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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 6, 2000.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
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:
STACEY K. GEER, ESQ.
WILLIAM G. ROCHE, 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 1,354,286 shares(2) $4.19 $5,671,073 $1,498
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) based on the average of the high and low
reported sales price on the Nasdaq Stock Market on August 29, 2000.
(2) Includes (a) 1,200,000 shares which we currently estimate will be pursuant
to a common stock purchase agreement, and (b) 154,286 shares which we will
issue as a commitment fee.
------------------------------
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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 6, 2000.
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 1,354,286 SHARES
ADAM.COM, INC.
COMMON STOCK
This prospectus relates to the sale of up to 1,354,286 shares of our common
stock which we may issue to Fusion Capital Fund II, LLC. Fusion Capital is
referred to in this prospectus as the selling shareholder.
On September 5, 2000, we entered into a common stock purchase agreement with
Fusion Capital Fund II, LLC pursuant to which Fusion Capital agreed to purchase
up to $12.0 million of our common stock in two tranches. The purchase price will
be based upon the future performance of our common stock.
We estimate that the maximum number of shares we will sell to Fusion Capital
under the first tranche of the common stock purchase agreement will be
1,200,000. If more than 1,200,000 shares are issuable to Fusion Capital under
the first tranche, we will have the right and presently intend to terminate the
common stock purchase agreement without any payment or liability to Fusion
Capital. Under the terms of the common stock purchase agreement, in connection
with commencing the first tranche, Fusion Capital will receive 154,286 shares of
our common stock as a commitment fee. This prospectus relates to the offer and
sale from time to time by Fusion Capital of these shares. We will not receive
any of the proceeds from the sale of the shares being offered by this
prospectus.
Our common stock is quoted on the Nasdaq National Market under the symbol
"ADAM." On September 1, 2000, the last reported sale price for our common stock
as reported on the Nasdaq National Market was $4.313 per share. We have applied
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 IS DEEMED TO BE AN "UNDERWRITER" WITHIN THE MEANING
OF THE SECURITIES ACT OF 1933, AS AMENDED. 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 September , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
adam.com.................................................... 2
Risk Factors................................................ 3
The Financing Transaction................................... 8
Use of Proceeds............................................. 10
Selling Shareholder......................................... 11
Plan of Distribution........................................ 12
Validity of Common Stock.................................... 14
Experts..................................................... 14
About This Prospectus....................................... 14
Where You Can Find More Information......................... 15
Incorporation by Reference.................................. 15
</TABLE>
ADAM.COM
adam.com, Inc. ("adam.com", "we", or "the Company") is a leading
business-to-business content service provider of health and medical information
products. The Company's primary markets are Internet-based health information
sites, health organizations, education, and other vertical markets engaged in
providing or using health and medical information. Founded in 1990, adam.com is
headquartered in Atlanta, Georgia. Historically, adam.com has created and
published medical and health-related information content that was delivered to
end-users primarily through multimedia CD-ROM, but also included a variety of
other second-tier distribution mediums, including broadcast, print and
Internet-ready applications. The Company marketed these products to the
education, consumer retail and professional markets. Since January 1999,
adam.com has taken significant steps to transition itself as a content service
provider of health, medical and wellness information primarily distributed
online. Today, adam.com's Internet business model is based on the syndication of
adam.com's award winning health and medical content to a variety of Web-based
and other businesses including health sites, internet portals, e-commerce sites,
media sites, health plans, governments, and institutions.
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 COULD
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 INCLUDED OR INCORPORATED BY REFERENCE 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 $5.7 million for the six months
ended June 30, 2000, $9.6 million for the nine months ended December 31, 1999,
$2.1 million for the twelve months ended March 31, 1999 and $5.4 million for the
twelve months ended March 31, 1997. 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, WHICH WOULD HURT OUR FINANCIAL RESULTS.
Since inception we have funded operations with debt and equity capital. In
the nine months ended December 31, 1999, our total costs and expenses increased
to $13.1 million from $5.2 million in the nine months ended December 31, 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, and the funds currently available to us may be
inadequate. There can be no assurance that capital will be available to us on
satisfactory terms or at all.
Even if we are able to access all $12 million available under the common
stock purchase agreement with Fusion Capital, we may still need additional
capital to fully implement our business, operating and development plans. In
addition, one result of the raising of additional capital through the common
stock purchase agreement with Fusion Capital would be the issuance of additional
shares of our common stock. The issuance of additional shares to Fusion Capital
pursuant to the common stock purchase agreement could result in substantial
dilution to our existing shareholders.
