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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1999.
REGISTRATION NO. 333-91685
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
ADAM.COM, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
GEORGIA
(State or other jurisdiction of 58-1878070
incorporation or organization) (I.R.S. Employer Identification Number)
</TABLE>
------------------------------
1600 RIVEREDGE PARKWAY, SUITE 800
ATLANTA, GEORGIA 30328
TELEPHONE: (770) 980-0888
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
ROBERT S. CRAMER, JR.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ADAM.COM, INC.
1600 RIVEREDGE PARKWAY, SUITE 800
ATLANTA, GEORGIA 30328
TELEPHONE: (770) 980-0888
FACSIMILE: (770) 989-4970
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
WILLIAM G. ROCHE, ESQ.
STACEY K. GEER, ESQ.
KING & SPALDING
191 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30303
TELEPHONE: (404) 572-4600
FACSIMILE: (404) 572-5100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement and from
time to time thereafter.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / __________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 528,000 shares(2) $14.16 $7,476,480 $2,079(3)
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c).
(2) Based on (a) 450,000 shares into which we currently estimate a $6,000,000
convertible debenture will be converted, and (b) 78,000 shares which we
currently estimate we will issue as a commitment fee.
(3) Previously paid.
------------------------------
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, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to such Section 8(a), may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 30, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
UP TO 528,000 SHARES
ADAM.COM, INC.
COMMON STOCK
This prospectus relates to the sale of up to 528,000 shares of our common
stock which we may issue to Fusion Capital Fund I, LLC. Fusion Capital is
referred to in this prospectus as the selling shareholder. These shares consist
of the following:
- 450,000 shares into which we currently estimate a $6,000,000 convertible
debenture to be issued to Fusion Capital will be converted
- 78,000 shares which we currently estimate we will issue to Fusion Capital
as a commitment fee
If the debenture is actually convertible into greater than 450,000 shares, we
currently intend to redeem the debenture at 106% of its outstanding principal
balance. We will not receive any of the proceeds from the sale of the shares
being offered by this prospectus.
The shares offered by this prospectus are being registered due to our
obligations to the selling shareholder. The selling shareholder may elect to
sell all, a portion or none of the shares described in this prospectus. We will
not receive any of the proceeds from the sale of shares of our common stock by
the selling shareholder.
Our common stock is quoted on the Nasdaq National Market under the symbol
"ADAM." On December 29, 1999, the last reported sale price for our common stock
as reported on the Nasdaq National Market was $12.875 per share. We will apply
to have the shares of common stock offered pursuant to this prospectus approved
for trading on the Nasdaq National Market.
------------------------
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 3 FOR A DISCUSSION OF THESE RISKS.
THE SELLING SHAREHOLDER AND ANY BROKER EXECUTING SELLING ORDERS ON BEHALF OF
THE SELLING SHAREHOLDER MAY BE DEEMED TO BE AN "UNDERWRITER." COMMISSIONS
RECEIVED BY ANY BROKER MAY BE DEEMED TO BE UNDERWRITING COMMISSIONS.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
adam.com.................................................... 1
Risk Factors................................................ 2
The Financing Transaction................................... 6
Use of Proceeds............................................. 8
Selling Shareholder......................................... 9
Plan of Distribution........................................ 11
Validity of Common Stock.................................... 12
Experts..................................................... 12
About This Prospectus....................................... 12
Where You Can Find More Information......................... 13
</TABLE>
ADAM.COM
adam.com, Inc. is a leading developer of health education content and
software technologies, and since January 1999, we have taken steps to become a
leading provider of health, medical and wellness information online. We have
created, published and marketed multimedia software products, content and
Internet-ready applications that provide anatomical, medical and health-related
information for the education, consumer and professional markets. During our
fiscal year ended March 31, 1999, adam.com made the strategic decision to focus
the majority of its efforts on the online dissemination of consumer health
information. This change in our strategy resulted in the May 1999 launch of
WWW.ADAM.COM, our consumer health destination. In connection with this
redirected strategy, we discontinued further sales and marketing effort, as well
as product update and upgrade support for certain of our historical products.
We are incorporated under the laws of the state of Georgia. Our principal
executive offices are located at 1600 RiverEdge Parkway, Suite 800, Atlanta,
Georgia 30328. Our telephone number at that address is (770) 980-0888.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE TO
BUY OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR
BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS WOULD LIKELY SUFFER. IN
SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE
ALL OR PART OF YOUR INVESTMENT.
CERTAIN STATEMENTS MADE IN THIS PROSPECTUS, AND OTHER WRITTEN OR ORAL
STATEMENTS MADE BY OR ON BEHALF OF ADAM.COM, MAY CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. WHEN USED IN THIS
PROSPECTUS, THE WORDS "BELIEVES," EXPECTS," "ESTIMATES," "INTENDS" AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. STATEMENTS
REGARDING FUTURE EVENTS AND DEVELOPMENTS AND OUR FUTURE PERFORMANCE, AS WELL AS
OUR EXPECTATIONS, BELIEFS, PLANS, INTENTIONS, ESTIMATES OR PROJECTIONS RELATING
TO THE FUTURE, ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THESE LAWS.
