Unassociated Document
As
filed with the Securities and Exchange Commission on July 6, 2010
Registration
Number
333- ____________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM S-3
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
interCLICK, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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01-0692341
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(State
or other jurisdiction
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(I.R.S.
Employer)
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of
incorporation or organization)
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Identification
No.)
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11West
19th
Street, 10th
Floor
New
York, NY 10011
(646)
722-6260
(Address,
including zip code, and telephone number, including area code
of
registrant’s principal executive offices)
Michael
Mathews
Chief
Executive Officer
11West
19th
Street, 10th
Floor
New
York, NY 10011
(646)
722-6260
(Name,
address, including zip code, and telephone number, including area code of agent
for service)
Copies
to:
Harvey J.
Kesner, Esq.
Benjamin
S. Reichel, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32nd
Floor
New York,
New York 10006
(212)
930-9700
Approximate
date of commencement of proposed sale to the public: From time to time after the
effective date of this Registration Statement.
If the
only securities being registered on this form are to be offered pursuant to
dividend or interest reinvestment plans, please check the following
box. o
If any of
the securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box. x
If this
form is filed to register additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. o
If this
form is a post-effective amendment filed pursuant to Rule 462(c) 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. o
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing
with the Commission pursuant to Rule 462(e) under the Securities Act,
check the following box. o
If this
Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes pursuant to Rule 413(b) under the Securities Act,
check the following box. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company. See definitions of
large accelerated filer,” “accelerated filer,” and “smaller reporting company,”
in Rule 12b-2 of the Exchange Act. (Check one.)
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting company x
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(Do
not check if a smaller reporting company)
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CALCULATION OF REGISTRATION
FEE
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Title of Class of
Securities to be
Registered
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Amount To
be Registered
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Proposed
Maximum
Aggregate
Price
Per Share (1)
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Proposed
Maximum
Aggregate
Offering
Price
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Amount of
Registration
Fee
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Common
Stock, par value $0.001 per share (2)
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3,060,750 shares
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$3.75
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$11,477,812.50
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$818.37
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(1) Estimated
solely for purposes of calculating the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933, as amended, using the
average of the high and low prices as reported on The NASDAQ Capital Market on
June 29, 2010, which was $3.75 per share.
(2) Represents
shares of common stock offered by the selling
stockholders.
The
registrant hereby amends this registration statement on such date or
date(s) 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 commission
acting pursuant to said Section 8(a) may determine.
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 it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED JULY 6, 2010
PRELIMINARY
PROSPECTUS
3,060,750 Shares
interCLICK,
Inc.
The selling stockholders named in this
prospectus are offering to sell up to 3,060,750 shares of our common stock.
They may sell all or a portion of these
shares from time to time in market transactions through any market on which our
common stock is then traded, in negotiated transactions or otherwise, and at
prices and on terms that will be determined by the then prevailing market price
or at negotiated prices directly or through a broker, who may act as agent or as
principal, or by a combination of such methods of sale. For
additional information on the methods of sale, you should refer to the section
entitled “Plan of Distribution.”
The
selling stockholders will receive all of the proceeds from the sale of these
shares of common stock. We will not receive any of these
proceeds.
Our
common stock is listed on The NASDAQ Capital Market under the symbol
“ICLK”. On June 29, 2010, the last reported sale price for our common
stock was $3.67 per share.
The
securities offered in this prospectus involve a high degree of risk. See “Risk
Factors” beginning on page 2 of this prospectus to read about factors you
should consider before buying shares of our common stock.
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 _________, 2010
TABLE
OF CONTENTS
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Page
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Prospectus
Summary
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1
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Risk
Factors
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2
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Note
Regarding Forward-Looking Statements
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9
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Use
of Proceeds
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10
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Selling
Stockholders
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11
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Plan
of Distribution
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12
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Legal
Matters
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13
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Experts
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13
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Incorporation
of Documents By Reference
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13
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Where
You Can Find More Information
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14
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You
should rely only on the information contained in this prospectus or incorporated
by reference in this prospectus. We have not, and the selling stockholders have
not, authorized anyone to provide you with different information. No one is
making offers to sell or seeking offers to buy our common stock in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information contained in this prospectus is accurate only as of the date on
the front of this prospectus and that any information incorporated by reference
is accurate only as of the date given in the document incorporated by reference,
regardless of the time of delivery of this prospectus or any sale of our common
stock. Our business, financial condition, results of operations and prospects
may have changed since that date.
