As filed with the Securities and Exchange Commission on March 25, 1998
Registration No. 333-14539
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
---------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
ON FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
SKYMALL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Nevada 5961 86-0651100
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
1520 East Pima Street
Phoenix, Arizona 85034
(602) 254-9777
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
---------------------
ROBERT M. WORSLEY
President
SkyMall, Inc.
1520 East Pima Street
Phoenix, Arizona 85034
(602) 254-9777
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
Christopher D. Johnson, Esq. Christine A. Aguilera, Esq.
Squire, Sanders & Dempsey L.L.P. Vice President of Business Development
40 North Central Avenue General Counsel and Secretary
Phoenix, Arizona 85004 SkyMall, Inc.
(602) 528-4000 1520 East Pima Street
Phoenix, Arizona 85034
602-254-9777
Approximate date of proposed sale to public:
As soon as practicable after the effective date of this Registration Statement.
- ---------------------
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, 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, 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 the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
================================================================================
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 SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED MARCH 25, 1998
PROSPECTUS
744,000 Shares
SKYMALL, INC.
Common Stock
This Prospectus relates to the sale (the "Offering") of 744,000 shares of
common stock, $.001 par value per share (the "Common Stock"), of SkyMall, Inc.,
a Nevada corporation ("SkyMall" or the "Company"), which are held by certain
shareholders of the Company (the "Selling Securityholders"). The Company issued
564,000 shares of the Common Stock to the Selling Securityholders upon
conversion of a series of 6% Dividend Paying Convertible Redeemable Preferred
Stock (the "Convertible Preferred Stock") issued by the Company on October 11,
1996 and converted upon effectiveness of the Company's initial underwritten
public offering on December 11, 1996. The remaining 180,000 shares of Common
Stock are issuable upon the exercise of certain warrants (the "Warrants") issued
by the Company to the Selling Securityholders in October 1996. The Common Stock
offered by this Prospectus may be sold from time to time by the Selling
Securityholders, provided a current registration statement with respect to such
securities is then in effect. See "Plan of Distribution" and "Selling
Securityholders."
The distribution of the shares of Common Stock offered hereby by the
Selling Securityholders may be effected in one or more transactions that may
take place on one or more exchanges, in the over-the- counter market, including
ordinary broker's transactions, privately-negotiated transactions or through
sales to one or more dealers for resale of such securities as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Securityholders.
The Selling Securityholders and intermediaries through whom such securities
are sold may be deemed "underwriters" within the meaning of the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the securities
offered, and any profits realized or commissions received may be deemed
underwriting compensation.
None of the proceeds from the sale of the shares of Common Stock offered
hereby will be received by the Company; however, the Company will receive
proceeds from the exercise, if any, of the Warrants. Substantially all of the
expenses in connection with the registration of the Common Stock will be borne
by the Company, except for any underwriter's, brokers' and dealers' commissions
and/or discounts. See "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the symbol
"SKYM." On March 19, 1998 the last reported bid price for the Common Stock as
reported on the Nasdaq -National Market was $4.5625.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 HEREOF.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
----------------------
The date of this Prospectus is March 25, 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; and at the regional offices of the
Commission located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such materials can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. In addition, the Commission maintains a Web site that
contains reports, proxy statements and other information regarding registrants,
including the Company, that file electronically with the Commission at
http://www.sec.gov.
The Company has filed with the Commission a registration statement
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended ("Securities Act"),
with respect to the securities offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement and the exhibits thereto, copies of which may be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, upon payment of the fees prescribed by the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete and in each instance reference is made to
the copy of such contract or other document filed as an exhibit to the
Registration Statement for a full statement of the provisions thereof; each such
statement contained herein is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission by the Company
and are hereby incorporated by reference into this Prospectus: (i) the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996; (ii) the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1997; (iii) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1997; (iv) the Company's Quarterly Report on Form 10-Q/A for the
fiscal quarter ended September 30, 1997; (v) the Company's Information Statement
dated April 11, 1997 filed pursuant to Section 14 of the Exchange Act; and (vi)
the description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission pursuant to Section
12(g) of the Exchange Act, dated October 30, 1996. All other documents and
reports filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
from the date of this Prospectus and prior to the termination of the offering
made hereby shall be deemed to be incorporated by reference herein and shall be
deemed to be a part hereof from the date of the filing of such reports and
documents.