EXAMPLES OF SUCH STATEMENTS IN THIS PROSPECTUS INCLUDE DESCRIPTIONS OF OUR PLANS
AND STRATEGIES WITH RESPECT TO DEVELOPING OUR WEB SITE, OUR PLANS TO DEVELOP
ADDITIONAL STRATEGIC PARTNERSHIP, OUR INTENTION TO ADD E-COMMERCE TO OUR
BUSINESS STRATEGY, OUR CONTINUING GROWTH AND OUR ABILITY TO ADDRESS YEAR 2000
ISSUES. ALL FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED. WE BELIEVE THAT THESE FORWARD-LOOKING STATEMENTS ARE REASONABLE;
HOWEVER, YOU SHOULD NOT PLACE UNDUE RELIANCE ON SUCH STATEMENTS. THESE
STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND SPEAK ONLY AS OF THE DATE OF
SUCH STATEMENTS. WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF FUTURE EVENTS, NEW INFORMATION
OR OTHERWISE.
WE ARE A YOUNG COMPANY WITH A NEW INTERNET-BASED STRATEGY AND WE MAY
CONTINUE TO INCUR LOSSES.
We have experienced substantial losses of $2.1 million in the fiscal year
ended March 31, 1999 ("fiscal 1999"), $5.4 million in fiscal 1997, $3.9 million
in fiscal 1996, $3.2 million in fiscal 1994. We may incur future losses in
connection with implementing our new Internet-based strategy. We cannot be
certain that we can obtain profitability in any future period.
WE MAY BE UNABLE TO OBTAIN SUFFICIENT CAPITAL TO PURSUE OUR NEW
INTERNET-BASED STRATEGY.
Since inception we have funded operations with debt and equity capital. In
fiscal 1999, our total costs and expenses increased to $7.8 million from
$6.7 million during fiscal 1998. This increase was caused in large part by our
decision to focus on becoming an online provider of healthcare information. We
expect to continue to have significant cash needs as we continue to pursue and
expand our Internet-based strategy and offerings. There can be no assurance that
capital will be available to us on satisfactory terms or at all.
Under the terms of the debenture issued to the selling shareholders and
related agreements, the $6.0 million to be provided to us by the selling
shareholder to purchase the debenture will be pledged by us as security to the
selling shareholder to secure our obligations under the debenture. This
$6.0 million will initially be restricted cash of adam.com. We expect that such
cash will become unrestricted at a rate of $1.0 million per month as the
outstanding principal balance of the debenture is reduced from conversions of
the debenture into common stock. Whether and when some or all of this cash will
become unrestricted is not assured. Even if we are able to fully access all
funds available under the debenture, we may still need additional capital to
fully implement our business, operating and development plans.
WE MAY BE UNABLE TO COMPETE EFFECTIVELY WITH OTHER ONLINE PROVIDERS OF
HEALTHCARE INFORMATION.
The market for providing healthcare information online is intensely
competitive, and we expect competition to increase in the future. As a new
entrant into this market, we expect our sensitivity to competitive pressures to
be especially strong until we can firmly establish ourselves. Our current
competitors include Dr. Koop.com and Healtheon/WebMD. We may not be able to
compete effectively
2
<PAGE>
against these companies, and if we fail to compete effectively we may suffer
reduced gross margins and loss of market share.
Our competitors are generally larger and more established than we are and
therefore may have advantages over us because of their longer operating
histories, greater name recognition, or greater financial, technical and
marketing resources. As a result, they may be able to adapt more quickly to new
or emerging technologies and changes in customer requirements. They can also
devote greater resources to the promotion and sale of their products or services
than we can. Furthermore, mergers and acquisitions among our competitors, such
as the November 1999 merger of Healtheon, WebMD, MEDE America Corporation and
Medcast to form Healtheon/WebMD, could intensify our existing competition.
WE FACE RAPID TECHNOLOGICAL CHANGE IN THE ONLINE HEALTH INFORMATION
INDUSTRY.
Rapid changes in technology pose significant risks to us. As a new entrant
into the market of Internet-based health information, we will be required to
adapt quickly, and without significant prior experience, to rapid changes in
technologies related to the Internet. Any failure by us to timely develop and
disseminate new content or to update and enhance our current content in the face
of changing technologies could aversely affect our ability to maintain market
share.
WE MAY BE UNABLE TO SUCCESSFULLY ACQUIRE COMPLEMENTARY BUSINESSES.
As part of our growth strategy, we have recently acquired all of the assets
of Informational Medical Systems, Inc. and drgreen.com. We may continue to
acquire or make investments in, companies with products, technologies or
professional services that we determine to be useful in pursuing our business of
providing health-related information over the Internet. In acquiring companies
in the future, we could encounter difficulties in assimilating their personnel
and operations into our company. These difficulties could disrupt our ongoing
business, distract our management and employees, increase our expenses and
adversely affect our results of operations. Future acquisitions may also cause
us to incur expenses such as the amortization of goodwill or in-process research
and development expenses which may affect our earnings. We cannot be certain
that we will successfully overcome these risks with respect to any future
acquisitions. In addition, in the past, we have paid a portion of the
consideration for some our acquisitions by issuing common stock. The issuance of
additional common stock or other securities convertible into common stock in
connection with future acquisitions could dilute the ownership interests of our
existing shareholders.
WE NEED TO ATTRACT NEW PERSONNEL TO ASSIST US IN IMPLEMENTING OUR NEW
INTERNET-BASED STRATEGY.
In order to promote the development of our new Website, we will need to
identify, attract and retain software engineers, web designers and content
editors. We will compete with other companies both within and outside our market
for such employees. If we do not succeed in attracting these types of new
employees, we may be unable to fully implement our new Internet-based strategy.
WE ARE SUBJECT TO RISKS RELATING TO THE YEAR 2000.