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere or incorporated by reference
in this prospectus. Because it is a summary, it does not contain all of the
information you should consider before investing in our common stock. You should
read this entire prospectus carefully, including the section entitled “Risk
Factors” and the documents that we incorporate by reference into this
prospectus, before making an investment.
Unless
otherwise specified or required by context, references in this prospectus to
“we”, “us,” “our” and “interCLICK” refer to interCLICK, Inc. and our
subsidiaries and predecessors on a consolidated basis.
interCLICK,
Inc.
interCLICK
provides a transparent platform enabling digital advertisers and agencies to
maximize return on investment (“ROI”) at unprecedented scale. Our platform
applies traditional supply chain methodologies leveraging premium publisher
inventory and third party data sources to maximize the effectiveness along the
online advertising value chain.
interCLICK
is a next-generation online ad network that combines complete data and inventory
transparency with best in breed targeting solutions. Our premier technology
platform increases campaign effectiveness and ROI by delivering highly targeted
ads to the most relevant audiences with unprecedented scalability. Our platform
was built to leverage leading data providers and targeting technology to deliver
the most efficient campaigns at the greatest scale for advertisers.
We were
originally incorporated in Delaware in March 2002 and in August 2007 acquired
the business of Desktop Interactive, Inc. In June 2008, we changed our name to
interCLICK, Inc. Our principal offices are located at 11 West 19th Street,
New York, NY 10011. Our telephone number is (646) 722-6260. Our website is www.interCLICK.com.
The information contained on our website is not part of this prospectus and
should not be relied upon in connection with investing in our common
stock.
The
Offering
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Common
Stock Offered by the Selling Stockholders
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3,060,750
shares
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Common
Stock Outstanding Prior to this Offering
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23,798,585
shares (1)
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Common
Stock Outstanding After this Offering
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23,798,585
shares (1)
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Use
of Proceeds
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The
selling stockholders will receive all of the proceeds from the sale of the
shares of common stock. We will not receive any of these
proceeds.
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Risk
Factors
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See
“Risk Factors” beginning on page 2 for a discussion of factors that
you should consider before investing in our common
stock.
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NASDAQ
Capital Market Symbol
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“ICLK”
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(1)
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Based upon the number of shares
outstanding as of June 30, 2010. Unless we specifically state
otherwise, the share information in this
prospectus: (i) excludes 5,395,459 shares of common stock
reserved for issuance upon exercise of stock options granted under our
equity incentive plans; and (ii) excludes 1,254,309 shares of common
stock reserved for issuance upon exercise of outstanding
warrants.
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RISK
FACTORS
An
investment in our shares involves a high degree of risk. Before making an
investment decision, you should carefully consider all of the risks described in
this prospectus. If any of the risks discussed in this prospectus actually
occur, our business, financial condition and results of operations could be
materially and adversely affected. If this were to happen, the trading price of
our common stock could decline and you might lose all or a part of your
investment.
Risks
Related to the Company
Because
we have a limited operating history to evaluate our company, the likelihood of
our success must be considered in light of the problems, expenses, difficulties,
complications and delay frequently encountered by an early-stage
company.
Since we
have a limited operating history it will make it difficult for investors and
securities analysts to evaluate our business and prospects. You must
consider our prospects in light of the risks, expenses and difficulties we face
as an early stage company with a limited operating history. Investors
should evaluate an investment in our company in light of the uncertainties
encountered by early-stage companies in an intensely competitive
industry. There can be no assurance that our efforts will be
successful or that we will be able to maintain profitability.
If
we cannot manage our growth effectively, we may not maintain
profitability.
Businesses
which grow rapidly often have difficulty managing their growth. If
our business continues to grow as rapidly as we have since August 2007 and as we
anticipate, we will need to expand our management by recruiting and employing
experienced executives and key employees capable of providing the necessary
support.
We cannot
assure you that our management will be able to manage our growth effectively or
successfully. Our failure to meet these challenges could cause us to
lose money, which will reduce our stock price.
