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Filed Pursuant to Rule 424(b)(1)
Registration Statement No. 333-54037
PROSPECTUS
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318,724 SHARES
INFOSEEK CORPORATION
COMMON STOCK
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This Prospectus relates to the public offering, which is not being
underwritten, of shares of the common stock ("Common Stock") of Infoseek
Corporation, a California corporation ("Infoseek" or the "Company") offered from
time to time by the Selling Shareholders named herein (the "Selling
Shareholders") for their own benefit. It is anticipated that the Selling
Shareholders will generally offer shares of Common Stock for sale at prevailing
prices in the over-the-counter market on the date of sale. The Company will
receive no part of the proceeds of sales made hereunder. None of the shares
offered pursuant to this Prospectus have been registered prior to the filing of
the Registration Statement of which this Prospectus is a part.
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "SEEK." On June 8, 1998, the last reported sale price of the
Company's Common Stock was $23.25 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
The Selling Shareholders and any broker executing selling orders on behalf
of the Selling Shareholders may be deemed to be an "underwriter" within the
meaning of the Securities Act. Commissions received by any such broker may be
deemed to be underwriting commissions under the Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS JUNE 9, 1998.
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO
MAKE SUCH OFFER, SOLICITATION OR SALE. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy and information statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements, and other information filed by the Company can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C., as well as the regional
offices of the Commission located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois, and Seven World Trade Center, Suite 1300, New
York, New York. Copies of such materials can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Company's Common Stock is listed on the Nasdaq
National Market. Reports, proxy and information statements and other information
concerning the Company are available for inspection at the National Association
of Securities Dealers, Inc. at 9513 Key West Avenue, Rockville, Maryland 20850.
The Commission maintains a World Wide Web site that contains reports, proxy and
information statements, and other information filed through the Commission's
Electronic Data Gathering, Analysis and Retrieval System. This Web site can be
accessed at http://www.sec.gov.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and such Common
Stock, reference is made to the Registration Statement and the exhibits and
schedules thereto. Statements contained in this Prospectus as to the contents of
any contract or any other document referred to are not necessarily complete,
and, in each instance, reference is made to the copy of such contract or
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. Copies of the Registration
Statement, including all exhibits thereto, may be inspected without charge at
the Commission's principal office in Washington, D.C., and copies of all or any
part thereof may be obtained from such office after payment of fees prescribed
by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
333-45087) pursuant to the Exchange Act, are incorporated in this Prospectus by
reference: (i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, filed pursuant to Section 13 of the Exchange Act; (ii)
the Company's Current Reports on Form 8-K filed on January 28, 1998 and May 22,
1998, filed pursuant to Section 13 of the Exchange Act; (iii) the Company's
Definitive Proxy Statement dated May 8, 1998, filed in connection with the
Company's 1998 Annual Meeting of Shareholders to be held on June 19, 1998, filed
pursuant to Section 14 of the Exchange Act; (iv) the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1998, filed pursuant to Section 13
of the Exchange Act; and (v) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A filed on June 5,
1996 pursuant to Section 12 of the Exchange Act, including any amendment or
report updating such description.
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All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such document (all such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, including any beneficial owner, upon the written or
oral request of such person, a copy of any or all of the Incorporated Documents,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference therein. Requests for such copies should be directed
to Infoseek Corporation, 1399 Moffett Park Drive, Sunnyvale, California 94089,
Attention: Andrew E. Newton, Vice President and General Counsel (telephone:
(408) 543-6000). The information relating to the Company contained in this
Prospectus does not purport to be comprehensive and should be read together with
the information contained in the Incorporated Documents.
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Ultraseek(TM) and Ultramatch(TM) are among the trademarks of the Company and
Infoseek(R) and the Infoseek logo are among the registered trademarks of the
Company. This Prospectus also refers to trademarks held by other corporations.
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THE COMPANY
Infoseek provides leading Internet search and navigation technology, products
and services that use the Web to connect its viewers' personal, work and
community lives. As a "connected" media company, Infoseek is able to segment
viewers by interest area, providing advertisers with focused and targeted
audiences. The Infoseek Service is a comprehensive Internet gateway that
combines search and navigation with directories of relevant information sources
and content sites, offers chat and instant messaging for communicating shared
interests and facilitates the purchase of related goods and services.
Infoseek's revenues, principally consisting of advertising revenues, increased
132% to $35.0 million during 1997 over 1996, and increased 14% to $14.5 million
during the first quarter of 1998 as compared to the fourth quarter of 1997.
Average daily page views served from the Infoseek Service increased by 180% to
16.3 million in the first quarter of 1998 compared to the first quarter of 1997
and increased by 31% as compared to the fourth quarter of 1997. The Company
believes that by building brand awareness with consumers, it will be able to
attract more viewers directly to the Infoseek Service. In addition, the Company
acquires viewers through agreements with Netscape and other high traffic Web
sites. The percentage of page views delivered to viewers that originated from
Netscape declined to 26% in March 1998 from 41% in March 1997.
In response to rapid growth and change in the Internet search and navigation
market, the Company's Board of Directors, in the second quarter of 1997, hired a
new Chief Executive Officer, Harry Motro, to help evolve the strategic vision of
the Company while continuing to leverage the Company's core strength in search
and navigation. Mr. Motro and Founder Steven Kirsch recruited a number of new
members to the executive management team to execute on the Company's strategy of
building Infoseek brand awareness; creating a richer viewer experience;
maximizing value for the Company's advertisers; providing intranet search
products; and enhancing Infoseek's search and navigation service.