Many currently installed computer systems and software products accept only
two-digit entries in the date code field. These date code fields will need to
accept four digit entries to distinguish 21st century dates from 20th century
dates. As a result, computer systems and software used by many companies and
governmental agencies may need to be upgraded to comply with such "Year 2000"
requirements. Noncompliant computer systems or software may cause system failure
or result in miscalculations that will cause disruptions of normal business
activities. Although we have designed all of the products that we currently
offer to be Year 2000 compliant, we cannot assure you that our products contain
all necessary date code changes, or that, in the year 2000, our products will be
3
<PAGE>
compatible with third-party software that may be integrated or used in
conjunction with our products. There can be no assurance that we have identified
all Year 2000 issues with respect to our products and products supplied to us by
third parties and the failure to do so could have a material adverse effect on
our business.
Furthermore, there can be no assurance that our estimates related to the
Year 2000 issue will prove to be accurate and actual results could differ
materially from those currently anticipated. Specific factors that could cause
such material differences include, but are not limited to, the ability to
identify, assess, and remediate and test all relevant computer codes and
embedded technology, and similar uncertainties. In addition, variability of
definitions of "compliance with Year 2000" and the myriad of different products
and services, and combinations thereof, sold by adam.com may lead to claims
whose impact on adam.com is not currently estimable. No assurance can be given
that the aggregate cost of defending and resolving such claims, if any, will not
materially adversely affect our results of operation. Although some of the our
agreements and contracts with third parties contain provisions requiring such
parties to indemnify us under some circumstances, there can be no assurance that
such indemnification arrangements will cover all of our liabilities and costs
related to claims by third parties related to the Year 2000 issue.
THE CONVERSION PRICE OF THE DEBENTURE IS NOT FIXED; FUTURE SALES OF OUR
COMMON STOCK COULD CAUSE OUR STOCK TO DECLINE IN PRICE.
The conversion price of the debenture issued to the selling shareholder is
equal to the lesser of:
- the closing bid price of our common stock on the date the selling
shareholder submits its election to convert the debenture into common
stock
- the average of the two lowest closing bid prices of our common stock for
the 10 consecutive trading days immediately preceding the date the selling
shareholder submits its election to convert the debenture into common
stock
- 130% of the average of the closing prices of our common stock for the 10
consecutive trading days immediately preceding the date on which the
debenture is issued. This conversion price is referred to throughout the
prospectus as the "Fixed Conversion Price". If the debenture had been
issued on December 29, 1999, the Fixed Conversion Price would have been
$17.9075.
The sale of a substantial number of shares of our common stock under this
offering, or anticipation of such sales could make it more difficult for us to
sell equity or equity related securities in the future at a time and price we
deem appropriate. If the debenture were fully converted on December 29, 1999,
the conversion price (under the first bullet point above) would be $12.875 and
the debenture would be convertible into 466,019 shares of our common stock.
Assuming the conversion of the debenture into a total of 466,019 shares of
common stock on December 29, 1999, these shares would represent 8.7% of our
outstanding common stock as of December 29, 1999. If our stock price decreases,
we would be required to issue more shares upon conversion of the debenture,
resulting in more shares being outstanding. All shares registered in this
offering are freely tradable. It is anticipated that shares registered in this
offering will be sold over a period of up to six months from the date of this
prospectus. The sale of a significant amount of shares registered in this
offering at any given time could cause the trading price of our common stock to
decline and to be highly volatile.
OUR STOCK PRICE IS EXTREMELY VOLATILE.
Our common stock has been publicly traded since our initial public offering
on November 15, 1995. Since that date, the closing price of the common stock has
ranged from a low price of $1.875 per share to a high price of $40 per share,
and there has been significant volatility in the price of our common stock in
the past year. There can be no assurance that the market price of our common
stock will be maintained or that the volume of trading in our shares will not
decrease.
4
<PAGE>
The stock prices for many high technology companies, especially those that
base their businesses on the Internet, recently have experienced wide
fluctuations and extreme volatility. This volatility has often been unrelated to
the operating performance of such companies. Such fluctuations have adversely
affected and may in the future adversely affect the market price of our common
stock.
Furthermore, following periods of volatility in the market price of a
company's securities, securities class action claims frequently are brought
against the subject company. To the extent that the market price of our shares
falls dramatically in any period of time, shareholders may bring claims, with or
without merit, against us. Such litigation would be expensive to defend and
would divert management attention and resources regardless of outcome.
MANY OF OUR SHARES ARE ELIGIBLE FOR FUTURE SALE AND ARE SUBJECT TO
REGISTRATION RIGHTS WHICH COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON
STOCK.
In connection with our prior acquisitions and financings, we have granted
rights to register approximately 303,063 shares of our common stock. These
shares are currently "restricted" under the federal securities laws and may not
be resold by their holders absent registration. Upon the effectiveness of
registration statements filed as the result of the exercise of such registration
rights, these shares will be eligible for resale into the public market. In
addition, the shares offered in this prospectus will be eligible for resale upon
the conversion of the debentures as described in this prospectus. The market
price of our stock could decline significantly if the holders of these shares
sell them or are perceived by the market as intending to sell them.
OUR PRINCIPAL SHAREHOLDERS HAVE SUBSTANTIAL INFLUENCE.
As of September 30, 1999, our executive officers, directors and persons who
beneficially more than 10% of our outstanding common stock controlled
approximately 25% of the combined outstanding voting power of our common stock.
As a result, these holders exert substantial influence with respect to all
matters submitted to a vote of holders of common stock, including election of
our directors.