Because
of the severity of the global economic recession, our customers may delay in
paying us or not pay us at all. This would have a material and
adverse effect on our future operating results and financial
condition.
One of
the effects of the severe global economic recession is that businesses are
tending to maintain their cash resources and delay in paying their creditors
whenever possible. As a trade creditor, we lack leverage unlike
secured lenders and providers of essential services. Should the
economy further deteriorate, we may find that either advertisers, their
representative agencies or both may delay in paying us. Additionally,
we may find that advertisers will reduce Internet advertising which would reduce
our future revenues. These events would result in a number of adverse
effects upon us including increasing our borrowing costs, reducing our gross
profit margins, reducing our ability to borrow under our line of credit, and
reducing our ability to grow our business. These events would have a
material and adverse effect upon us.
Because
we expect to need additional capital to fund our growing operations, we may not
be able to obtain sufficient capital and may be forced to limit the scope of our
operations.
We expect
that as our business continues to grow we will need additional working capital.
In addition to the proceeds we received from our 2009 registered public
offering, we have available $7,000,000 accounts receivable factoring line of
credit with a commercial lender. As of May 12, 2010, both we and our lender have
the right to terminate the credit facility with 60 days prior written notice to
the other party, without being subject to any early termination
fee. We
do not expect this lender to terminate the agreement and as of the date of this
prospectus neither party has informed the other one of their intent to terminate
the agreement. We are currently evaluating our options with respect to extending
this line of credit on similar terms with this lender or obtaining a new line of
credit elsewhere. This lender is
privately-held and we have no access to any information about its financial
condition. Because of the severe impact that the recession has had on
the financial services sector, we may be adversely affected in our ability to
draw on our line of credit, replace this line of credit or increase the amount
we can borrow. The slowdown in the global economy and the freezing of
the credit markets may adversely affect our ability to raise
capital. If adequate additional debt and/or equity financing is not
available on reasonable terms or at all, we may not be able to continue to
expand our business, and we will have to modify our business plans
accordingly. These factors would have a material and adverse effect
on our future operating results and our financial condition.
Even if
we secure additional working capital, we may not be able to negotiate terms and
conditions for receiving the additional capital that are acceptable to
us. Any future equity capital financings will dilute existing
shareholders. In addition, new equity or convertible debt securities
issued by us to obtain financing could have rights, preferences and privileges
senior to our common stock. We cannot give you any assurance that any
additional financing will be available to us, or if available, will be on terms
favorable to us.
If advertising on
the Internet loses its appeal, our revenue could
decline.
Our
business model may not continue to be effective in the future for a number of
reasons, including the following: click and conversion rates have always been
low and may decline as the number of advertisements and ad formats on the
Internet increases; companies may prefer other forms of Internet advertising we
do not offer, including certain forms of search engine placements; companies may
reject or discontinue the use of certain forms of online promotions that may
conflict with their brand objectives; companies may not utilize online
advertising due to concerns of "click-fraud", particularly related to search
engine placements; regulatory actions may negatively impact certain business
practices that we currently rely on to generate a portion of our revenue and
profitability; and, perceived lead quality may diminish. If the
number of companies who purchase online advertising from us does not continue to
grow, we may experience difficulty in attracting publishers, and our revenue
could decline.
If we fail to
manage our supply of display advertising impressions (also referred to as
“publishing inventory”) and third party data partnerships effectively, our
profit margins could decline and should we fail to acquire additional publishing
inventory our growth could be impeded.
Our
success depends in part on our ability to manage our existing publishing
inventory and third party data partnership effectively. Our
publishers are not bound by long-term contracts that ensure us a consistent
supply of display advertising space, which we refer to as
inventory. In addition, publishers can change the amount of inventory
they make available to us at any time. If a publisher decides not to
make publishing inventory from its websites available to us, we may not be able
to replace this inventory with that from other publishers with comparable
traffic patterns and user demographics quickly enough to fulfill our
advertisers’ requests, thus resulting in potentially lost
revenues. Additionally, if a third-party data provider stopped
offering their data to us, we may not be able to replace this data with another
data provider of equal or better effectiveness. Our ability to
maintain our existing data partnerships, as well as attract new data partners,
will depend on various factors, some of which are beyond our
control.