WE MAY BE UNABLE TO COMPETE EFFECTIVELY WITH OTHER ONLINE PROVIDERS OF
HEALTHCARE INFORMATION, WHICH WOULD CAUSE OUR INTERNET-BASED STRATEGY TO BE
UNSUCCESSFUL.
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. While we do not
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compete directly with consumer-oriented web sites for user traffic, we do
compete with health content providers that are currently distributing health
information in either online or traditional distribution channels. We may not be
able to compete effectively 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 customers, such as
the November 1999 merger of Healtheon, WebMD, MEDE America Corporation and
Medcasi to form Healtheon/WebMD, could reduce our customer base.
WE CURRENTLY DEPEND UPON A LIMITED NUMBER OF STRATEGIC RELATIONSHIPS, AND
THESE AND OTHER STRATEGIC RELATIONSHIPS WILL BE AN IMPORTANT PART OF OUR FUTURE
SUCCESS.
The success of our business is and will be due in part to our ability to
enter into successful strategic marketing alliances and other strategic
relationships. Also, we derive a significant portion of our operating revenue
from a limited humber of strategic relationships. We may not be able to form
additional strategic relationships, and the inability to form such relationships
may harm our operating results. In addition, there can be no assurance that:
- existing or contemplated strategic relationships will be commercially
successful;
- we will be able to negotiate terms acceptable to us with potential
strategic partners; or
- potential strategic relationships, if established, will be commercially
successful.
The potential increased revenues from such relationships may be reduced by
requirements to provide volume price discounts and other allowances and
potential significant costs incurred in customizing products. In addition, there
can be no assurance that parties with whom strategic relationships are
established will not pursue alternative technologies or develop their alternate
products in addition to or in lieu of ours, either on their own or in
collaboration with others, including our competitors. Such alternative
technologies or products may be in direct competition with our products and may
significantly erode the benefits of such strategic relationships.
WE FACE RAPID TECHNOLOGICAL CHANGE IN THE ONLINE HEALTH INFORMATION INDUSTRY
AND OUR BUSINESS WILL SUFFER IF WE CANNOT QUICKLY ADAPT TO THIS CHANGE.
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, WHICH
WOULD LIMIT OUR POTENTIAL GROWTH TO INTERNALLY GENERATED GROWTH ONLY.
As part of our growth strategy, we acquired all of the assets of
Informational Medical Systems, Inc. and drgreene.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
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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 MAY BE UNABLE TO ATTRACT NEW PERSONNEL, WHICH WOULD ADVERSELY AFFECT
IMPLEMENTATION OF OUR NEW INTERNET-BASED STRATEGY.
In order to effectively develop and deliver the health information content,
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 and we may be unable to attract these
employees. If we do not succeed in attracting these types of new employees, we
may be unable to fully implement our Internet-based strategy and our business
will suffer.
OUR STOCK PRICE IS EXTREMELY VOLATILE AND COULD DECLINE SIGNIFICANTLY.
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 $1.75 per share to a high price of $26.75 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.
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, so our stock price could decline
even if our Internet-based strategy is successful. 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.
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, certain 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.
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MANY OF OUR SHARES ARE ELIGIBLE FOR FUTURE SALE AND ARE SUBJECT TO
REGISTRATION RIGHTS THAT COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON
STOCK.
In early 2000, we registered an aggregate of 928,230 shares of common stock
issuable in connection with a financing transaction with Fusion Capital Fund I,
LLC, an affiliate of Fusion Capital Fund II, LLC, issued in connection with our
acquisition of Informational Medical Systems and drgreene.com, and issuable upon
the exercise of warrants issued in financing transactions effected in 1994 and
1995. These shares are freely tradable. The sale of a significant amount of
these shares at any given time could cause the trading price of our common stock
to decline and to be highly volatile.
If our shareholders sell substantial additional amounts of common stock,
including shares issued upon the exercise of outstanding stock options, in the
public market following this offering, the market price of our common stock
could fall. Such sales also could make it more difficult for us to sell equity
or equity-related securities in the future at a time and price that we deem
appropriate.