2
<PAGE>
Any statement contained in a document incorporated or deemed incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document that is also deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a Prospectus is delivered upon written or oral request of such person, a
copy of any document incorporated herein by reference, (not including exhibits
to the document that have been incorporated herein by reference unless such
exhibits are specifically incorporated by reference in the document which this
Prospectus incorporates). Requests should be directed to General Counsel,
SkyMall, Inc., 1520 East Pima Street, Phoenix, Arizona 85034, telephone (602)
254-9777.
3
<PAGE>
PROSPECTUS SUMMARY
The following is a summary of certain information incorporated by reference
into this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information and financial statements, including
the notes thereto, incorporated by reference into this Prospectus. Investors
should carefully consider the information set forth under the heading "Risk
Factors."
The Company
SkyMall, Inc. ("SkyMall" or the "Company"), the largest in-flight catalog
company in the United States, makes high-quality products and services available
to more than 400 million airline passengers per year. The Company markets and
sells a broad selection of premium merchandise provided by participating
merchants, including major catalog companies and specialty retailers, such as
Brookstone(R), Frontgate(R), Hammacher Schlemmer, Norm Thompson(R)/Solutions(R),
The Sharper Image(R) and the Wine Enthusiast(TM). The merchandise of each
participating merchant is presented in a separate section of the SkyMall catalog
to allow browsing from "store to store," providing the convenience and variety
of an upscale shopping mall environment. Substantially all of the merchandise
sold by the Company is shipped directly to customers by participating merchants,
thus avoiding significant inventory risk. The Company has exclusive agreements
to place its catalogs in aircraft seat pockets on 16 airlines, which carried
approximately 70 percent of all domestic passengers in 1997, including America
West, Continental, Delta, Southwest, TWA, United and US Airways. As a result,
the Company believes the SkyMall catalog is available to over approximately 1.1
million domestic airline passengers each day. The Company has experienced
substantial growth since it restructured operations in 1994. Total revenues have
increased from approximately $30.3 million in 1994 to approximately $60.8
million in 1997, for a compound annual growth rate of 26 percent. The Company's
revenue per passenger enplanement on flights carrying the SkyMall catalog
increased from approximately $0.06 in 1994 to approximately $0.11 in 1997, for a
compound annual growth rate of 22 percent.
The Company's foundation is built on its relationships with its customers,
airline, and merchant partners. The Company's customers enjoy the convenience of
being able to shop for a wide variety of innovative products while traveling.
The Company offers a no mark-up, fair price guarantee under which the Company
will refund the price difference if the customer finds the same item advertised
elsewhere at a lower price. In order to enhance the ongoing appeal of its
product offerings, the Company produces four new catalogs per year. The Company
maintains a toll free 24-hour telephone ordering service (from air and ground
phones), and an in-house staff of customer service representatives who are
trained to provide exemplary service in order to build strong customer loyalty
and increase revenue from repeat and referral business.
4
<PAGE>
In exchange for placement of its catalogs in aircraft seat pockets, the
Company pays each airline partner a monthly commission based on net merchandise
revenues generated by the Company from sales to that airline's passengers. Some
of the Company's airline agreements also require payment of minimum monthly
fees. The Company's airline partners benefit from additional revenue and from
being able to enhance the in-flight experience of their passengers by providing
the Company's catalog as an additional amenity.
Participating merchants obtain exposure for their products and services to
a demographically diverse group of potential customers with strong economic
profiles, generate additional revenues and acquire new customers to add to their
own proprietary mailing lists. Under contracts with participating merchants, the
Company earns percentages of revenues generated by the Company's sales,
placement fees for inclusion of the merchants' products in the SkyMall catalog,
or a combination thereof. The SkyMall catalog typically features over 60
participating merchants.
The Company's principal executive offices are located at and its mailing
address is 1520 East Pima Street, Phoenix, Arizona 85034. The telephone number
of the Company is (602) 254-9777.
5
<PAGE>
THE OFFERING
Securities Offered Hereby............. 744,000 shares of Common Stock.