During the fourth quarter of 1997 and the first quarter of 1998, the Company
released a new version of the Infoseek Service which currently features 16
"channels" designed to bring together topical information, services, products
and communications on the Web. The new Infoseek Service provides additional
opportunities for revenue from the sale of channel sponsorships as well as
provides an opportunity for the Company to share in a portion of the revenue
facilitated by its viewers with these channel sponsors. Beginning with the
launch of the Company's channels, the Company began to sell sponsorships to
advertisers, sponsors and partners for specific channels and product categories.
In the fourth quarter of 1997 and the first quarter of 1998, the Company entered
into eight sponsorship and partnership agreements relating to five of the
Company's 16 channels. The Company believes there is significant potential to
increase sponsorship revenues through the eleven unsponsored channels, further
segmentation of existing channels into sub-channels as well as channels to be
introduced in the future.
In order to leverage its strength in search and navigation and to diversify
its revenue base, the Company began to license its Ultraseek Server product to
corporate customers for use on their intranets and public Web sites beginning in
early 1997. During 1997 and the first quarter of 1998, the Company derived
approximately 6% and 12%, respectively, of total revenues from sales of its
Ultraseek Server product. The Company believes that as the amount of content
hosted in online corporate environments continues to grow, the factors that have
contributed to the popularity of the Internet navigation and search services
will drive the demand for similar technologies within corporate intranets and
public Web sites.
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RISK FACTORS
In evaluating the Company's business, prospective investors should
carefully consider the following risk factors in addition to the other
information set forth herein or incorporated herein by reference. Statements in
this "Risk Factor" section regarding expectations or future events and certain
sections of the Incorporated Documents (identified with more particularity in
such Incorporated Documents) may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All forward-looking
statements included in this document are based on information available to the
Company on the date hereof, and the Company assumes no obligation to update any
such forward-looking statements. Actual results could differ materially from
those projected in the forward-looking statements as a result of the factors set
forth below and elsewhere in this document and in the Incorporated Documents.
LIMITED OPERATING HISTORY; HISTORICAL LOSSES; ANTICIPATION OF CONTINUED LOSSES
The Company's limited operating history makes it difficult to manage
operations and predict future operating results. The Company has incurred
significant net losses since inception and expects to continue to incur
significant losses on a quarterly and annual basis in 1998 and may do so in
subsequent fiscal periods. As of March 31, 1998, the Company had an accumulated
deficit of $48,030,000. The Company and its prospects must be considered in
light of the risks, costs and difficulties frequently encountered by companies
in their early stage of development, particularly companies in the new and
rapidly evolving Internet market. There can be no assurance that the Company
will be able to address any of these challenges. Although the Company has
experienced significant revenue growth in 1997, there can be no assurance that
this growth rate will be sustained or that revenues will continue to grow or
that the Company will achieve profitability. In 1997 and the first quarter of
1998, the Company significantly increased its operating expenses as a result of
a substantial increase in its sales and marketing efforts, development of new
distribution channels, expansion of its customer support capabilities and to
fund greater levels of research and development. Further increases in operating
expenses are planned during fiscal 1998. To the extent that any such expenses
are not timely followed by increased revenues, the Company's business, results
of operations, financial condition and prospects would be materially adversely
affected.
RELATIONSHIP WITH NETSCAPE
Since March 1995, the Company has been a featured provider of navigational
services on the Web page of Netscape Communications Corporation ("Netscape").
In 1996 and 1997 and during the first quarter of 1998, approximately 65%, 36%
and 26%, respectively, of all page views served on the Infoseek Service came
from traffic attributable to the Netscape Web page. Recently, Netscape has
announced that they have signed a two-year strategic partnership with Excite to
build out content based channels jointly for Netscape's Web site and to create
co-branded search, thereby competing directly with the Company. Under terms of
this agreement, Netscape and Excite will each serve as a premier provider, with
each receiving 25 percent of the net search rotation--the percentage of pages
served to visitors who have not selected a preferred provider. The remaining
50 percent of premier provider rotations has been allocated and sold among the
remaining navigational service providers (the allocated percent rotation of
premier provider rotations, which will be shared by other navigational service
providers, decreases to 25 percent in 1999). In May 1998, the Company entered
into a new agreement with Netscape which provides for the Company to pay a
minimum of $4,000,000 and up to $12,500,000 in cash to be a non-exclusive
premier provider of navigational services for the period from June 1, 1998
through May 31, 1999. Under the terms of the new agreement, the Company will
receive 15 percent of the premier provider rotations rather than the 35
percent of the premier provider rotations that the Company had been receiving
under its prior agreement with Netscape which will result, at least in the
short term, and could result, in the long term, in a reduction in traffic to
the Company's Web site and may result in lower than anticipated revenue.
Although the Company currently intends to renew the agreement when it expires
in May 1999, there can be no assurance that Netscape will be willing to renew
the agreement with the Company on commercially equivalent terms or on other
terms that may be satisfactory to the Company, if at all. The failure to renew
the Netscape agreement on commercially equivalent terms, if at all, would
result, at least in the short term, and could result, in the a long-term, in a
material reduction in traffic to the Infoseek Web site. This could, in turn,
result in advertisers on the Company's Web sites, including channel sponsors
and partners, terminating their contracts with the Company as such contracts
are typically of short duration and terminable on relatively short notice, or
reducing the number of impressions purchased. Furthermore, the Company's
contracts with advertisers and sponsors generally guarantee a minimum number
of page views, and a failure to achieve the minimum page views could result
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in a reduction in payments to the Company or compel the Company to provide "make
good" impressions if such minimums are not met. If the Company is unable to
develop viable alternative distribution channels to Netscape or is otherwise
unable to offset a reduction in traffic, advertising revenues would be
substantially adversely affected, resulting in the Company's business, results
of operations, financial condition and prospects being materially and adversely
affected.