Some of our shareholders may have the right, subject to specified
conditions, to include their shares in registration statements relating to our
securities. By exercising their registration rights and causing a large number
of shares to be registered and sold in the public market, these holders may
cause the price of our common stock to fall. In addition, any demand by holders
of registration rights to include shares of common stock held by them in a
registration initiated by us could adversely affect our ability to raise needed
capital.
OUR PRINCIPAL SHAREHOLDERS HAVE SUBSTANTIAL INFLUENCE AND THEIR INTEREST MAY
DIFFER FROM THOSE OF OUR REMAINING SHAREHOLDERS.
As of December 31, 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. If our remaining shareholders have interests that differ from
these holders, their needs may not be met.
EVEN IF OUR STOCK PRICE DECREASES, WE MAY ELECT TO CAUSE PURCHASES OF OUR
COMMON STOCK TO BE MADE UNDER THE COMMON STOCK PURCHASE AGREEMENT, CAUSING MORE
SHARES TO BE OUTSTANDING AND RESULTING IN SUBSTANTIAL DILUTION.
The purchase price for the common stock to be issued to the selling
shareholder under the common stock purchase agreement will fluctuate based on
the closing price of our common stock. See "The Financing Transaction--Purchase
of Shares Under the Common Stock Purchase Agreement" for a detailed description
of the purchase price and the relation of the purchase price to the percentage
of the outstanding shares of our common stock issuable to Fusion Capital
pursuant to the common stock purchase agreement.
All shares registered in this offering will be freely tradeable. We expect
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 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 Fusion Capital
purchased the full amount of shares purchasable under the first tranche of the
common stock purchase agreement on the date of this prospectus, the purchase
price would have been $4.00 per share and Fusion Capital would have been able to
purchase 1,200,000 shares of our common stock. Assuming Fusion Capital's
purchase under the first tranche of the common stock purchase agreement of a
total of 1,200,000 shares of common stock on the date of this prospectus, these
shares, along with the 154,286 shares issuable as a commitment fee, would
represent 19.4% of our outstanding common stock as of September 5, 2000. This
would result in significant dilution to the ownership interests of other holders
of our common stock. Such dilution could be more significant if the trading
price of our common stock is lower than the current trading price of our stock
at the time Fusion Capital purchases shares of our common stock under the common
stock purchase
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agreement, as a lower trading price would cause more shares of our common stock
to be issuable to Fusion Capital. Assuming a drop in the trading price of our
common stock to $1.00, and a corresponding decrease in the purchase price under
the common stock purchase agreement, 6,000,000 shares of common stock would be
issuable to Fusion Capital under the first tranche of the common stock purchase
agreement. This would represent more than 100% of our currently outstanding
common stock. Although we have the right to block Fusion Capital's purchases
under the common stock purchase agreement if our stock price is below $16.50, we
may still elect to require Fusion Capital's purchase of shares under the common
stock purchase agreement. We can require Fusion Capital to purchase additional
shares if our trading price is at least $4.125. In the event that we decide to
issue a number of shares that represents greater than 20% of our outstanding
shares of common stock, we would first seek shareholder approval. The purchase
under the common stock purchase agreement of a significant percentage of our
outstanding stock may result in substantial dilution to the ownership interests
of other holders of our common stock. See page 8 for a table that shows the
number of shares issuable and potential dilution based on varying market prices.
THE COMMON STOCK PURCHASE AGREEMENT COULD LEAD TO DOWNWARD PRESSURE ON OUR
STOCK PRICE.
Either actual dilution caused by sales of our common stock to Fusion Capital
or the perception of such dilution by holders of our common stock could cause
holders to elect to sell the shares of common stock held by them, which could
cause the trading price of our common stock to decrease. Furthermore, a
perception that sales of our common stock to Fusion Capital may lead to downward
pressure on the trading price of our common stock could provide an incentive for
short-selling which could also adversely affect the trading price of our common
stock.
THE SALE OF THE SHARES REGISTERED IN THIS OFFERING COULD CAUSE OUR STOCK
PRICE TO DECLINE.
All shares registered in this offering will be 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. We may require the selling
shareholder to purchase a significant amount of common stock at one time. 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.