Common Stock Outstanding as of
March 25, 1998...................... 8,489,600 shares. (1)
Use of Proceeds....................... None of the proceeds of this Offering
will be received by the Company; however,
the Company will receive proceeds from
the exercise, if any, of the Warrants.
See "Use of Proceeds."
Risk Factors.......................... The securities offered hereby involve a
high degree of risk. See "Risk Factors."
Nasdaq National Market Symbol......... "SKYM"
- ---------------------
(1) Does not include (i) 639,848 shares of Common Stock issuable upon exercise
of outstanding stock options issued pursuant to the Company's stock option
plans (ii) an additional 110,152 shares of Common Stock reserved for
issuance pursuant to future awards granted under such stock option plans,
(iii) 200,000 shares of Common Stock issuable by the Company upon the
exercise of a warrant granted to the underwriter in connection with its
initial public offering of Common Stock in December, 1996 which is
exercisable at $9.60 per share. (iv) 100,000 shares of Common Stock
issuable by the Company upon the exercise of a warrant issued to outside
consultants, which is exercisable at $8.00 per share, (v) 58,824 shares of
Common Stock issuable by the Company upon the exercise of a warrant issued
to a vendor, which is exercisable at $8.00 per share, and (vi) 180,000
shares of Common Stock issuable by the Company upon the exercise of
warrants issued to preferred shareholders in connection with the Company's
1996 Private Placement, which are exercisable at $8.00 per share.
6
<PAGE>
RISK FACTORS
An investment in the securities offered hereby involves a high degree of
risk. Prospective investors, prior to making an investment in the securities,
should carefully consider the following risk factors, among others, relating to
the Company and this Offering.
LIMITED HISTORY OF PROFITABLE OPERATIONS; NO ASSURANCE OF CONTINUED
PROFITABILITY
The Company commenced operations in late 1990, however, prior to fiscal
1995 the Company incurred substantial losses. There can be no assurance that the
Company's operations will remain profitable.
NO ASSURANCE OF CONTINUED GROWTH
Since its inception, SkyMall has rapidly expanded its operations, growing
from total revenues of $0.02 million in 1990 to total revenues of $60.8 million
in 1997. The Company's continued growth will depend to a significant degree on
its ability to increase revenue per passenger, broaden its customer base by
entering into relationships with new domestic and foreign airlines, and
implement other programs that increase the circulation of the SkyMall catalog.
The Company's ability to implement its growth strategy will also depend on a
number of other factors, many of which are or may be beyond the Company's
control, including (i) the ability of the Company to select products for its
catalog that appeal to its customer base, (ii) sustained or increased levels of
airline travel, particularly in domestic airline markets, (iii) the continued
perception by participating merchants that the Company offers an effective
marketing channel for their products and services, (iv) the Company's ability to
attract, train and retain qualified employees and management, and (v) the
continued profitability of existing operations. There can be no assurance that
the Company will be able to successfully implement its growth strategy or that
its planned expansion will be profitable.
DEPENDENCE ON AIRLINE RELATIONSHIPS
The Company's business depends significantly on its relationships with
airlines and its ability to have its catalogs placed on a substantial portion of
domestic airline flights. The Company's agreements with its airline partners
typically have one-year terms, but generally permit the airline to terminate the
relationship on 60 to 180 days' advance notice. There can be no assurance that
the Company's airline partners will continue their relationships with the
Company and the loss of one or more of the Company's significant airline
partners could have a material adverse affect on the Company's financial
condition and results of operations.
INCREASES IN PAPER COSTS AND AIRLINE FUEL PRICES
The cost of paper used to print the Company's catalogs and the fees paid to
airlines to reimburse them for the increased fuel costs associated with carrying
the Company's catalogs are significant expenses of the Company's operations.
Historically, paper and airline fuel prices have fluctuated significantly from
time to time. Prices in the paper market remain volatile and the Company
anticipates that its paper costs will increase in 1998 in comparison to 1997.
Any significant increases in paper or airline fuel costs reimbursable by the
Company could have a material adverse effect on the Company's financial
condition and results of operations.