We expect
that our advertiser customers’ requirements will become more sophisticated as
the Internet continues to mature as an advertising medium. If we fail
to manage our existing publisher inventory effectively to meet our advertiser
customers’ changing requirements, our revenues could decline. Our
growth depends on our ability to expand our publisher inventory. To
attract new customers, we must maintain a consistent supply of attractive
publisher inventory. We intend to expand our inventory by selectively
adding to our network new publishers that offer attractive demographics,
innovative and quality content and growing web user traffic. Our
ability both to retain current as well as to attract new publishers to our
network will depend on various factors, some of which are beyond our
control. These factors include, but are not limited to: our ability
to introduce new and innovative services, our efficiency in managing our
existing publisher inventory and our pricing policies. We cannot
assure you that the size of our publisher inventory will increase or remain
constant in the future.
If
the technology that we currently use to target the delivery of online
advertisements and to prevent fraud on our network is restricted or becomes
subject to regulation, our expenses could increase and we could lose customers
or advertising inventory.
The FTC
has issued guidelines recommending that Internet advertising firms that engage
in behavioral targeting implement industry-wide self-regulation in order to
protect the privacy of consumers who use the Internet. If
notwithstanding this report, the FTC were in the future to issue regulations, it
may adversely affect what we perceive to be a competitive
advantage. This could increase our costs and reduce our future
revenues.
If
we make acquisitions, it could divert management’s attention, cause ownership
dilution to our shareholders and be difficult to integrate.
Following
our acquisition of Desktop in August 2007, we have grown rapidly. We
expect to continue to evaluate and consider future
acquisitions. Acquisitions generally involve significant risks,
including difficulties in the assimilation of operations, services,
technologies, and corporate culture of the acquired companies, diversion of
management's attention from other business concerns, overvaluation of the
acquired companies, and the acceptance of the acquired companies’ products and
services by our customers. Acquisitions may not be successful, which
can have a number of adverse effects upon us including adverse financial effects
and may seriously disrupt our management’s time. The integration of
our acquired operations, products and personnel may place a significant burden
on management and our internal resources. The diversion of management
attention and any difficulties encountered in the integration process could harm
our business.
It
may be difficult to predict our financial performance because our quarterly
operating results may fluctuate.
Our
revenues, operating results and valuations of certain assets and liabilities may
vary significantly from quarter to quarter due to a variety of factors, many of
which are beyond our control. You should not rely on period-to-period
comparisons of our results of operations as an indication of our future
performance. Our results of operations may fall below the
expectations of market analysts and our own forecasts. If this
happens, the market price of our common stock may fall
significantly. The factors that may affect our quarterly operating
results and valuations of certain assets and liabilities include the
following:
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fluctuations in demand for our
advertising solutions or changes in customer
contracts;
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fluctuations in the amount of
available advertising space on our
network;
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the timing and amount of sales
and marketing expenses incurred to attract new
advertisers;
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the impact of our recent
substantial increase in headcount to meet expected increases in
revenue;
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fluctuations in our average ad
rates (i.e., the amount of advertising sold at higher rates rather than
lower rates);
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fluctuations in the cost of
online advertising and in the cost and/or amount of data available for
behavioral targeting
campaigns;
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seasonal patterns in Internet
advertisers’ spending;
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worsening economic conditions
which cause advertisers to reduce Internet spending and consumers to
reduce their purchases;
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increases in our investment in
new technology;
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changes in the regulatory
environment, including regulation of advertising or the Internet, that may
negatively impact our marketing
practices;
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the
timing and amount of expenses associated with litigation, regulatory
investigations or restructuring activities, including settlement costs and
regulatory penalties assessed related to government enforcement
actions;
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any changes we make in our
Critical Accounting Estimates described in Management’s Discussion and
Analysis of Financial Condition and Results of Operations incorporated by
reference in this
prospectus;
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the valuation of
available-for-sale securities may deteriorate
further;
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the adoption of new accounting
pronouncements, or new interpretations of existing accounting
pronouncements, that impact the manner in which we account for, measure or
disclose our results of operations, financial position or other financial
measures; and
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costs related to acquisitions of
technologies or businesses.
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Expenditures
by advertisers also tend to be cyclical, reflecting overall economic conditions
as well as budgeting and buying patterns. Any decline in the economic
prospects of advertisers or the economy generally may alter advertisers’ current
or prospective spending priorities, or may increase the time it takes us to
close sales with advertisers, and could materially and adversely affect our
business, results of operations and financial condition.