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THE FINANCING TRANSACTION
GENERAL
On September 5, 2000, we entered into a common stock purchase agreement with
Fusion Capital Fund II, LLC pursuant to which Fusion Capital agreed to purchase
up to $12.0 million of our common stock in two tranches. Each $6.0 million
tranche is to be purchased over a six-month period, which may be extended to
12 months at our discretion. The selling price of the shares will be equal to
the lesser of (1) $16.50 or (2) a price based upon the future performance of the
common stock without any fixed discount to the market price.
After all of the shares of our common stock purchasable under the first
tranche of the common stock purchase agreement have been purchased by Fusion
Capital, we have the right to deliver to Fusion Capital an irrevocable written
notice stating that we elect to commence the second tranche. The obligation of
Fusion Capital to commence the second tranche is subject only to customary
conditions, all of which are outside the control of Fusion Capital.
PURCHASE OF SHARES UNDER THE COMMON STOCK PURCHASE AGREEMENT
Under the common stock purchase agreement, Fusion Capital will purchase
shares of our common stock by purchasing from time to time a specified dollar
amount of our common stock. Subject to the limits on purchase and the
termination rights described below, each month during the six-month term of the
first tranche, Fusion Capital will purchase $1.0 million of our common stock,
plus any amounts for any prior month that have not yet been sold to Fusion
Capital, at the applicable selling price. This amount may be increased or
decreased by us. The selling price per share is equal to the lesser of:
- the lowest sale price of our common stock on the day of submission of a
purchase 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 date of submission of a purchase
notice by Fusion Capital; or
- $16.50
The selling price 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 purchase
price. Notwithstanding the foregoing, Fusion Capital may not purchase shares of
common stock under the common stock purchase agreement if Fusion Capital or its
affiliates would beneficially own more than 4.99% of our then aggregate
outstanding common stock immediately after the proposed purchase. The following
table sets forth the number of shares of our common stock that would be sold to
Fusion Capital upon our sale of common stock under the first tranche of the
common stock purchase agreement at varying purchase prices:
<TABLE>
<CAPTION>
NUMBER OF SHARES TO BE ISSUED UPON A
FULL PURCHASE OF THE FIRST TRANCHE OF PERCENT OF OUR COMMON STOCK
ASSUMED PURCHASE PRICE THE COMMON STOCK PURCHASE AGREEMENT OUTSTANDING AS OF SEPTEMBER 5, 2000 (1)
---------------------- ------------------------------------- ---------------------------------------
<S> <C> <C>
$3.00......................... 2,000,000(2) 27.7%
$4.00......................... 1,500,000(2) 22.3
$4.313 the selling price on
September 1, 2000........... 1,391,304(2) 21.6
$5.00......................... 1,200,000 19.4
$10.00........................ 600,000 11.8
$16.50, the purchase price
ceiling..................... 363,636 8.4
</TABLE>
------------------------
(1) Based on 5,619,127 shares outstanding as of September 5, 2000. Assumes the
issuance of 154,286 shares issuable to Fusion Capital as a commitment fee
and the number of shares issuable at the corresponding assumed purchase
price set forth in the adjacent column.
8
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(2) We estimate that we will issue no more than 1,200,000 shares to Fusion
Capital under the first tranche of the common stock purchase agreement,
excluding the shares issuable as a commitment fee, all of which are included
in this offering. If more than 1,200,000 shares are issuable to Fusion
Capital under the first tranche of the common stock purchase agreement, we
currently intend to terminate the common stock purchase agreement without
any payment or liability to Fusion Capital.
OUR RIGHT TO PREVENT PURCHASES
If the closing sale price of our common stock is below $16.50, we have the
unconditional right to suspend purchases until the earlier of (1) our revocation
of such suspension and (2) such time as the sale price of our common stock is
above $16.50. To the extent we need to use the cash proceeds of the sales of
common stock under the common stock purchase agreement for working capital or
other business purposes, we do not intend to restrict purchases under the common
stock purchase agreement.
OUR RIGHT TO MANDATORY PURCHASES
If the closing sales price of our common stock on each of the five trading
days immediately prior to the first trading day of any monthly period is at
least $4.125, we have the right to require that Fusion Capital purchase all or a
portion of the remaining amount of the first tranche of the common stock
purchase agreement during the next two monthly periods. We may revoke, in our
sole discretion, our written request with respect to any purchases in excess of
the amount that Fusion Capital is otherwise obligated to purchase.