7
<PAGE>
CREDIT RISK
Some participating merchants agree to pay a placement fee to the Company
for inclusion of their merchandise in the SkyMall catalog. The Company records
an account receivable from the merchant for the placement fee ratably for each
month of the catalog issue. In some cases, the Company collects the placement
fee either from the merchant or by withholding it from amounts due to the
merchant for merchandise sold. To the extent that the placement fee receivable
exceeds the sales of the merchant's products and the merchant is unable or
unwilling to pay the difference to the Company, the Company may experience
credit losses which could have a material adverse effect on the Company's
financial condition and results of operations.
COMPETITION
From time to time, competitors, typically other catalog retailers, have
attempted to secure contracts with airlines to offer merchandise to their
passengers. In 1997, Northwest Airlines began offering a merchandise catalog to
its customers through a competitor of the Company. Various international
airlines also offer merchandise catalogs to their passengers through competitors
of the Company. The Company also faces competition for customers from
airport-based retailers, duty-free retailers, specialty stores, department
stores and specialty and general merchandise catalogs, many of which have
greater financial and marketing resources than the Company. In addition, the
Company competes for customers with other in-flight marketing media, such as
airline-sponsored in-flight magazines and airline video programming. All of the
products and services offered by the Company can also be found in other retail
stores and catalogs.
RELIANCE ON INFORMATION AND TELECOMMUNICATIONS SYSTEMS
The Company processes a large volume of relatively small orders.
Consequently, the Company's success depends to a significant degree on the
effective operation of its information and telecommunications systems. Any
extended failure of the Company's information and telecommunications systems
could have a material adverse effect on the Company's financial condition and
results of operations.
YEAR 2000 COMPLIANCE
Many software programs use only two digits to identify the year in the date
field. If such programs are not corrected, date data concerning the Year 2000
could cause many computer applications to fail, lock-up or generate erroneous
results. The Company has committed personnel and resources to resolve potential
Year 2000 issues, and is in the process of identifying and assessing its
mission-critical systems related to the Year 2000. Although the Company plans to
address Year 2000 issues with respect to its mission-critical internal systems
in sufficient time prior to the century rollover, there can be no assurance that
there will not be interruption of operations or other limitations of system
functionality, or that the Company will not incur substantial costs to avoid
such occurrences. There can also be no assurance that there will not be
interruption of operations as a result of potential limitations of systems of
the parties with whom the Company has relationships for product fulfillment and
distribution. The Company is currently assessing the cost to remediate its Year
2000 issues. Although the actual cost to remediate these issues is not yet fully
8
<PAGE>
known, based upon information to date, it is not expected that the remediation
will have a material impact on the Company's financial condition or operating
results.
SEASONALITY
The Company's business is seasonal in nature, with its sales peak typically
occurring during the holiday selling season of the fourth quarter. During 1997,
approximately 40 percent of the Company's net merchandise sales were generated
in the fourth quarter. Any substantial decrease in sales for the fourth quarter
could have a material adverse effect on the Company's results of operations.
PRODUCT LIABILITY
The Company's catalog typically features over 1,250 products and services
from more than 60 participating merchants. Generally, the Company's agreements
with its participating merchants require the merchants to indemnify the Company
for any losses arising from product liability claims made by customers,
including the costs of defending any such claims, and to carry product liability
insurance that names SkyMall as an additional insured. In addition, the Company
maintains product liability insurance in the aggregate amount of $2.0 million
and $1.0 million per occurrence. To the extent that a merchant was unable or
unwilling to indemnify the Company as required, and any such losses exceeded the
Company's insurance coverage or were not covered by the Company's insurer, the
Company's financial condition and results of operations could be materially
adversely affected.
RELIANCE ON KEY PERSONNEL
The Company is dependent on the services of Robert M. Worsley, its
chairman, president and chief executive officer, and on the services of certain
other executive officers. The loss of Mr. Worsley's services or of the services
of certain other executive officers could have a material adverse effect on the
Company.