POTENTIAL FLUCTUATIONS IN FUTURE RESULTS
As a result of the Company's limited operating history as well as the
recent emergence of both the Internet and intranet markets addressed by the
Company, the Company has neither internal nor industry-based historical
financial data for any significant period of time upon which to project revenues
or base planned operating expenses. The Company expects that its results of
operations may also fluctuate significantly in the future as a result of a
variety of factors, including: the continued rate of growth, usage and
acceptance of the Internet and intranets as information media; the rate of
acceptance of the Internet as an advertising medium and a channel of commerce;
demand for the Company's products and services; the advertising budgeting cycles
of individual advertisers; the introduction and acceptance of new, enhanced or
alternative products or services by the Company or by its competitors; the
Company's ability to anticipate and effectively adapt to a developing market and
to rapidly changing technologies; the Company's ability to attract, retain and
motivate qualified personnel; initiation, implementation, renewal or expiration
of significant contracts with Bell Atlantic Electronic Commerce Services, Inc.
("Bell Atlantic"), Borders Online, Inc. ("Borders OnLine"), Microsoft
Corporation ("Microsoft"), Netscape and others; pricing changes by the Company
or its competitors; specific economic conditions in the Internet and intranet
markets; general economic conditions; and other factors. Substantially all of
the Company's revenues have been generated from the sale of advertising, and the
Company expects to continue to derive substantially all of its revenues from
selling advertising and related products for the foreseeable future. Moreover,
most of the Company's contracts with advertising customers have terms of three
months or less. Advertising revenues are tightly related to the amount of
traffic on the Company's Web site, which is inherently unpredictable.
Accordingly, future sales and operating results are difficult to forecast. The
Company's expense levels are based, in part, on its expectations as to future
revenues and, to a significant extent, are not expected to decrease, at least in
the short term. The Company may not be able to adjust spending in a timely
manner to compensate for any future revenue shortfall. Accordingly, any
significant shortfall in relation to the Company's expectations would have an
immediate material adverse impact on the Company's business, results of
operations, financial condition and prospects.
In addition, the Company may elect from time to time to make certain
pricing, service or marketing decisions or acquisitions that could have a short-
term material adverse effect on the Company's business, results of operations,
financial condition and prospects and which may not generate the long-term
benefits intended. From time to time, the Company has entered into and may
continue to enter into strategic relationships with companies for cross service
advertising, such as the Company's relationships with Bell Atlantic and United
Parcel Service of America, Inc. ("UPS"). The Company's revenues have in the
past been, and may in the future continue to be, partially dependent on its
relationship with its strategic partners. Such strategic relationships have and
may continue to include substantial one-time or up front payments from the
Company's partners. Accordingly, the Company believes that its quarterly
revenues are likely to vary significantly in the future, that period-to-period
comparisons are not necessarily meaningful and that such comparisons should not
necessarily be relied upon as an indication of the Company's future performance.
Due to the foregoing factors, it is likely that in future periods, the Company's
operating results may be below the expectations of public market analysts and
investors. In such event, the price of the Company's Common Stock would likely
be materially adversely affected.
DEVELOPING MARKET; UNPROVEN ACCEPTANCE OF INTERNET ADVERTISING AND OF THE
COMPANY'S PRODUCTS AND SERVICES
The Company's future success is highly dependent upon the increased use of
the Internet and intranets for information publication, distribution and
commerce. The market for the Company's products and services has only recently
begun to develop, is rapidly evolving and is characterized by an increasing
number of market entrants with products and services for use on the Internet and
intranets. In particular, because the Company expects to derive substantially
all of its revenues in the foreseeable future from sales of Internet
advertising, the future success of the Company is highly dependent on the
development of the Internet as an advertising medium. If the market fails to
continue to develop, develops more slowly than expected or becomes saturated
with competitors, or if the Company's products and services do not achieve or
sustain
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acceptance by Internet users or advertisers, the Company's business, results of
operations, financial condition and prospects would be materially adversely
affected.
RISKS ASSOCIATED WITH BRAND DEVELOPMENT
The Company believes that establishing and maintaining the Infoseek brand
is a critical aspect of its efforts to attract and expand its audience and that
the importance of brand recognition will increase due to the growing number of
Internet sites and the relatively low barriers to entry. Promotion and
enhancement of the Infoseek brand will depend largely on the Company's success
in providing high-quality products and services and in designing and
implementing effective media promotions, which success cannot be assured. In
order to attract and retain Internet users and to promote and maintain the
Infoseek brand in response to competitive pressures, the Company believes it is
necessary to increase substantially its financial commitment to creating and
maintaining a distinct brand loyalty among consumers. If the Company is unable
to provide high- quality products and services, design and implement effective
media promotions or otherwise fails to promote and maintain its brand, or if the
Company incurs excessive expenses in an attempt to improve its products and
services or promote and maintain its brand, the Company's business, results of
operations, financial condition and prospects would be materially and adversely
affected.