OUR TERMINATION RIGHTS
If the closing price of our common stock is below $16.50 for any 10
consecutive trading days, then we may elect to terminate the common stock
purchase agreement without any liability or payment to Fusion Capital. If more
than 1,200,000 shares are issuable to Fusion Capital under the common stock
purchase agreement, we presently intend to terminate the common stock purchase
agreement without any payment or liability to Fusion Capital.
EFFECT OF PERFORMANCE OF THE COMMON STOCK PURCHASE AGREEMENT ON ADAM.COM AND OUR
SHAREHOLDERS
All shares registered in this offering will be 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 purchase all of the shares of common stock issuable under
the first tranche of the common stock purchase agreement, and it may sell all of
the shares of common stock it acquires upon purchase. Therefore, the purchases
under the common stock purchase agreement may result in substantial dilution to
the interests of other holders of our common stock. However, we have the right
to block purchases of the common stock purchase agreement and to require
termination of the common stock purchase agreement in some cases.
NO SHORT-SELLING OR HEDGING BY FUSION CAPITAL
Fusion Capital has agreed that neither it nor any of its affiliates will
engage in any direct or indirect short-selling or hedging of our common stock
during any time prior to the termination of the common stock purchase agreement.
EVENTS OF DEFAULT
Generally, Fusion Capital may terminate the common stock purchase agreement
without any liability or payment to adam.com upon the occurrence of any of the
following events of default:
- if for any reason the shares offered by this prospectus cannot be sold
pursuant to this prospectus for a period of 10 consecutive trading days or
for more than an aggregate of 30 trading days in any 365-day period;
9
<PAGE>
- suspension by the Nasdaq National Market of our common stock from trading
for a period of 10 consecutive trading days or for more than an aggregate
of 30 trading days in any 365-day period;
- our failure to satisfy any listing criteria of the Nasdaq National Market
for a period of 10 consecutive trading days or for more than an aggregate
of 30 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 purchase under the common
stock purchase agreement of shares of common stock; (2) our failure to
confirm to the transfer agent Fusion Capital's purchase notice or (3) the
failure of the transfer agent to issue shares of our common stock upon
delivery of a purchase notice;
- any material breach of the representations or warranties or covenants
contained in the common stock purchase agreement or any related agreements
which has or which could have a material adverse affect on adam.com
subject to a cure period of 10 trading days;
- a default of any payment obligation of adam.com in excess of
$1.0 million; or
- any participation in insolvency or bankruptcy proceedings by or against
adam.com.
ADDITIONAL SHARES ISSUED TO FUSION CAPITAL
Under the terms of the common stock purchase agreement, in connection with
the commencement of the first tranche, Fusion Capital will receive 154,286
shares of our common stock as a commitment fee. Unless an event of default
occurs, these shares must be held by Fusion Capital until the common stock
purchase agreement has been terminated. On the date that the second tranche is
commenced, Fusion Capital will be entitled to receive an additional commitment
fee, payable in shares of our common stock, equal to 8% of $6.0 million or
$480,000, divided by the lower of (1) the average of the closing price of our
common stock for the five consecutive trading days immediately preceding the
trading day which is two trading days prior to the commencement of the second
tranche and (2) the average of the closing price of our common stock for the
five consecutive trading days immediately preceding the date we deliver notice
of our election to commence the second tranche.
NO VARIABLE PRICED FINANCINGS
Until the termination of the common stock purchase agreement, we have 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 we have
obtained Fusion Capital's prior written consent.
HOLDINGS OF FUSION CAPITAL UPON TERMINATION OF THE OFFERING
Because Fusion Capital 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 Fusion Capital upon termination of the offering.
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.
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<PAGE>
SELLING SHAREHOLDER
The selling shareholder is Fusion Capital Fund II, LLC. On January 28, 2000,
we issued a 0% Senior Secured Convertible Debenture with a principal amount of
$6,000,000 to Fusion Capital Fund I, LLC, an affiliate of the selling
shareholder. In conjunction with this transaction, we issued 59,542 shares of
common stock as a commitment fee. In connection with conversions of the
principal amount of the debenture, we have issued 587,339 shares of our common
stock to Fusion Capital at an average conversion price of $8.86. The debenture
has been cancelled and no additional shares will be issued upon conversion of
the debenture. As a result of Fusion Capital's commitment to provide us with
additional financing under the common stock purchase agreement, we have decided
not to issue the second debenture under the securities purchase agreement dated
November 15, 1999, between Fusion Capital Fund I, LLC and adam.com.