CONTROL BY SHAREHOLDER
As of March 12, 1998, Mr. Worsley and his wife (the "Worsleys") own and
have options to purchase approximately 63.2% of the Company's outstanding Common
Stock. Accordingly, the Worsleys have the ability to significantly influence the
affairs of the Company and matters requiring a shareholder vote, including the
election of the Company's directors, the amendment of the Company's charter
documents, the merger or dissolution of the Company, and the sale of all or
substantially all of the Company's assets. The voting power of the Worsleys may
also discourage or prevent any proposed takeover of the Company pursuant to a
tender offer.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act, including
statements regarding, among other items, the Company's growth strategy and
anticipated trends in the Company's business. These forward-looking statements
are based largely on the Company's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond the Company's control.
9
<PAGE>
Actual results could differ materially from these forward-looking statements as
a result of the factors described herein, including, among others, regulatory or
economic influences. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this Prospectus will
in fact transpire or prove to be accurate. The Company undertakes no obligation
to publicly update or revise any of the forward- looking statements contained
herein.
10
<PAGE>
SELLING SECURITYHOLDERS
The following table provides certain information with respect to the Common
Stock beneficially owned by each Selling Securityholder, including shares
issuable upon exercise of the Warrants, as of March 12, 1998. Except as
indicated in the footnotes to this table, none of such Selling Securityholders
has a material relationship with the Company. Except as indicated in the
footnotes to this table, the Company believes that the persons named in the
following table have sole voting and investment power with respect to the
respective shares of Common Stock set forth opposite their names. The shares of
Common Stock offered by this Prospectus may be offered from time to time by the
Selling Securityholders named below or their nominees.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to the Number Owned After the
Offering of Shares Offering
------------------- Offered -------------------
---------
Name Number Percent Number Percent(1)
- ---- --------- ------- --------- ----------
<S> <C> <C> <C> <C> <C>
Robert M. and Christi Worsley (2)........ 5,368,334 63.2% 3,720 5,364,614 63.2%
David A. Wirthlin (3).................... 68,562 * 3,720 64,962 *
Martin F. Smith (4)...................... 64,055 * 4,960 64,055 *
Thomas J. Litle (5)...................... 29,000 * 24,800 8,000 *
Lyle R. Knight (6)....................... 32,800 * 24,800 8,000 *
Andrea Fox (7)........................... 1,240 * 1,240 0 0
David Anfang, M.D........................ 6,200 * 6,200 0 0
American High Growth Equities
Retirement Trust....................... 55,800 * 55,800 0 0
Gary Bielfeldt........................... 24,800 * 24,800 0 0
Richard R. Blue.......................... 12,400 * 12,400 0 0
James A. Buck and Martha Buck, Trustees
of the James and Martha Buck Family
Trust.................................. 6,200 * 6,200 0 0
Christine Cheney......................... 1,240 * 1,240 0 0
Continental Stock Transfer & Trust
Company (8)............................ 6,200 * 6,200 0 0
Ditta Limited Partnership................ 49,600 * 49,600 0 0
Mark Folk................................ 6,200 * 6,200 0 0
Donald L. and Elizabeth Fones............ 12,400 * 12,400 0 0
Brian Gell............................... 6,200 * 6,200 0 0
Alan E. Grotenstein...................... 6,200 * 6,200 0 0
Keith Gulledge........................... 6,200 * 6,200 0 0
James and Teresa Hara.................... 18,600 * 18,600 0 0
Hi-Tel Group, Inc........................ 6,200 * 6,200 0 0
Holistica International, Ltd............. 6,200 * 6,200 0 0
Mohammed & Hasina Hossain................ 6,200 * 6,200 0 0
Inveski Ltd.............................. 55,800 * 55,800 0 0
Varugheshe & Leela Jacob................. 6,200 * 6,200 0 0
Neal T. Jansen........................... 12,400 * 12,400 0 0
Raj G. Kansal............................ 6,200 * 6,200 0 0
Michael R. Klein......................... 12,400 * 12,400 0 0
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to the Number Owned After the
Offering of Shares Offering
------------------- Offered -------------------
---------
Name Number Percent Number Percent(1)
- ---- --------- ------- --------- ----------
<S> <C> <C> <C> <C> <C>
O. James & Karen Klein (9)............... 66,935 * 12,400 54,135 *
Manohar & Gopaldas Mahtani............... 6,200 * 6,200 0 0