INTENSE COMPETITION
The market for Internet and intranet products and services is highly
competitive, and the Company expects that competition will continue to
intensify. The market for Internet and intranet search and navigational
services has only recently begun to develop, and the Company cannot predict with
any certainty how competition will affect the Company, its competitors or its
customers. There can be no assurance that the Company will be able to compete
successfully or that the competitive pressures faced by the Company, including
those listed below, will not have a material adverse effect on the Company's
business, results of operations, financial condition and prospects. The Company
believes it faces numerous competitive risks, including the following:
Competition from consolidated internet products. A number of companies
offering Internet products and services, including direct competitors of the
Company, recently have begun to integrate multiple features within the products
and services they offer to consumers. Integration of Internet products and
services is occurring through development of competing products and through
acquisitions of, or entering into joint ventures and/or licensing arrangements
involving, competitors of the Company. For example, Netscape has recently
announced that they have signed a two-year strategic partnership with Excite to
build out content based channels jointly for Netscape's Web site and to create
co-branded search, thereby competing directly with the Company. The Web browser
offered by Microsoft, another widely-used browser and substantial source of
traffic for the Company, may incorporate and promote information search and
retrieval capabilities in future releases or upgrades that could make it more
difficult for Internet viewers to find and use the Company's products and
services. Microsoft recently licensed products and services from Inktomi
Corporation ("Inktomi"), a direct competitor of the Company, and has announced
that it will feature and promote Inktomi services in the Microsoft Network and
other Microsoft online properties. The Company expects that such search
services may be tightly integrated into the Microsoft operating system, the
Internet Explorer browser and other software applications, and that Microsoft
will promote such services within the Microsoft Network or through other
Microsoft- affiliated end-user services such as MSNBC or WebTV Networks, Inc.
("WebTV"). In addition, entities that sponsor or maintain high-traffic Web
sites or that provide an initial point of entry for Internet viewers, such as
the Regional Bell Operating Companies ("RBOCs") or Internet Service Providers
("ISPs") such as Microsoft and America Online, Inc. ("AOL"), currently offer and
can be expected to consider further development, acquisition or licensing of
Internet search and navigation functions competitive with those offered by the
Company, or could take actions that make it more difficult for viewers to find
and use the Company's products and services. For example, AOL is currently a
significant shareholder of Excite and offers Excite's WebCrawler and NetFind as
the exclusive Internet search and retrieval services for use by AOL's
subscribers. Continued or increased competition from such consolidations,
integration and strategic relationships involving competitors of the Company
could have a material adverse effect on the Company's business, results of
operations, financial condition and prospects.
Competition from existing search and navigational competitors. Many
companies currently offer directly competitive products or services addressing
Web search and navigation, including Digital Equipment Corporation (AltaVista)
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("DEC/AltaVista"), Excite, Hot Wired Ventures LLC (HotBot) ("HotBot"), Inktomi,
Lycos, CNET (Snap! Online) ("CNET") and Yahoo! In addition, the Company's
Ultraseek Server product competes directly with intranet products and services
offered by companies such as DEC/AltaVista, Lycos, Open Text Corporation (Open
Text Index) ("Open Text") and Verity, Inc. ("Verity"). The Web browsers
currently offered by Netscape and Microsoft, which are the two most widely-used
browsers, incorporate prominent search buttons and similar features, such as
features based on "push" technologies, that direct search traffic to competing
services, including those that may be developed or licensed by Microsoft or
Netscape in enhancements or later versions of these or other products. Many of
the Company's existing competitors, as well as a number of potential new
competitors, have significantly greater financial, technical, marketing and
distribution resources than the Company.
Competition from Internet and other advertising media. The Company also
competes with online services, other Web site operators and advertising
networks, as well as traditional media such as television, radio and print for a
share of advertisers' total advertising budgets. Additionally, a large number
of Web sites and online services (including, among others, the Microsoft
Network, MSNBC, AOL and other Web navigation companies such as Excite, Lycos and
Yahoo!) offer informational and community features, such as news, stock quotes,
sports coverage, yellow pages and e-mail listings, weather news, chat services
and bulletin board listings that are competitive with the services currently
offered or proposed to be offered by the Company. Moreover, the Company
believes that the number of companies selling Web-based advertising and the
available inventory of advertising space have recently increased substantially.
Accordingly, the Company may face increased pricing pressure for the sale of
advertisements and reductions in the Company's advertising revenues.
Low barriers to entry for new search and navigational companies. The
Company believes that the costs associated with developing technologies,
products and services that compete with those offered by the Company are
relatively low. As a result, as the market for Internet and intranet search and
navigational products develops, other companies may be expected to offer similar
products and services and directly and indirectly compete with the Company for
advertising revenues.
RELIANCE ON ADVERTISING REVENUES
The Company has derived a substantial majority of its revenues to date from
the sale of advertisements and expects to continue its dependence on advertising
and related products, including channel sponsorships and, to a lesser extent,
the sale of the Ultramatch advertising management system and the Ultraseek
Server intranet product. The Company's current business model of generating
revenues through the sale of advertising on the Internet, which is highly
dependent on the amount of traffic on the Company's Web site, is relatively
unproven. The Internet as an advertising medium has not been available for a
sufficient period of time to gauge its effectiveness as compared with
traditional advertising media. In addition, most of the Company's current
advertising customers have limited or no experience using the Internet as an
advertising medium, have not devoted a significant portion of their advertising
expenditures to such advertising and may not find such advertising to be
effective for promoting their products and services relative to advertising in
traditional media. There can be no assurance that current advertisers will
continue to purchase advertising space and services from the Company or that
sufficient impressions will be achieved or available, or that the Company will
be able to successfully attract additional advertisers. Furthermore, with the
rapid growth of available inventory on the Internet and the intense competition
among sellers of advertising space, it is difficult to project future levels of
advertising revenues and pricing models that will be adopted by the industry or
individual companies. In addition, the ability to quickly develop new business
models which will generate additional revenue sources may be vital for the
Company to remain competitive in its marketplace. Accordingly, there can be no
assurance that the Company will be successful in generating significant future
advertising revenues or other source of revenues; failure to do so could have a
material adverse effect on the Company's business, results of operations,
financial condition and prospects.
TECHNOLOGICAL CHANGE AND NEW PRODUCTS AND SERVICES
The market for Internet products and services is characterized by rapid
technological change, changing customer needs, frequent new product
introductions and evolving industry standards. These market characteristics are
exacerbated by the emerging nature of this market and the fact that many
companies are expected to introduce new Internet products and services in the
near future. The Company's future success will depend on its ability to
continually and, on a timely basis,
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introduce new products, services and technologies and to continue to improve the
performance, features and reliability of the Company's products and services in
response to both evolving demands of the marketplace and competitive product
offerings.