Under the common stock purchase agreement, Fusion Capital agreed to purchase
up to $12.0 million of our common stock in two tranches of $6.0 million. The
purchase price of our common stock is based upon the future performance of our
common stock. We will commence the first tranche with Fusion Capital after this
registration statement is effective. At our sole option, we can require Fusion
Capital to commence the second tranche and purchase up to an additional
$6.0 million of our common stock.
We estimate that the maximum number of shares we will sell to Fusion Capital
under the first tranche of the common stock purchase agreement will be
1,200,000. If more than 1,200,000 shares are issuable to Fusion Capital under
the first tranche of the common stock purchase agreement, we have the right and
presently intend to terminate the common stock purchase agreement without any
payment or liability to Fusion Capital. We have also agreed to issue 154,286
additional shares to Fusion Capital as a commitment fee for commencing the first
tranche under the common stock purchase agreement. Unless an event of default
occurs, these shares must be held by Fusion Capital until the common stock
purchase agreement has been terminated. This prospectus relates to the offer and
sale from time to time by Fusion Capital of these shares. The common stock
purchase agreement is described in detail under the heading "The Financing
Transaction."
Notwithstanding the limitations set forth in the common stock purchase
agreement, if Fusion Capital was to purchase all of the common stock issuable in
the first tranche of the common stock purchase agreement, the 1,200,000 shares
purchased, together with the 154,286 additional shares issuable to Fusion
Capital as a commitment fee, Fusion Capital would beneficially own 19.4% of our
outstanding common stock as of September 5, 2000.
EFFECT OF PERFORMANCE OF THE COMMON STOCK PURCHASE AGREEMENT ON ADAM.COM AND OUR
SHAREHOLDERS
All shares registered in this offering will be 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 purchase all of the shares of common stock issuable in
the first tranche of the common stock purchase agreement, and it may sell all of
the shares of common stock it acquires upon purchase. Therefore, the purchase of
shares in the first tranche of the common stock purchase agreement may result in
substantial dilution to the interests of other holders of our common stock.
However, we have the right to block purchases under the common stock purchase
agreement and to require termination of the common stock purchase agreement in
some cases.
OUR ABILITY TO RESTRICT PURCHASES
The common stock purchase agreement provides that we may restrict purchases
under the common stock purchase agreement if the closing sale price of our
common stock is below $16.50. To the extent we need to use the cash proceeds of
sales of common stock issuable in the first tranche of
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<PAGE>
the common stock purchase agreement for working capital or other business
purposes, we do not intend to restrict purchases under the common stock purchase
agreement.
HOLDINGS OF FUSION CAPITAL UPON TERMINATION OF THIS OFFERING
Fusion Capital beneficially owns 59,542 shares of our common stock, which it
acquired as a commitment fee in connection with the financing provided in
January 2000. Fusion Capital may sell these 59,542 shares. Following completion
of this offering, Fusion Capital will beneficially own no more than 213,828
shares, which represent the 59,542 shares that it currently beneficially owns
plus the 154,286 shares which will be issued as a commitment fee upon the
closing of the financing transaction. The 154,286 shares to be issued as a
commitment fee may be sold following termination of the common stock purchase
agreement. All of these shares are deemed to be beneficially owned by Steven G.
Martin and Joshua B. Scheinfeld, the principals of Fusion Capital. Messrs.
Martin and Scheinfeld have shared voting and dispositive power of the shares
being offered pursuant to this prospectus.
PLAN OF DISTRIBUTION
The common stock offered by this prospectus is being offered by the selling
shareholder, Fusion Capital Fund II, 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.
The following table sets forth the number of shares of our common stock that
would be sold to Fusion Capital upon our sale of common stock under the first
tranche of the common stock purchase agreement at varying purchase prices:
<TABLE>
<CAPTION>
NUMBER OF SHARES TO BE ISSUED UPON A
FULL PURCHASE OF THE FIRST TRANCHE OF PERCENT OF OUR COMMON STOCK
ASSUMED PURCHASE PRICE THE COMMON STOCK PURCHASE AGREEMENT OUTSTANDING AS OF SEPTEMBER 5, 2000 (1)
---------------------- ------------------------------------- ---------------------------------------
<S> <C> <C>
$3.00......................... 2,000,000(2) 27.7%
$4.00......................... 1,500,000(2) 22.3
$4.313, the selling price on
September 1, 2000........... 1,391,304(2) 21.6
$5.00......................... 1,200,000 19.4
$10.00........................ 600,000 11.8
$16.50, the purchase price
ceiling..................... 363,636 8.4
</TABLE>
12
<PAGE>
------------------------
(1) Based on 5,619,127 shares outstanding as of September 5, 2000. Assumes the
issuance of 154,286 shares issuable to Fusion Capital as a commitment fee
and the number of shares issuable at the corresponding assumed purchase
price set forth in the adjacent column.