Michael & Shoshana Margolin.............. 6,200 * 6,200 0 0
Kenneth Mastrilli........................ 12,400 * 12,400 0 0
Sandy & Manuel Mayerson.................. 6,200 * 6,200 0 0
Michael A. McKee......................... 12,400 * 12,400 0 0
Richard G. Morris........................ 6,200 * 6,200 0 0
Melvin L. & Betty H. Mouton Family
Living Trust........................... 6,200 * 6,200 0 0
Omotsu Holdings Ltd...................... 21,080 * 21,080 0 0
Richard H. & Mary O'Riley Trust.......... 12,400 * 12,400 0 0
Charumati Patel.......................... 6,200 * 6,200 0 0
Kala C. & Chandu V. Patel................ 6,200 * 6,200 0 0
Natu & Daksha Patel...................... 6,200 * 6,200 0 0
Rajni R. & Shobhana R. Patel............. 12,400 * 12,400 0 0
Summant L. & Laxmi Patel................. 12,400 * 12,400 0 0
James Lee Perkins........................ 18,600 * 18,600 0 0
Esther Purjes............................ 24,800 * 24,800 0 0
Dr. Sanjeeva Rao......................... 6,200 * 6,200 0 0
Sandeep Diamond Corp..................... 12,400 * 12,400 0 0
James Scibelli........................... 55,800 * 55,800 0 0
Norman Shapiro........................... 12,400 * 12,400 0 0
Fredda Sheib............................. 12,400 * 12,400 0 0
Six L. Properties L.P.................... 12,400 * 12,400 0 0
David Soucek & Joseph Soucek............. 12,400 * 12,400 0 0
Frank Stella............................. 12,400 * 12,400 0 0
Leonard Vitullo.......................... 6,200 * 6,200 0 0
John Worsley............................. 1,240 * 1,240 0 0
Jay S. Youngerman........................ 12,400 * 12,400 0 0
Muhammed S. Yousuf....................... 6,200 * 6,200 0 0
</TABLE>
- --------------
* Less than 1%.
(1) Percentages are based upon 8,489,600 shares of the Company's Common Stock
outstanding as of March 12, 1998.
(2) Mr. Worsley is the President and Chief Executive Officer of the Company and
is a member of the Company's Board of Directors.
(3) Mr. Wirthlin was the Chief Financial Officer and Secretary of the Company
until August 1997.
(4) Mr. Smith is a Vice President of the Company.
(5) Mr. Litle is a member of the Company's Board of Directors.
(6) Mr. Knight is a member of the Company's Board of Directors.
(7) Ms. Fox was a Vice President of the Company until February 1997.
(8) Continental Stock Transfer & Trust Company is the Company's stock transfer
agent and registrar.
(9) Mr. Klein is a former employee and consultant of the Company.
12
<PAGE>
USE OF PROCEEDS
None of the proceeds of the sale of the shares of Common Stock offered
hereby will be received by the Company; however, the Company will receive
proceeds from the exercise, if any, of the Warrants. Assuming that all of the
Warrants are exercised, the net proceeds to the Company are estimated to be
approximately $1,440,000. The proceeds received upon exercise of the Warrants
will be allocated to the Company's working capital for its operations.
DETERMINATION OF OFFERING PRICE
An aggregate of 180,000 of the 744,000 shares of Common Stock offered
hereby are issuable upon the exercise of the Warrants. The terms of the Warrants
provide that the per share exercise price shall be $8.00 per share. The
subsequent sale of the Common Stock received upon the exercise of the Warrants
and the sale of the remaining 564,000 shares of Common Stock currently
outstanding will be determined by the respective holders of such Common Stock
and may be based on market prices prevailing at the time of sale, at prices
relating to such prevailing market prices, or at negotiated prices.
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from the sale of any of
the shares of Common Stock offered hereby (the "Offered Securities") by the
Selling Securityholders; however, the Company will receive proceeds from the
exercise, if any, of the Warrants. The Offered Securities may be sold from time
to time by the Selling Securityholders, or by pledgees, donees, transferees or
other successors in interest. Such sales may be made on one or more exchanges or
in the over-the-counter market or otherwise, at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Offered Securities may be sold in one or more of
the following types of transactions: (a) a block trade in which the
broker-dealer so engaged will attempt to sell the Offered Securities as agent
but may position and resell a portion of the block as principal to facilitate
the transaction; (b) purchases by a broker-dealer as principal and resale by
such broker-dealer for its account pursuant to this Prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; and (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
In effecting sales, broker-dealers engaged by the Selling Securityholders may
arrange for other broker-dealers to participate in the resales.