During the fourth quarter of 1997 and the first quarter of 1998, the
Company released a new version of its service which currently features 16
"channels," designed to bring together topical information, services, products
and communities on the Web. The new service provides additional opportunities
for revenue from the sale of channel sponsorships as well as provides an
opportunity for the Company to share in a portion of the revenue facilitated by
its viewers with these channel sponsors. Continued market acceptance of this
new version and successful conclusion of sponsorship arrangements are integral
to the Company's competitiveness and viability. Most of the Company's
additional channel sponsorship and partnership arrangements are dependent on an
increasing level of viewer traffic. If the Company is unable to renew its
relationship with Netscape on commercially equivalent terms, if at all, or if
viewer traffic is otherwise materially adversely affected, the Company may be
unable to retain its channel sponsorship and partnership arrangements. In
addition, there can be no assurance that this new sponsorship service or any
other new or proposed product or service will attain market acceptance,
experience technological sustainability or be free of errors that require
significant design modifications or that the business model to generate revenues
will be successful. Failure of the Company to successfully design, develop,
test, market and introduce other new and enhanced technologies and services, or
any enhancements of the Company's current search technology, or the failure of
the Company's recently introduced products and services to achieve market
acceptance could have a material adverse effect upon the Company's business,
results of operations, financial condition and prospects. Due to rapid
technological change, changing customer needs, frequent new product and service
introductions and evolving industry standards, timeliness of introduction of
these new products and services is critical. Delays in the introduction of new
products and services may result in customer dissatisfaction and may delay or
cause a loss of advertising revenue. There can be no assurance that the Company
will be successful in developing new products or services or improving existing
products and services that respond to technological changes or evolving industry
standards, that the Company will not experience difficulties that could delay or
prevent the successful development, introduction and marketing of new or
improved products and services, or that its new products and services will
adequately meet the requirements of the marketplace and achieve market
acceptance. If the Company is unable to develop and introduce new or improved
products or services in a timely manner in response to changing market
conditions or customer requirements, the Company's business, results of
operations, financial condition and prospects could be materially adversely
affected.
MANAGEMENT OF GROWTH
The Company has recently experienced and may continue to experience rapid
growth, which has placed, and could continue to place, a significant strain on
the Company's limited personnel and other resources. Competition for
engineering, sales and marketing personnel is intense, and there can be no
assurance that the Company will be successful in attracting and retaining such
personnel or that the Company will be able to manage such growth effectively.
To succeed, the Company will need to continue to implement and improve its
operational, financial and management information systems and to hire, train,
motivate and manage its employees. In particular, the Company has experienced
difficulty in hiring and retaining the personnel necessary to support the growth
of the Company's business. The failure of the Company to successfully manage
any of these issues would have a material adverse effect on the Company's
business, results of operations, financial condition and prospects. The
Company's ability to manage its growth will require a significant investment in
and upgrade to its existing internal management information systems to support
increased accounting and other management related functions, and a new
advertising inventory management analysis system to provide enhanced internal
reporting and customer feedback on advertising. These system upgrades and
replacements will impact almost all phases of the Company's operations (i.e.
planning, advertising implementation and management, finance and accounting).
These systems are currently scheduled to become operational by the second half
of 1998. There can be no assurance that the Company will not experience
problems, delays or unanticipated additional costs in implementing these systems
or in the use of its existing system that could have a material adverse effect
on the Company's business, results of operations, financial condition and
prospects, particularly in the period or periods in which these systems are
brought online.
RISKS OF THE COMPANY'S ACQUISITION STRATEGY
The Company believes that it may be necessary to enter into joint ventures
or other strategic relationships or make acquisitions of complementary products,
technologies or businesses in order to remain competitive. The failure of the
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Company to execute such a strategy may lead to decreased market share, viewer
traffic or brand loyalty, which may have a material adverse effect on the
Company's business, results of operations, financial condition and prospects.
In addition, acquisition transactions are accompanied by a number of risks,
including, among other things, the difficulty of integrating the operations and
personnel of the acquired companies, the potential disruption of the Company's
ongoing business, the inability of management to maximize the financial and
strategic position of the Company through the successful incorporation of
acquired technology or content and rights into the Company's products and media
properties, expenses associated with the transactions, additional expenses
associated with amortization of acquired intangible assets, the maintenance of
uniform standards, controls, procedures and policies, the impairment of
relationships with employees and customers as a result of any integration of new
management personnel, and the potential unknown liabilities associated with
acquired businesses. There can be no assurance that the Company would be
successful in overcoming these risks or any other problems encountered in
connection with such acquisitions.
CAPACITY CONSTRAINTS AND SYSTEM FAILURE; ADVERTISING MANAGEMENT SYSTEM
A key element of the Company's strategy is to generate a high volume of
traffic to its products and services. Accordingly, the performance of the
Company's products and services is critical to the Company's reputation, its
ability to attract advertisers to the Company's Web sites and market acceptance
of these products and services. Any system failure that causes interruptions or
that increases response time of the Company's products and services would result
in less traffic to the Company's Web sites and, if sustained or repeated, would
reduce the attractiveness of the Company's products and services to advertisers
and customers. In addition, an increase in the volume of searches conducted
through the Company's products and services could strain the capacity of the
software, hardware or telecommunications lines deployed by the Company, which
could lead to slower response time or system failures. If traffic to the
Company's Web site continues to increase, there can be no assurance that the
Company's products, services and systems will be able to scale appropriately.