WE HAVE ADOPTED CERTAIN ANTI-TAKEOVER PROVISIONS THAT MAY DETER A TAKEOVER.
Our articles of incorporation and bylaws contain the following provisions
that may deter a takeover, including a takeover on terms that many of our
shareholders might consider favorable, such as:
- the authority of our board of directors to issue common stock and
preferred stock and to determine the price, rights (including voting
rights), preferences, privileges and restrictions of each series of
preferred stock, without any vote or action by our shareholders;
- the existence of large amounts of authorized but unissued common stock and
preferred stock;
- staggered, three-year terms for our board of directors; and
- advance notice requirements for board of directors nominations and for
shareholder proposals.
The rights and preferences of any series of preferred stock could include a
preference over the common stock on the distribution of our assets upon a
liquidation or sale of our company, preferential dividends, redemption rights,
the right to elect one or more directors and other voting rights. The rights of
the holders of any series of preferred stock that may be issued in the future
may adversely affect the rights of the holders of the common stock. We have no
current plans to issue preferred stock. In addition, provisions of Georgia law
and our stock option plan may also discourage, delay or prevent a change in
control of our company or unsolicited acquisition proposals.
5
<PAGE>
THE FINANCING TRANSACTION
GENERAL
On November 15, 1999 adam.com executed a securities purchase agreement with
Fusion Capital Fund I, LLC ("Fusion Capital") pursuant to which it agreed to
issue to Fusion Capital up to two 0% senior secured convertible debentures, each
with an aggregate principal amount of $6,000,000. The purchase price for each
debenture is $6,000,000. The debentures will not bear any interest or premium
accrual. Each debenture will be convertible into shares of common stock of
adam.com at a price equal to the lesser of (1) 130% of the average of the
closing bid prices for our common stock during the 10 trading days prior to
issuance of the debenture or (2) a price based upon the future performance of
the common stock, in each case without any fixed discount to the market price.
The first debenture will be purchased by Fusion Capital within five business
days after the date of this prospectus. This date is referred to as the "closing
date." The second debenture will be issued after delivery of an irrevocable
written notice by us to Fusion Capital stating that we elect to sell such
debenture to Fusion Capital. Such notice may be given no earlier than the sooner
to occur of (1) 30 days prior to the maturity date of the first debenture or
(2) after the first debenture is no longer outstanding. Each debenture will
mature six months from its date of issuance. The obligation of Fusion Capital to
purchase the debentures are subject only to customary closing conditions, all of
which are outside the control of Fusion Capital.
Each debenture will be secured by a pledge of $6,000,000 in cash by
adam.com, which will be restricted cash of adam.com. adam.com will be the legal
and beneficial owner of the cash and will also be the legal and beneficial owner
of all interest and investment income earned with respect to the proceeds while
held as restricted cash. adam.com will direct the investment of the cash. Fusion
Capital will have a security interest on customary terms in the cash. We expect
that the amount of cash subject to Fusion Capital's security interest will be
reduced at a rate of $1,000,000 per month as the outstanding principal amount of
the debenture is reduced upon conversion into common stock. The corresponding
amount of cash will become unrestricted cash of adam.com.
CONVERSION OF THE DEBENTURE INTO COMMON STOCK
CONVERSIONS AT FUSION CAPITAL'S DISCRETION. Subject to the limits on
conversion and the redemption rights described below, each month during the term
of the first debenture Fusion Capital will have the right to convert up to
$1,000,000 of the principal amount of the debenture, plus any amounts for any
prior month that have not yet been converted, into shares of our common stock at
the applicable conversion price. The conversion price per share is equal to the
lesser of:
- the closing bid price of our common stock on the day of submission of a
conversion notice by Fusion Capital; or
- the average of the two lowest closing bid prices of our common stock
during the 10 trading days prior to the submission of a conversion notice
by Fusion Capital; or
- 130% of the average of the closing bid prices of our common stock for the
10 trading days immediately preceding the date on which the debenture is
issued. This is referred to throughout this prospectus as the "Fixed
Conversion Price". If the debenture had been issued on December 29, 1999,
the Fixed Conversion Price would have been $17.9075.
ADAM.COM'S RIGHT TO PREVENT CONVERSIONS. If the closing sale price of our
common stock is below the Fixed Conversion Price for any three consecutive
trading days, we will have the unconditional right to suspend conversions until
the earlier of (1) our revocation of such suspension and (2) when the closing
sale price of our common stock is above the Fixed Conversion Price for any three
consecutive trading days.
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ADAM.COM'S MANDATORY CONVERSION RIGHTS. We will have the right to require
that Fusion Capital convert a specified principal amount of the debenture during
any specified month. We may revoke, in our sole discretion, our written request
with respect to any conversions in excess of the amount that Fusion Capital is
otherwise permitted to convert.
LIMITATION ON FUSION CAPITAL'S BENEFICIAL OWNERSHIP. Notwithstanding the
foregoing, no conversion of the debenture will be permitted if it would result
in Fusion Capital or its affiliates beneficially owning more than 4.99% of our
then aggregate outstanding common stock immediately after the proposed
conversion.
REDEMPTION
REDEMPTION AT THE OPTION OF ADAM.COM. If the closing price of our common
stock is below the Fixed Conversion Price for any 10 consecutive trading days,
then we may redeem the unconverted remaining principal balance of the debenture
for cash at a price equal to 106% of the remaining principal balance.