In connection with distributions of the Offered Securities or otherwise,
the Selling Securityholders may enter into hedging transactions with
broker-dealers. In connection with such transactions, broker-dealers may engage
in short sales of the Offered Securities in the course of hedging the positions
they assume with Selling Securityholders. The Selling Securityholders may also
sell Offered Securities short and redeliver the Offered Securities to close out
such short positions. The Selling Securityholders may also enter into option or
other transactions with broker-dealers which require the delivery to the
broker-dealer of the Offered Securities, which the broker-dealer may resell or
otherwise transfer pursuant to this Prospectus. The Selling Securityholders may
also loan or pledge Offered Securities to a broker-dealer and the broker-dealer
may sell the Offered Securities so loaned or, upon a default, the broker-dealer
may effect sales of the pledged Offered Securities pursuant to this Prospectus.
13
<PAGE>
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Securityholders in amounts to
be negotiated in connection with the sale. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any securities covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
All costs, expenses and fees in connection with the registration of the
Offered Securities will be borne by the Company. Commissions and discounts, if
any, attributable to the sales of the Offered Securities will be borne by the
Selling Securityholders. The Selling Securityholders may agree to indemnify any
broker-dealer or agent that participates in transactions involving sales of the
Offered Securities against certain liabilities, including liabilities arising
under the Securities Act.
In order to comply with the securities laws of certain states, if
applicable, the securities will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
securities may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with by the Company and
the Selling Securityholders.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Offered Securities may not simultaneously
engage in market-making activities with respect to the Company's Common Stock
for a period of up to five business days prior to the commencement of such
distribution. In addition, and without limiting the foregoing, each Selling
Securityholder will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation, Regulation M
and Rule 10b-7, which provisions may limit the timing of the purchases and sales
of the Company's securities by the Selling Securityholders.
DESCRIPTION OF SECURITIES
For a description of the Company's Common Stock, see the Company's
Registration Statement on Form 8-A dated October 30, 1996, filed with the
Commission and incorporated by reference into this Prospectus.
LEGAL MATTERS
Certain legal matters have been passed upon for the Company by Squire,
Sanders & Dempsey L.L.P., Phoenix, Arizona.
EXPERTS
The audited financial statements of the Company as of and for each of the
three years in the period ended December 31, 1996, incorporated by reference in
this Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
14
<PAGE>
<TABLE>
<S> <C>
============================================= =============================================
No dealer, salesperson or other person has
been authorized to give any information or
to make any representation other than those
contained in this Prospectus and, if given or
made, such information or representation
must not be relied upon as having been
authorized by the Company or any Underwriter.
This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy
any of the securities offered hereby by
anyone in any jurisdiction in which such SKYMALL, INC.
offer or solicitation is not authorized or in
which the person making such offer or
solicitation is not qualified to do so or to
any person to whom it is unlawful to make
such offer or solicitation in such
jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder
shall, under any circumstances, create any
implication that the information herein is 744,000 Shares
correct as of any time subsequent to the Common Stock
date hereof or that there has been no change
in the affairs of the Company since such date.
-----------------
TABLE OF CONTENTS
----------
Page PROSPECTUS
---- ----------
Available Information.................. 2
Incorporation of Certain Documents
By Reference......................... 2
Prospectus Summary..................... 4
The Offering........................... 6
Risk Factors........................... 7
Selling Securityholders................11
Use of Proceeds........................13
Determination of Offering Price........13
Plan of Distribution...................13
Description of Securities..............14
Legal Matters..........................14 March 25, 1998
Experts................................14
============================================= =============================================
</TABLE>
<PAGE>
PART II TO FORM S-3
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses of the
Company in connection with the offering other than commissions and discounts, of
any.