The Company is also dependent upon Web browser companies and Internet and online
service providers for access to its products and services, and viewers have
experienced and may in the future experience difficulties due to system or
software failures or incompatibilities not within the Company's control. The
Company is also dependent on hardware suppliers for prompt delivery,
installation and service of servers and other equipment and services used to
provide its products and services. Any disruption in the Internet access and
service provided by the Company or its service providers could have a material
adverse effect upon the Company's business, results of operations, financial
condition and prospects.
The process of managing advertising within large, high traffic Web sites
such as the Company's is an increasingly important and complex task. The
Company is in the process of evaluating the conversion from an internally
developed advertising inventory management analysis system to provide enhanced
internal reporting and customer feedback on advertising to a system being
developed by NetGravity. The Company currently anticipates that this new
advertising management system will be installed and become operational in the
second half of 1998. To the extent that the Company encounters material
difficulties in bringing, or is unable to bring, this new system online, the
Company will need to acquire an alternative solution from a third party vendor
or devote sufficient resources to enhance its current internally developed
system. Any extended failure of, or material difficulties encountered in
connection with, the Company's advertising management system may expose the
Company to "make good" obligations with its advertising customers, which, by
displacing advertising inventory among other consequences, would reduce revenue
and would have a material adverse effect on the Company's business, results of
operations, financial condition and prospects.
In addition, the Company's operation depends upon its ability to maintain
and protect its computer systems, all of which are located at the Company's
principal offices in Sunnyvale, California. This system is vulnerable to damage
from fire, floods, earthquakes, power loss, telecommunications failures, break-
ins and similar events. The Company does not currently have a disaster recovery
plan in effect and does not have redundant systems for its service at an
alternate site. Despite the implementation of network security measures by the
Company, its servers are also vulnerable to computer viruses, break-ins and
similar disruptive problems. Computer viruses, break-ins or other problems
caused by third parties could lead to interruptions, delays in or temporary
cessation of service to users of the Company's products and services. The
occurrence of any of these events would have a material adverse effect on the
Company's business, results of operations, financial condition and prospects.
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FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING
The Company currently anticipates that its cash, cash equivalents, short-
term investments, available funds under its equipment term loan facility and
cash flows generated from advertising revenues, will be sufficient to meet its
anticipated needs for working capital and other cash requirements through at
least March 31, 1999. Thereafter, the Company may need to raise additional
funds. The Company may need to raise additional funds sooner, however, in
order to fund more rapid expansion, to develop new or enhance existing services
or products, to respond to competitive pressures or to acquire complementary
products, businesses or technologies. If additional funds are raised through
the issuance of equity or convertible debt securities, the percentage ownership
of the shareholders of the Company will be reduced, shareholders may experience
additional dilution and such securities may have rights, preferences or
privileges senior to those of the holders of the Company's Common Stock. There
can be no assurance that additional financing will be available on terms
favorable to the Company, or at all. If adequate funds are not available or are
not available on acceptable terms, the Company's ability to fund its expansion,
take advantage of unanticipated acquisition opportunities, develop or enhance
services or products or respond to competitive pressures would be significantly
limited. Such limitation could have a material adverse effect on the Company's
business, results of operations, financial condition and prospects.
RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION
As part of its business strategy, the Company has begun to seek additional
opportunities to expand its products and services into international markets.
The Company believes that such expansion is important to the Company's ability
to continue to grow and to market its products and services. In marketing its
products and services internationally, however, the Company faces new
competitors. In addition, the Company's success in entering international
markets is dependent upon the Company's ability to create localized versions of
its products and services. There can be no assurance that the Company will be
successful in creating localized versions of its products and services or
marketing or distributing its products abroad or that, if the Company is
successful, its international revenues will be adequate to offset the expense of
establishing and maintaining international operations. To date, the Company has
limited experience in marketing and distributing its products and services
internationally. In addition to the uncertainty as to the Company's ability to
establish an international presence, there are certain difficulties and risks
inherent in doing business on an international level, such as compliance with
regulatory requirements and changes in these requirements, export restrictions,
export controls relating to technology, tariffs and other trade barriers,
protection of intellectual property rights, difficulties in staffing and
managing international operations, longer payment cycles, problems in collecting
accounts receivable, political instability, fluctuations in currency exchange
rates and potentially adverse tax consequences. There can be no assurance that
one or more of such factors would not have a material adverse effect on any
international operations established by the Company and, consequently, on the
Company's business, results of operations, financial condition and prospects.
DEPENDENCE ON KEY PERSONNEL; NEW MEMBERS OF THE EXECUTIVE MANAGEMENT TEAM
During 1997, the Company experienced significant changes to its executive
management team. Those who joined the executive management team in 1997 include
Harry Motro, President and Chief Executive Officer; Beth Haggerty, Vice
President of Worldwide Sales; Barak Berkowitz, Vice President of Marketing; and
Leslie Wright, Vice President Finance and Chief Financial Officer. There can be
no assurance that the new members of the Company's management team will work
effectively together with the rest of the Company's executive management. In
addition, the Company has recently hired, and plans to continue to hire, a
number of engineers to design and implement improvements to the integration of
content with its search engine technology, which the Company believes will be a
significant factor in its future ability to compete favorably with other
navigational services. The Company's future performance depends in significant
part upon the contributions of its senior management personnel, including its
Chairman Steven Kirsch, who is integrally involved in the Company's research and
development efforts. Although the Company provides incentives such as salary,
benefits and option grants (which are typically subject to vesting over four
years) to attract and retain qualified employees, the loss of services of any of
the Company's officers or other key employees would have a material adverse
effect on the Company's business, results of operations, financial condition and
prospects.