REDEMPTION AT THE OPTION OF FUSION CAPITAL. Upon (1) an event of default
under the debenture or (2) the maturity of the debenture, Fusion Capital may
redeem the unconverted remaining principal balance of the debenture for cash at
a price equal to 106% of the remaining principal balance.
CHANGE IN CONTROL
Upon a change in control of adam.com, we may exercise our redemption right
or, if the market price is below the Fixed Conversion Price, we may require
mandatory conversion of the debenture.
NO SHORT-SELLING OR HEDGING BY FUSION CAPITAL
Fusion Capital has agreed that neither it nor its affiliates will engage in
any direct or indirect short-selling or hedging of our common stock during any
time any debenture is or could become outstanding.
EVENTS OF DEFAULT
Generally, the debenture will become immediately due and payable at the
option of Fusion Capital upon the occurrence of any of the following events of
default:
- a default in the payment of the principal amount of the debenture when
due;
- if for any reason the shares offered by this prospectus cannot be sold
pursuant to this prospectus for a period of three consecutive trading days
or for more than an aggregate of 10 trading days in any 365-day period;
- suspension by the Nasdaq National Market of our common stock from trading
for a period of three consecutive trading days or for more than an
aggregate of 10 trading days in any 365-day period;
- our failure to satisfy any listing criteria of our principal securities
exchange or market for a period of 10 consecutive trading days or for more
than an aggregate of 45 trading days in any 365-day period;
- (1) notice from us or our transfer agent to the effect that either of us
intends not to comply with a proper request for conversion of the
debenture or (2) our failure to confirm to the transfer agent Fusion
Capital's conversion notice or (3) the failure of the transfer agent to
issue shares of our common stock upon delivery of a conversion notice;
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- if at any time more than 964,664 shares of our common stock (representing
19.99% of our outstanding common stock as of the date of the securities
purchase agreement) are issuable to Fusion Capital upon conversion of the
debenture;
- any material breach of the representations or warranties or covenants
contained in the securities purchase agreement or any related agreements
which has or which could have a material adverse affect on adam.com or the
value of the debenture, subject to a cure period of 10 trading days;
- a default of any payment obligation of adam.com in excess of $1,000,000;
or
- our participation in insolvency or bankruptcy proceedings by or against
adam.com.
ADDITIONAL SHARES ISSUED TO FUSION CAPITAL
Under the terms of the purchase agreement, in connection with the issuance
of the first debenture, Fusion Capital will receive additional shares of our
common stock as a commitment fee. The shares to be issued to Fusion Capital wil
be equal to:
- 10% of the principal amount of the first debenture, or $600,000, divided
by the average of the closing price of our common stock for the 10
consecutive trading days immediately preceding the trading day that is two
trading days prior to the closing date for the first debenture, plus
- 3% of the principal amount of the second debenture, or $180,000, divided
by the average of the closing price of our common stock for the 10
consencutive trading days immediately preceding the trading day that is
two trading days prior to the closing date for the first debenture.
We originally estimated that we would issue no more than 78,000 shares to
Fusion Capital as the commitment fee, all of which are included in this
offering. If the closing date for the first debenture had been December 29,
1999, Fusion Capital would have received 56,089 additional shares of our common
stock. Unless an event of default occurs, these shares must be held by Fusion
Capital until the first debenture has been converted or repaid in full. On the
date of the issuance of the second debenture, Fusion Capital will be entitled to
receive a commitment fee, payable in shares of common stock, equal to 7% of the
aggregate principal amount of the second debenture.
NO VARIABLE PRICED FINANCINGS BY ADAM.COM
So long as any debenture is outstanding, adam.com has agreed not to issue,
or enter into any agreement with respect to the issuance of, any variable priced
equity or variable priced equity-like securities unless it has obtained Fusion
Capital's prior written consent.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of our
common stock by the selling shareholder. We are registering the shares for sale
to provide the selling shareholder with freely tradable securities, but the
registration of these shares does not necessarily mean that any of these shares
will be offered or sold by the selling shareholder.
8
<PAGE>
SELLING SHAREHOLDER
The selling shareholder is Fusion Capital Fund I, LLC. Prior to the date of
this prospectus, Fusion Capital did not own any shares of our common stock. Five
business days after the date of this prospectus, pursuant to the securities
purchase agreement dated November 15, 1999, Fusion Capital will purchase for
$6,000,000 a 0% senior secured convertible debenture in the aggregate principal
amount of $6,000,000.
MECHANICS OF CONVERSION OF DEBENTURE
Each month a portion of the debenture may be converted into shares of our
common stock. The conversion price of the debenture to be issued to Fusion
Capital is equal to the lesser of:
- the closing bid price of our common stock on the date of submission of a
conversion notice by Fusion Capital; or
- the average of the two lowest closing bid prices of our common stock
during the 10 trading days prior to the submission of a conversion notice
by Fusion Capital; or
- 130% of the average of the closing bid prices of our common stock for the
10 trading days immediately preceding the date on which the debenture is
issued. This is referred to throughout the prospectus as the "Fixed
Conversion Price."
The following table sets forth the number of shares of our common stock that
would be issuable to Fusion Capital upon conversion of the debenture at varying
conversion prices:
<TABLE>
<CAPTION>
NUMBER OF SHARES TO BE PERCENT OF OUR OUTSTANDING
ISSUED UPON COMMON STOCK AS OF
CONVERSION PRICE CONVERSION DECEMBER 29, 1999(1)
- ----------------------------------- ---------------------- --------------------------
<S> <C> <C>
$10................................ 600,000 10.9%
$13.775 (10-day average as of
December 29, 1999)............... 435,571 8.2
$17.9075 (130% of 10-day average as
of December 29, 1999)............ 335,055 6.4
$20................................ 300,000 5.8
$30................................ 200,000 3.9
$40................................ 150,000 3.0
</TABLE>
- ------------------------
(1) On December 29, 1999, there were 4,902,369 shares of our common stock
outstanding.