If
we fail to retain our key personnel, we may not be able to achieve our
anticipated level of growth and our business could suffer.
Our
future depends, in part, on our ability to attract and retain key personnel and
the continued contributions of our executive officers, each of whom may be
difficult to replace. In particular, Michael Mathews, Chief Executive Officer,
Michael Katz, President, Andrew Katz, Chief Technology Officer, Roger Clark,
Chief Financial Officer, Jason Lynn, Chief Strategy Officer, and Dave Myers,
Executive Vice President of Operations are important to the management of our
business and operations and the development of our strategic
direction. The loss of the services of Messrs. Mathews, Michael Katz,
Andrew Katz, Clark, Lynn and Myers and the process to replace any key personnel
would involve significant time and expense and may significantly delay or
prevent the achievement of our business objectives.
Our
two largest shareholders may be able to exert significant control over our
business and affairs and may have actual or potential interests that may depart
from those of our other shareholders.
Prior to
the sale of our common stock in this offering, our Co-Chairmen of the Board, who
are selling stockholders in this prospectus, own a substantial number of shares
of our common stock. The interests of such persons may differ from
the interests of other shareholders. As a result, in addition to
their positions with us, such persons may be able to have significant influence
over all corporate actions requiring shareholder approval, irrespective of how
our other shareholders may vote, including their ability to:
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elect or defeat the election of
our directors;
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amend or prevent amendment of our
certificate of incorporation or
bylaws;
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effect or prevent a merger, sale
of assets or other corporate transaction;
and
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control the outcome of any other
matter submitted to the shareholders for
vote.
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Their
power to control the designation of directors gives them the ability to exert
influence over day-to-day operations. In addition, such persons’ stock ownership
may discourage a potential acquirer from making a tender offer or otherwise
attempting to obtain control of us, which in turn could reduce our stock price
or prevent our shareholders from realizing a premium over our stock
price.
Because
government regulation of the Internet may subject us to additional operating
restrictions and regulations, our business and operating results may be
adversely affected.
Companies
engaging in online search, commerce and related businesses face uncertainty
related to future government regulation of the Internet. Due to the
rapid growth and widespread use of the Internet, federal and state governments
are enacting and considering various laws and regulations relating to the
Internet. Furthermore, the application of existing laws and
regulations to Internet companies remains somewhat unclear. Our
business and operating results may be negatively affected by new laws, and such
existing or new regulations may expose us to substantial compliance costs and
liabilities and may impede the growth in use of the Internet.
Additionally, our third party data partners may be adversely affected by any new
or existing laws.
The
application of these statutes and others to the Internet search industry is not
entirely settled. Further, several existing and proposed federal laws
could have an impact on our business and our third party data partners’
business:
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The Digital Millennium Copyright Act and its related safe harbors, are intended
to reduce the liability of online service providers for listing or linking to
third-party websites that include materials that infringe copyrights or other
rights of others.
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The CAN-SPAM Act of 2003 and certain state laws are intended to regulate
interstate commerce by imposing limitations and penalties on the transmission of
unsolicited commercial electronic mail via the Internet.
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There have been several bills introduced in the Congress in recent years
relating to protecting privacy. As with any change in Presidential
administration, especially to one more likely to protect privacy, new
legislation in this area may be enacted.
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Adopted and pending consumer protection and privacy legislation, including the
FTC Online Behavioral Advertising Principles referred to in a prior risk
factor.
With
respect to the subject matter of each of these laws, courts may apply these laws
in unintended and unexpected ways. As a company that
provides services over the Internet, we may be subject to an action brought
under any of these or future laws governing online services. We may
also be subject to costs and liabilities with respect to privacy issues.
Several Internet companies have incurred costs and paid penalties for violating
their privacy policies. Further, it is anticipated that new legislation
may be adopted by federal and state governments with respect to user
privacy. Additionally, foreign governments may pass laws which could
negatively impact our business or may prosecute us for our products and services
based upon existing laws. The restrictions imposed by and cost of
complying with, current and possible future laws and regulations related to our
business could harm our business and operating results. Further, any such laws
that affect our third party data partners could indirectly harm our business and
operating results.
