and voting in person.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2 AND 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE. If you receive more than one proxy card, please sign and return
ALL cards in the enclosed envelope.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
(Reverse)
PLANETRX.COM, INC.
Please mark votes
[X] as in this example
1. To approve an amendment to our certificate of incorporation increasing
the number of authorized shares of common stock from 100 million to
200 million shares.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. To approve a stock purchase agreement dated as of July 25, 2000 with
Alpha Venture Capital, Inc., a Cooks Island corporation, providing for
the sale by us of up to $50 million of our common stock.
FOR AGAINST ABSTAIN
[_] [_] [_]
Approval of Proposal 2 is conditioned on approval of Proposal 1.
3. To approve an amendment to our certificate of incorporation effecting
a 1-for-8 reverse stock split.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
FOR AGAINST ABSTAIN
[_] [_] [_]
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the special meeting.
The undersigned acknowledges receipt of the accompanying notice of special
meeting of stockholders and proxy statement.
Signature:_________________ Signature (if held jointly):________________
Date:_________, 2000
Please date and sign exactly as your name(s) is (are) shown on the share
certificate(s) to which the proxy applies. When shares are held as joint
tenants, both should sign. When signing as an executor, administrator, trustee,
guardian, attorney-in fact or other fiduciary, please give full title as such.
When signing as a corporation, please sign in full corporate name by president
or other authorized officer. When signing as a partnership, please sign in
partnership name by an authorized person.