We originally estimated that we would issue no more than 450,000 shares to
Fusion Capital upon conversion of the debenture, all of which are included in
this offering. If the debenture is actually convertible into greater than
450,000 shares, we currently intend to redeem the debenture at 106% of its
outstanding principal balance.
EFFECT OF CONVERSION OF DEBENTURE ON ADAM.COM AND OUR SHAREHOLDERS
If the debenture were fully converted on the date of this prospectus, the
conversion price (under the bullet point above) would be $ per share
and, at the fixed conversion price, the debenture would be convertible into an
aggregate of shares of our common stock, representing % of our outstanding
common stock.
All shares registered in this offering are freely tradable. It is
anticipated that shares registered in this offering will be sold over a period
of up to six months from the date of this prospectus. The sale of a significant
amount of shares registered in this offering at any given time could cause the
trading price of our common stock to decline and to be highly volatile. Fusion
Capital may ultimately convert the
9
<PAGE>
entire debenture into common stock, and it may sell all of the shares of common
stock it acquires upon conversion. Therefore, the conversion of the debenture
may result in substantial dilution to the interests of other holders of our
common stock. However, we have the right to block conversions of the debenture
and to require redemption of the debenture. We currently intend to exercise
these rights to protect our shareholders from substantial dilution. See "The
Financing Transaction."
ADAM.COM'S ABILITY TO RESTRICT CONVERSION
The securities purchase agreement provides that we may restrict conversion
of the debenture if the closing sale price of our common stock is below the
Fixed Conversion Price for any three consecutive trading days. We currently
intend to so restrict conversion to the extent practicable, so that our
shareholders would be protected from substantial dilution. Investors should be
aware, however, that to the extent adam.com needs to use the cash proceeds of
the debenture for working capital or other business purposes, we will not
restrict conversion of the debenture.
ADJUSTMENT TO CONVERSION PRICE
The conversion price of the debenture will be adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction occurring during the ten trading days in which the closing
bid price is used to compute the conversion price.
ADDITIONAL SHARES TO BE ISSUED TO FUSION CAPITAL
Under the terms of the purchase agreement, in connection with the issuance
of the first debenture, Fusion Capital will receive additional shares of our
common stock as a commitment fee. The shares to be issues to Fusion Capital will
be equal to
- 10% of the principal amount of the first debenture, or $600,000 divided by
the average of the closing price of our common stock for the 10
consecutive trading days immediately preceding the trading day that is two
trading days prior to the closing date for the first debenture, plus
- 3% of the principal amount of the second debenture, or $180,000 divided by
the average of the closing price of our common stock for the 10
consecutive trading days immediately preceding the trading day that is two
trading days prior to the closing date for the first debenture
We originally estimated that we would issue no more than 78,000 shares to Fusion
Capital as the commitment fee, all of which are included in this offering. If
the closing date for the first debenture had been December 29, 1999, Fusion
Capital would have received 56,089 additional shares of our common stock. Unless
an event of default occurs, all of these shares must be held by Fusion Capital
until the first debenture has been converted or repaid in full.
RELATIONSHIP BETWEEN ADAM.COM AND FUSION CAPITAL
Fusion Capital has had no business or financial relationship with adam.com
prior to November 15, 1999. On November 15, 1999, adam.com agreed to issue to
Fusion Capital, and Fusion Capital agreed to purchase from adam.com, a 0% senior
secured convertible debenture in the aggregate principal amount of $6,000,000.
Notwithstanding the limitations on ownership set forth in the securities
purchase agreement, if the entire debenture was converted into shares of common
stock at a conversion price equal to $12.875 per share, representing an assumed
conversion price computed as if the debenture were fully converted on
December 29, 1999, Fusion Capital would beneficially own 8.7% of our outstanding
common stock as of December 29, 1999.
10
<PAGE>
HOLDINGS OF FUSION CAPITAL UPON TERMINATION OF THIS OFFERING
Because the selling shareholder may sell all, some or none of the common
stock offered by this prospectus, no estimate can be given as to the amount of
common stock that will be held by the selling shareholder upon termination of
the offering.
PLAN OF DISTRIBUTION
The common stock offered by this prospectus is being offered by the selling
shareholder, Fusion Capital Fund I, LLC. The common stock may be sold or
distributed from time to time by the selling shareholder, or by donees or
transferees of, or other successors in interests to, the selling shareholder,
directly to one or more purchasers or through brokers, dealers or underwriters
who may act solely as agents or may acquire such common stock as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices, or at fixed prices, which may be
changed. The sale of the common stock offered by this prospectus may be effected
in one or more of the following methods:
- ordinary brokers' transactions;
- transactions involving cross or block trades or otherwise on the Nasdaq
National Market;
- purchases by brokers, dealers or underwriters as principal and resale by
such purchasers for their own accounts pursuant to this prospectus;
- "at the market" to or through market makers or into an existing market for
the common stock;
- in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
- in privately negotiated transactions; or
- any combination of the foregoing.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and complied
with.