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VOLATILITY OF STOCK PRICE
The price of the Company's Common Stock has been and may continue to be
subject to wide fluctuations in response to a number of events and factors such
as quarterly variations in results of operations, announcements of new
technological innovations or new products and media properties by the Company or
its competitors, changes in financial estimates and recommendations by
securities analysts, the operating and stock price performance of other
companies that investors may deem comparable to the Company, and news relating
to trends in the Company's markets. In addition, the stock market in general,
and the market prices for Internet-related companies in particular, have
experienced extreme volatility that often has been unrelated to the operating
performance of such companies. These broad market and industry fluctuations may
adversely affect the price of the Company's Common Stock, regardless of the
Company's operating performance.
INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
The Company's success depends significantly upon its proprietary
technology. The Company currently relies on a combination of copyright and
trademark laws, trade secrets, confidentiality procedures and contractual
provisions to protect its proprietary rights. The Company seeks to protect its
software, documentation and other written materials under trade secret, patent
and copyright laws, which afford only limited protection. The Company holds one
patent and currently has 12 United States patent applications pending and five
foreign patent applications pending. There can be no assurance that the pending
applications will be approved, or that if issued, such patents will not be
challenged, and if such challenges are brought, that such patents will not be
invalidated. There can be no assurance that the Company will develop
proprietary products or technologies that are patentable, that any issued patent
will provide the Company with any competitive advantages or will not be
challenged by third parties, or that the patents of others will not have a
material adverse effect on the Company's ability to do business. The Company
has registered and applied for registration for certain service marks and
trademarks, and will continue to evaluate the registration of additional service
marks and trademarks, as appropriate. The Company generally enters into
confidentiality agreements with its employees and with its consultants and
customers. Litigation may be necessary to protect the Company's proprietary
technology. Any such litigation may be time-consuming and costly. Despite the
Company's efforts to protect its proprietary rights, unauthorized parties may
attempt to copy aspects of the Company's products or services or to obtain and
use information that the Company regards as proprietary. In addition, the laws
of some foreign countries do not protect proprietary rights to as great an
extent as do the laws of the United States. There can be no assurance that the
Company's means of protecting its proprietary rights will be adequate or that
the Company's competitors will not independently develop similar technology or
duplicate the Company's products or design around patents issued to the Company
or other intellectual property rights of the Company.
There have been substantial amounts of litigation in the computer industry
regarding intellectual property rights. There can be no assurance that third
parties will not in the future claim infringement by the Company with respect to
current or future products, trademarks or other proprietary rights, that the
Company will counterclaim against any such parties in such actions or that if
the Company makes claims against third parties with respect thereto, that any
such party will not counterclaim against the Company in such actions. Any such
claims or counterclaims could be time-consuming, result in costly litigation,
cause product release delays, require the Company to redesign its products or
require the Company to enter into royalty or licensing agreements, any of which
could have a material adverse effect upon the Company's business, results of
operations, financial condition and prospects. Such royalty or licensing
agreements, if required, may not be available on terms acceptable to the Company
or at all.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
The Company is not currently subject to direct regulation by any government
agency, other than regulations applicable to businesses, and there are currently
few laws or regulations directly applicable to access to or commerce on the
Internet. A number of legislative and regulatory proposals are under
consideration by federal, state and foreign governmental organizations, and it
is possible that a number of laws or regulations may be adopted with respect to
the Internet covering issues such as user privacy, pricing and characteristics
and quality of products and services. The adoption of any such laws or
regulations may decrease the growth of the Internet, which could in turn
decrease the demand for the Company's products, increase the Company's cost of
doing business, or otherwise have an adverse effect on the Company's business,
results of
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operations, financial condition and prospects. Moreover, the applicability to
the Internet of existing laws governing issues such as property ownership,
copyright, trade secret, libel and personal privacy is uncertain and developing.
Any such new legislation or regulation, or application or interpretation of
existing laws, could have a material adverse effect on the Company's business,
results of operations, financial condition and prospects.
Because materials may be downloaded by the online or Internet services
operated or facilitated by the Company and may be subsequently distributed to
others, there is a potential that claims will be made against the Company for
defamation, negligence, copyright or trademark infringement, personal injury or
other theories based on the nature, content, publication and distribution of
such materials. Such claims have been brought, and sometimes successfully
pressed, against online service providers in the past. In addition, the Company
could be exposed to liability with respect to the selection of listings that may
be accessible through content and materials that may appear in chat room,
instant messaging or other services offered by the Company. Such claims might
include, among others, that by providing hypertext links to Web sites operated
by third parties, the Company is liable for copyright or trademark infringement
or other wrongful actions by such third parties through such Web sites. It is
also possible that if any information provided through the Company's services,
such as stock quotes, analyst estimates or other trading information, contains
errors, third parties could make claims against the Company for losses incurred
in reliance on such information. The Company expects to offer Web-based e-mail
services in the near future, which may expose the Company to potential risks,
such as liabilities or claims resulting from unsolicited e-mail (spamming), lost
or misdirected messages, illegal or fraudulent use of e-mail, harassment or
interruptions or delays in e-mail service.
From time to time, the Company enters into agreements with sponsors,
content providers, service providers and merchants under which the Company is
entitled to receive a share of revenue from the purchase of goods and services
by users of the Company's online properties. Such arrangements may expose the
Company to additional legal risks and uncertainties, including (without
limitation) potential liabilities to consumers of such products and services.
Although the Company carries general liability insurance, the Company's
insurance may not cover potential claims of this type or may not be adequate to
indemnify the Company for all liability that may be imposed.