(2) We estimate that we will issue no more than 1,200,000 shares to Fusion
Capital under the first tranche of the common stock purchase agreement,
excluding shares issuable as a commitment fee, all of which are included in
this offering. If more than 1,200,000 shares are issuable to Fusion Capital
under the first tranche of the common stock purchase agreement, we currently
intend to terminate the common stock purchase agreement without any payment
or liability to Fusion Capital.
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 is an "underwriter" within the meaning of the
Securities Act of 1933. 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 we nor the selling shareholder can presently estimate the amount of
compensation that any agent will receive. We know 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.
We 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 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, we
have 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 OUR COMMON STOCK DURING THE TERM OF THE
COMMON STOCK PURCHASE AGREEMENT.
We have advised the selling shareholder that while it is engaged in a
distribution of the shares included in this prospectus it is 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.
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<PAGE>
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 and by reference to the Transition Report on
Form 10-K/A of adam.com, Inc. for the nine months ended December 31, 1999 have
been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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 may sell up to an aggregate of 1,354,286 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."
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<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 with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room in Washington, D.C., or the SEC's
Regional Offices in New York, New York and Chicago, Illinois by calling the SEC
at 1-800-SEC-0330. You may also request copies of such documents, upon payment
of a duplicating fee, by writing to the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Our SEC filings are also available to the public from
the SEC's web site at HTTP://WWW.SEC.GOV.
INCORPORATION BY REFERENCE
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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
- Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000;
- Our Current Report on Form 8-K dated November 15, 1999;
- Our Current Report on Form 8-K dated December 16, 1999;
- Our Current Report on Form 8-K dated December 30, 1999;
- Our Transition Report on Form 10-K for the nine month period ended
December 31, 1999, filed with the SEC on March 30, 2000 and as amended by
Form 10-K/A filed on May 1, 2000; 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
Vice President-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.
15
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ADAM.COM, INC.
UP TO 1,354,286 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 and the Nasdaq listing
fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 1,498
Nasdaq National Market listing fee.......................... 13,543
Printing expenses........................................... 5,000
Legal fees and expenses..................................... 25,000
Accounting fees and expenses................................ 5,000
Blue sky fees and expenses.................................. 500
Miscellaneous............................................... 459
-------
Total................................................... $51,000
=======
</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
II-1
<PAGE>
violation of his duties, of any business opportunity of the Company; (2) for
acts or omissions which 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* Amended and Restated Articles of Incorporation of the
Registrant
4.2* ByLaws of the Registrant
5.1 Opinion of King & Spalding
10.1 Common Stock Purchase Agreement dated as of September 6,
2000 between the Company and Fusion Capital Fund II, LLC
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of King and Spalding (included in its opinion filed
as exhibit 5.1).
</TABLE>
------------------------
* Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999.
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.
(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
II-2
<PAGE>
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta,
State of Georgia, on this 6th day of September, 2000.
<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>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Robert S. Cramer, Jr. and Michael S.
Fisher and each of them, his true and lawful attorney-in-fact and agents, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to sign any registration
statement for the same offering covered by this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and all post-effective amendments thereto, and to file
the same, with all exhibits thereto and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities on September 6, 2000.
<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)
/s/ MICHAEL S. FISHER
------------------------------------------- Vice President of Finance and Administration
Michael S. Fisher (Principal Financial and Accounting Officer)
/s/ LINDA DAVIS
------------------------------------------- Director
Linda Davis
/s/ DANIEL S. HOWE
------------------------------------------- Director
Daniel S. Howe
/s/ JOHN W. MCCLAUGHERTY
------------------------------------------- Director
John W. McClaugherty
/s/ FRANCIS J. TEDESCO, M.D.
------------------------------------------- Director
Francis J. Tedesco, M.D.
</TABLE>
II-4