Brokers, dealers, underwriters or agents participating in the distribution
of the shares as agents may receive compensation in the form of commissions,
discounts or concessions from the selling shareholder and/or purchasers of the
common stock for whom such broker-dealers may act as agent, or to whom they may
sell as principal, or both. The compensation paid to a particular broker-dealer
may be less than or in excess of customary commissions.
THE SELLING SHAREHOLDER AND ANY BROKER-DEALERS WHO ACT IN CONNECTION WITH
THE SALE OF THE SHARES HEREUNDER MAY BE DEEMED TO BE "UNDERWRITERS" WITHIN THE
MEANING OF THE SECURITIES ACT, AND ANY COMMISSIONS THEY RECEIVE AND PROCEEDS OF
ANY SALE OF THE SHARES MAY BE DEEMED TO BE UNDERWRITING DISCOUNTS AND
COMMISSIONS UNDER THE SECURITIES ACT.
Neither adam.com nor the selling shareholder can presently estimate the
amount of compensation that any agent will receive. adam.com knows of no
existing arrangements between any selling shareholder, any other shareholder,
broker, dealer, underwriter or agent relating to the sale or distribution of the
shares. At a time particular offer of shares is made, a prospectus supplement,
if required, will be distributed that will set forth the names of any agents,
underwriters or dealers and any compensation from the selling shareholder and
any other required information.
adam.com will pay all of the expenses incident to the registration, offering
and sale of the shares to the public other than commissions or discounts of
underwriters, broker-dealers or agents. adam.com
11
<PAGE>
has also agreed to indemnify the selling shareholder and related persons against
specified liabilities, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of adam.com,
adam.com has been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is therefore,
unenforceable.
FUSION CAPITAL AND ITS AFFILIATES HAVE AGREED NOT TO ENGAGE IN ANY DIRECT OR
INDIRECT SHORT SELLING OR HEDGING OF ADAM.COM'S COMMON STOCK DURING THE TERM OF
THE DEBENTURES.
adam.com has advised the selling shareholder that while they are engaged in
a distribution of the shares included in this prospectus they are required to
comply with Regulation M promulgated under the Securities Exchange Act of 1934,
as amended. With certain exceptions, Regulation M precludes the selling
shareholder, any affiliated purchasers, and any broker-dealer or other person
who participates in such distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase any security which is the
subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security. All of
the foregoing may affect the marketability of the shares offered hereby this
prospectus.
This offering will terminate on the earlier of (1) the date on which the
shares are eligible for resale without restrictions pursuant to Rule 144(k)
under the Securities Act or (2) the date on which all shares offered by this
prospectus have been sold by the selling shareholder.
VALIDITY OF COMMON STOCK
The validity of the common stock offered by this prospectus will be passed
upon for us by King & Spalding, Atlanta, Georgia.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K of adam.com, Inc. (formerly, A.D.A.M.
Software, Inc.) for the year ended March 31, 1999 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, a company that has the right to receive shares of our common
stock (the "selling shareholder") may sell up to an aggregate of 528,000 shares
of common stock in one or more offerings. This prospectus and any applicable
prospectus supplement provided to you should be considered together with the
additional information described under the heading "Where You Can Find More
Information."
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about
our company and the securities offered by this prospectus. That registration
statement can be read at the SEC web site or at the SEC offices mentioned under
the heading "Where You Can Find More Information."
12
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the SEC's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information filed with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
our offering is completed.
- Our Annual Report on Form 10-K for the year ended March 31, 1999, filed
with the SEC on June 29, 1999;
- Our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;
- Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1999;
- Our Current Report on Form 8-K dated November 15, 1999; and
- The description of our common stock contained in our registration
statement on Form 8-A filed with the SEC on October 11, 1995, including
any amendments or reports filed for the purpose of updating such
description.
You may request a copy of these filings (other than an exhibit to a filing
unless that exhibit is specifically incorporated by reference into that filing),
at no cost, by writing or telephoning us at the following address:
Michael S. Fisher
Director of Finance/Administration
adam.com, Inc.
1600 RiverEdge Parkway, Suite 800
Atlanta, GA 30328
(770) 980-0888
You should rely only on the information incorporated by reference or
provided in this prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ADAM.COM, INC.
UP TO 528,000 SHARES
OF
COMMON STOCK
--------------
PROSPECTUS
--------------
,
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, payable by the
registrant connection with the sale of common stock being registered. All
amounts are estimates, except the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 2,079
Nasdaq National Market listing fee.......................... 17,500
Printing expenses........................................... 10,000
Legal fees and expenses..................................... 50,000
Accounting fees and expenses................................ 10,000
Blue sky fees and expenses.................................. 500
Miscellaneous............................................... 921
-------
Total................................................... $91,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Georgia Business Corporation Code permits a corporation to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of duty of care or other duty as a
director, provided that no provision shall eliminate or limit the liability of a
director: (A) for any appropriation, in violation of his duties, of any business
opportunity of the corporation; (B) for acts or omissions which involve
intentional misconduct or a knowing violation of law; (C) for unlawful corporate
distributions; or (D) for any transaction from which the director received an
improper personal benefit. This provision pertains only to breaches of duty by
directors in their capacity as directors (and not in any other corporate
capacity, such as officers) and limits liability only for breaches of fiduciary
duties under Georgia corporate law (and not for violation of other laws, such as
the federal securities laws). The Company's Amended and Restated Articles of
Incorporation (the "Restated Articles") exonerate the Company's directors from
monetary liability to the extent permitted by this statutory provision.