YEAR 2000 COMPLIANCE
The Company is aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches. The "year 2000 problem"
is pervasive and complex as virtually every computer operation will be affected
in some way by the rollover of the two digit year value to 00. The issue is
whether computer systems will properly recognize date sensitive information when
the year changes to 2000. Systems that do not properly recognize such
information could generate erroneous data or cause a system to fail. Management
is in the process of working with its software vendors to assure that the
Company is prepared for the year 2000. Management does not anticipate that the
Company will incur significant operating expenses or be required to invest
heavily in computer systems improvements to be year 2000 compliant. However,
significant uncertainty exists concerning the potential costs and effects
associated with any year 2000 compliance. The Company is currently implementing
an upgrade to its management information system that the Company believes is
year 2000 compliant. Any year 2000 compliance problem of either the Company or
its viewers, Ultraseek Server customers or advertisers could materially
adversely affect the Company's business, results of operations, financial
condition and prospects.
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SELLING SHAREHOLDERS
The shares of Common Stock to be sold by the Selling Shareholders pursuant to
this Prospectus are shares issued to the Selling Shareholders by the Company in
connection with the acquisition of WebChat Communications, Inc. (the
"Acquisition"). The following table sets forth the aggregate number of shares
of Common Stock held by each Selling Shareholder and the aggregate number of
shares of Common Stock offered by each Selling Shareholder hereunder. No
Selling Shareholder holds more than 1% of the Company's outstanding Common
Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME OF SELLING SHAREHOLDER OWNED PRIOR TO OFFERING NUMBER OF SHARES OFFERED
<S> <C> <C>
Andy Bernstein 194 194
Ewald Detjens 17,702 17,702
Michael Edelhart 2,145 2,145
Michael J. Fremont 54,973 54,973
Lisa Moorman Fremont 1,716 1,716
Kevin Hall 1,224 1,224
Michael Hall 401(k) Retirement Savings 2,948 2,948
Plan Trust
Gary Hromadko 45,881 45,881
Randy Komisar 7,583 7,583
Robert Lash 14,280 14,280
Wendie Bernstein Lash 19,775 19,775
Leslie Latham 809 809
Norwest Venture Partners VI, L.P. 91,170 91,170
Lee Pearson 15 15
Peter Rip 15,767 15,767
Janet Ryan 3,192 3,192
Scott Shanks 3,888 3,888
Charles H. Silvers 358 358
Susan Wiese-Slater 1,401 1,401
Bayard Winthrop 16,970 16,970
Jerrold F. Petruzzelli, Trustee
Michael Victor Petruzzelli Trust 1,287 1,287
Jerrold F. Petruzzelli 12,735 12,735
VLG Investments 1996 2,662 2,662
Silicon Valley Bank 49 49
Total 318,724 318,724
</TABLE>
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PLAN OF DISTRIBUTION
The Company has been advised by the Selling Shareholders that they or their
pledgees, donees, transferees or other successors in interest intend to sell all
or a portion of the shares offered hereby from time to time in the over-the-
counter market and that sales will be made at prices prevailing at the times of
such sales. Such persons may also make private sales directly or through a
broker or brokers, who may act as agent or as principal. In connection with any
sales, the Selling Shareholders and any brokers or dealers participating in such
sales may be deemed to be underwriters within the meaning of the Securities Act.
The Company will receive no part of the proceeds of sales made hereunder.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Shareholders and/or purchasers of the shares
offered hereby (and, if it acts as agent for the purchaser of such shares, from
such purchaser). Usual and customary brokerage fees will be paid by the Selling
Shareholders. Broker-dealers may agree with the Selling Shareholders to sell a
specified number of shares at a stipulated price per share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the Selling
Shareholders, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the Selling Shareholders. Broker-
dealers who acquire shares as principal may thereafter resell such shares from
time to time in transactions (which may involve cross and block transactions and
which may involve sales to and through other broker-dealers, including
transactions of the nature described above) in the over-the-counter market, in
negotiated transactions or otherwise at market prices prevailing at the time of
sale or at negotiated prices, and in connection with such resales may pay to or
receive from the purchasers of such shares commissions computed as described
above.
The Company has advised the Selling Shareholders that Regulation M promulgated
under the Exchange Act, may apply to their sales in the market, has furnished
the Selling Shareholders with a copy of this regulation and has informed them of
the need for delivery of copies of this Prospectus. The Selling Shareholders
may indemnify any broker-dealer that participates in transactions involving the
sale of the shares against certain liabilities, including liabilities arising
under the Securities Act. Any commissions paid or any discounts or concessions
allowed to any such broker-dealers, and any profits received on the resale of
such shares, may be deemed to be underwriting discounts and commissions under
the Securities Act if any such broker-dealers purchase shares as principal. The
Company has agreed to indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act.
Any securities covered by this Prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under that Rule rather than
pursuant to this Prospectus.
There can be no assurance that the Selling Shareholders will sell any or all
of the shares of Common Stock offered by them hereunder.
LEGAL MATTERS
The validity of the Company Common Stock issuable pursuant to the Acquisition
and certain other legal matters related to the Acquisition was passed upon for
the Company by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo
Alto, California.
EXPERTS
The financial statements of Infoseek Corporation appearing in Infoseek
Corporation's Annual Report (Form 10-K) for the year ended December 31, 1997,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference.
Such financial statements are incorporated by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The supplemental consolidated financial statements of Infoseek Corporation
appearing in Infoseek Corporation's Current Report on Form 8-K dated May 22,
1998, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such supplemental consolidated financial
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statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
AVAILABLE INFORMATION................................................... 2
ADDITIONAL INFORMATION.................................................. 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................... 2
THE COMPANY............................................................. 4
RISK FACTORS............................................................ 5
SELLING SHAREHOLDERS.................................................... 14
PLAN OF DISTRIBUTION.................................................... 15
LEGAL MATTERS........................................................... 15
EXPERTS................................................................. 15
</TABLE>
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