If
we are subject to legal claims, and/or government enforcement actions and held
liable for our or our customers’ failure to comply with federal, state and
foreign laws, regulations or policies governing consumer privacy, it could
materially harm our business and damage our reputation.
Recent
growing public concern regarding privacy and the collection, distribution and
use of information about Internet users has led to increased federal, state and
foreign scrutiny and legislative and regulatory activity concerning data
collection and use practices. The United States Congress currently
has pending legislation regarding privacy and data security measures (e.g., S.
495, the “Personal Data Privacy and Security Act of 2007”). Any
failure by us to comply with applicable federal, state and foreign laws and the
requirements of regulatory authorities may result in, among other things,
indemnification liability to our customers and the advertising agencies we work
with, administrative enforcement actions and fines, class action lawsuits, cease
and desist orders, and civil and criminal liability. Recently, class
action lawsuits have been filed alleging violations of privacy laws by Internet
service providers. The European Union's directive addressing data
privacy limits our ability to collect and use information regarding Internet
users. These restrictions may limit our ability to target advertising
in most European countries. Our failure to comply with these or other
federal, state or foreign laws could result in liability and materially harm our
business.
In
addition to government activity, privacy advocacy groups and the technology and
direct marketing industries are considering various new, additional or different
self-regulatory standards. This focus, and any legislation,
regulations or standards promulgated, may impact us
adversely. Governments, trade associations and industry
self-regulatory groups may enact more burdensome laws, regulations and
guidelines, including consumer privacy laws, affecting our customers and
us. Since many of the proposed laws or regulations are just being
developed, and a consensus on privacy and data usage has not been reached, we
cannot yet determine the impact these proposed laws or regulations may have on
our business. However, if the gathering of profiling information were
to be curtailed, Internet advertising would be less effective, which would
reduce demand for Internet advertising and harm our business.
Third
parties may bring class action lawsuits against us relating to online privacy
and data collection. We disclose our information collection and
dissemination policies, and we may be subject to claims if we act or are
perceived to act inconsistently with these published policies. Any
claims or inquiries could be costly and divert management's attention, and the
outcome of such claims could harm our reputation and our business.
Our
customers are also subject to various federal and state laws concerning the
collection and use of information regarding individuals. These laws
include the Children's Online Privacy Protection Act, the federal Drivers
Privacy Protection Act of 1994, the privacy provisions of the Gramm-Leach-Bliley
Act, the federal CAN-SPAM Act of 2003, as well as other laws that govern the
collection and use of consumer credit information. We cannot assure
you that our customers are currently in compliance, or will remain in
compliance, with these laws and their own privacy policies. We may be
held liable if our customers use our technologies in a manner that is not in
compliance with these laws or their own stated privacy policies.
If
we are not able to protect our intellectual property from unauthorized use, it
could diminish the value of our products and services, weaken our competitive
position and reduce our revenues.
Our
success depends in large part on our proprietary demographic, behavioral,
contextual, geographic and retargeting technologies. In addition, we
believe that our trademarks are key to identifying and differentiating our
products and services from those of our competitors. We may be
required to spend significant resources to monitor and police our intellectual
property rights. If we fail to successfully enforce our intellectual
property rights, the value of our products and services could be diminished and
our competitive position may suffer.
We rely
on a combination of copyright, trademark and trade secret laws, confidentiality
procedures and licensing arrangements to establish and protect our proprietary
rights. Third-party software providers could copy or otherwise obtain
and use our technologies without authorization or develop similar technologies
independently, which may infringe upon our proprietary rights. We may
not be able to detect infringement and may lose competitive position in the
market before we do so. In addition, competitors may design around
our technologies or develop competing technologies. Intellectual
property protection may also be unavailable or limited in some foreign
countries.
We
generally enter into confidentiality or license agreements with our employees,
consultants, vendors, customers, and corporate partners, and generally control
access to and distribution of our technologies, documentation and other
proprietary information. Despite these efforts, unauthorized parties
may attempt to disclose, obtain or use our products and services or
technologies. Our precautions may not prevent misappropriation of our
products, services or technologies, particularly in foreign countries where laws
or law enforcement practices may not protect our proprietary rights as fully as
in the United States.