The Company's Restated Articles and Amended and Restated Bylaws (the
"Restated Bylaws") also provide that the Company shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (including any action by or in the right of the Company), by
reason of the fact that such person is or was a director or officer of the
Company, or is or was serving at the request of the Company as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including reasonable attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding, if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Company (and with respect to any criminal
action or proceeding, if such person had no reasonable cause to believe such
person's conduct was unlawful), to the maximum extent permitted by, and in the
manner provided by, the Georgia Business Corporation Code. In addition, the
Restated Bylaws provide that the Company will advance to its directors or
officers reasonable expenses of any such proceeding.
Notwithstanding any provisions of the Company's Restated Articles and
Amended Bylaws to the contrary, the Georgia Business Corporation Code provides
that the Company shall not indemnify a director or officer for any liability
incurred in a proceeding in which the director is adjudged liable to the Company
or is subjected to injunctive relief in favor of the Company: (1) for any
appropriation, in violation of his duties, of any business opportunity of the
Company; (2) for acts or omissions which
II-1
<PAGE>
involve intentional misconduct or a knowing violation of law; (3) for unlawful
corporate distributions; or (4) for any transaction from which the director or
officer received an improper personal benefit.
The Company has purchased insurance with respect to, among other things, any
liabilities that may accrue under the statutory provisions referred to above.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
4.1(1) Amended and Restated Articles of Incorporation of the
Registrant
4.2(1) By Laws of the Registrant
4.3* Form of Debenture to be issued by the Company to Fusion
Capital Fund I, LLC
5.1 Opinion of King & Spalding
10.1* Securities Purchase Agreement, dated as of November 15,
1999, between the Company and Fusion Capital Fund, LLC
23.1 Consent of PricewaterhouseCoopers LLP
23.3 Consent of King and Spalding (included in its opinion filed
as exhibit 5.1).
</TABLE>
- ------------------------
(1) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999.
* Previously filed
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) to reflect in the Prospectus any facts of events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the commission pursuant to Rule 424(b) if,
in the aggregate, the charges in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (1) (i) and (1) (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the 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.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the Georgia Business Corporation Act, the charter or
the bylaws of the registrant, or otherwise, the registrant has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by 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 hereunder, 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 of whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia, on this 30th day of December, 1999.
<TABLE>
<S> <C> <C>
ADAM.COM, INC.
BY: /S/ ROBERT S. CRAMER, JR.
-----------------------------------------
Robert S. Cramer, Jr.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment has been signed by the following persons in the capacities on
December 30, 1999.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ ROBERT S. CRAMER, JR. Chairman of the Board and Chief Executive
------------------------------------------- Officer
Robert S. Cramer, Jr. (Principal Executive Officer)
*
------------------------------------------- Director of Finance and Administration
Michael S. Fisher (Principal Financial and Accounting Officer)
------------------------------------------- Director
Linda Davis
*
------------------------------------------- Director
Sally D. Elliott
*
------------------------------------------- Director
David S. Howe
------------------------------------------- Director
Hamilton Jordan
/s/ JOHN W. MCCLAUGHERTY
------------------------------------------- Director
John W. McClaugherty
*
------------------------------------------- Director
Gregory M. Swayne
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
------------------------------------------- Director
Francis J. Tedesco, M.D.
</TABLE>
<TABLE>
<S> <C> <C>
* /s/ ROBERT S. CRAMER, JR.
------------------------------------
By: Robert S. Cramer, Jr.
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
EXHIBIT 5.1
December 30, 1999
adam.com, Inc.
1600 Riveredge Parkway
Suite 800
Atlanta, Georgia 30328
Re: adam.com, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for adam.com, Inc., a Georgia corporation (the
"Company"), in connection with the preparation of a Registration Statement on
Form S-3 (the "Registration Statement") to be filed with the Securities and
Exchange Commission relating to 450,000 Conversion Shares and 78,000 First
Closing Commitment Shares, each as defined in and to be issued pursuant to that
certain Securities Purchase Agreement dated as of November 15, 1999 by and
between the Company and Fusion Capital Fund, LLC (the "Shares").
As such counsel, we have examined and relied upon such records, documents,
certificates and other instruments as in our judgment are necessary or
appropriate to form the basis for the opinions hereinafter set forth. In all
such examinations, we have assumed the genuineness of signatures on original
documents and the conformity to such original documents of all copies submitted
to us as certified, conformed or photographic copies, and as to certificates of
public officials, we have assumed the same to have been properly given and to be
accurate.
The opinions expressed herein are limited in all respects to the corporate
law of the State of Georgia, and no opinion is expressed with respect to the
laws of any other jurisdiction or any effect which such laws may have on the
opinions expressed herein. This opinion is limited to the matters stated herein,
and no opinion is implied or may be inferred beyond the matters expressly stated
herein.
Based upon the foregoing, we are of the opinion that the Shares will be
validly issued, fully paid and nonassessable.
This opinion is given as of the date hereof, and we assume no obligation to
advise you after the date hereof of facts or circumstances that come to our
attention or changes in law that occur which could affect the opinions contained
herein. This letter is being rendered solely for the benefit of adam.com, Inc.
in connection with the matters addressed herein. This opinion may not be
furnished to or relied upon by any person or entity for any purpose without our
prior written consent.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement.
Very truly yours,
King & Spalding
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated May 14, 1999 relating to the financial
statements and financial statement schedules, which appears in adam.com, Inc.'s
(formerly A.D.A.M. Software, Inc.) Annual Report on Form 10-K for the year ended
March 31, 1999. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Atlanta, Georgia
December 30, 1999