SEC Registration Fee................................................ $ 2,169 *
NASD Filing Fee..................................................... 837 *
Nasdaq Listing Fee.................................................. 9,509 *
Legal Fees and Expenses............................................. 2,000
Accounting Fees and Expenses........................................ 2,000
Printing and Engraving Expenses..................................... 1,000
Blue Sky Fees and Expenses.......................................... 19,520 *
Miscellaneous....................................................... 2,000
---------
Total.......................................................... $ 39,035
=========
*Previously incurred and paid.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Articles 11 and 12 of the Company's Articles of Incorporation provide as
follows:
1. To the fullest extent permitted by the laws of the State of Nevada, as
the same exist or may hereinafter be amended, no director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
for monetary damages for breach of fiduciary duty as a director or officer,
provided, however, that nothing contained herein shall eliminate or limit the
liability of a director or officer of the Corporation to the extent provided by
applicable laws (i) for acts or omissions which involve intentional misconduct,
fraud or knowing violation of law or (ii) for authorizing the payment of
dividends in violation of Nevada Revised Statutes Section 78.300. The limitation
of liability provided herein shall continue after a director or officer has
ceased to occupy such position as to acts or omissions occurring during such
director's or officer's term or terms of office. No repeal, amendment or
modification of this Article, whether direct or indirect, shall eliminate or
reduce its effect with respect to any act or omission of a director or officer
of the Corporation occurring prior to such repeal, amendment or modification.
2. The Corporation shall indemnify, defend and hold harmless any person
who incurs expenses, claims, damages or liability by reason of the fact that he
or she is, or was, an officer, director, employee or agent of the Corporation,
to the fullest extent allowed pursuant to Nevada law.
II-1
<PAGE>
ITEM 16. EXHIBITS
Exhibit Page Number or
Number Description Method of Filing
- ------- ----------- ----------------
4 Form of Common Stock Certificate.................. *
5 Opinion re: legality of the securities
being registered................................ *
23.1 Consent of Accountants............................ **
23.2 Consent of Counsel................................ See Exhibit 5
24 Powers of Attorney................................ See Signature Page
- ---------------
* Previously filed as an Exhibit to the Company's Registration Statement on
Form S-1 (File No. 333-14539).
** Filed herewith.
ITEM 17. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes to file, during any
period in which offers or sales 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; provided, however, that paragraphs (a) and (b)
shall not apply if such information is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
and Exchange Act that is incorporated by reference into this Registration
Statement.
(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.
2. The undersigned Registrant hereby undertakes 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 that time shall be deemed to be the initial bona fide offering thereof.
3. The undersigned Registrant hereby undertakes 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.
II-2
<PAGE>
4. 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 into this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
5. 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 are 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.
6. 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 the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Phoenix, State of Arizona, on March 25,
1998.
SKYMALL, INC.
a Nevada Corporation
By: /s/Robert M. Worsley
------------------------------------
Robert M. Worsley
Chairman of the Board, President and
Chief Executive Officer
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, constitute and
appoint ROBERT M. WORSLEY and ALLEN R. WESTERGARD, and each of them, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities to sign any and all pre- and post-effective amendments (including any
amendments pursuant to Rule 462(b) to this Form S-3 Registration Statement, and
to file the same with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting such
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 and to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agents, or each of them, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/Robert M. Worsley Chairman of the Board, March 25, 1998
- -------------------------- President and Chief Executive
Robert M. Worsley Officer (Principal Executive
Officer)
/s/Allen R. Westergard Vice President of Finance, Chief March 25, 1998
- -------------------------- Financial Officer and Treasurer
Allen R. Westergard (Principal Financial and
Accounting Officer)
/s/Alan C. Ashton Director March 25, 1998
- --------------------------
Alan C. Ashton
/s/Lyle R. Knight Director March 25, 1998
- --------------------------
Lyle R. Knight
/s/Thomas J. Litle Director March 25, 1998
- --------------------------
Thomas J. Litle
/s/Randy Petersen Director March 25, 1998
- --------------------------
Randy Petersen
S-1
<PAGE>
<PAGE>
EXHIBIT 23.1
(LETTERHEAD OF ARTHUR ANDERSEN LLP)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 17, 1997
included in SkyMall, Inc.'s Form 10-K for the year ended December 31, 1996 and
to all references to our Firm included in this registration statement.
Arthur Andersen LLP
Phoenix, Arizona,
March 20, 1998.