If
we become involved in lawsuits relating to our intellectual property rights, it
could be expensive and time consuming, and an adverse result could result in
significant damages and/or force us to make changes to our
business.
We rely
on trade secrets to protect our intellectual property rights. If we are sued by
a third party which alleges we are violating its intellectual property rights or
if we sue a third party for violating our rights, intellectual property
litigation is very expensive and can divert our limited resources. We
may not prevail in any litigation. An adverse determination of any
litigation brought by us could materially and adversely affect our future
results of operations by either reducing future revenues or increasing future
costs. Additionally, an adverse award of money damages could affect
our financial condition.
Furthermore,
because of the substantial amount of discovery required in connection with
intellectual property litigation, there is a risk that some of our confidential
information could be compromised by disclosure during this type of
litigation. In addition, during the course of this kind of
litigation, there could be public announcements of the results of hearings,
motions or other interim proceedings or developments in the
litigation. If securities analysts or investors perceive these
results to be negative, it could have an adverse effect on the trading price of
our common stock.
If
we are not able to respond to the rapid technological change characteristic of
our industry, our services may not be competitive.
The
market for our services is characterized by rapid change in business models and
technological infrastructure, and we will need to constantly adapt to changing
markets and technologies to provide competitive services. We believe
that our future success will depend, in part, upon our ability to develop our
services for both our target market and for applications in new
markets. We may not, however, be able to successfully do so, and our
competitors may develop innovations that render our services
uncompetitive.
If
our computer systems fail to operate effectively in the future, we may incur
significant costs to remedy these failures and may sustain reduced
revenues.
Our
success depends on the continuing and uninterrupted performance of our computer
systems. Sustained or repeated system failures that interrupt our ability to
provide services to customers, including failures affecting our ability to
deliver advertisements quickly and accurately and to process visitors’ responses
to advertisements, would reduce significantly the attractiveness of our
solutions to advertisers and publishers. Our business, results of
operations and financial condition could also be materially and adversely
affected by any systems damage or failure that impacts data integrity or
interrupts or delays our operations. Our computer systems are
vulnerable to damage from a variety of sources, including telecommunications
failures, power outages and malicious or accidental human acts. Any
of the above factors could substantially harm our business resulting in
increased costs. Moreover, despite network security measures, our
servers are potentially vulnerable to physical or electronic break-ins, computer
viruses and similar disruptive problems in part because we cannot control the
maintenance and operation of our third-party data centers. Any of
these occurrences could cause material interruptions or delays in our business,
result in the loss of data, render us unable to provide services to our
customers, and expose us to material risk of loss or litigation and
liability. If we fail to address these issues in a timely manner, it
may materially damage our reputation and business causing our revenues to
decline.
Computer
viruses could damage our business.
Computer
viruses, worms and similar programs may cause our systems to incur delays or
other service interruptions and could damage our reputation and ability to
provide our services and expose us to legal liability, all of which could have a
material adverse effect on our business, results of operations, financial
condition and the trading price of our common stock.
Because
our third-party servers are located in South Florida, in the event of a
hurricane our operations could be adversely affected.
We rely
upon servers owned by third parties which are located in South Florida where our
technology offices are located. Because South Florida is in a
hurricane-sensitive area, we are susceptible to the risk of damage to our
servers. This damage can interrupt our ability to provide
services. If damage caused to our servers were to cause them to be
inoperable for any amount of time, we would be forced to switch hosting
facilities which could be more costly. We are not insured against any
losses or expenses that arise from a disruption or any short-term outages to our
business due to hurricanes or tropical storms.
Since
we rely on third-party co-location providers, a failure of service by these
providers could adversely affect our business and reputation.
We rely
upon third party co-location providers to host our main servers. In
the event that these providers experience any interruption in operations or
cease operations for any reason or if we are unable to agree on satisfactory
terms for continued hosting relationships, we would be forced to enter into a
relationship with other service providers or assume hosting responsibilities
ourselves. If we are forced to switch hosting facilities, we may not
be successful in finding an alternative service provider on acceptable terms or
in hosting the computer servers ourselves. We may also be limited in
our remedies against these providers in the event of a failure of service. In
the past, short-term outages have occurred in the service maintained by
co-location providers which could recur. We added a fully-redundant
co-location facility in the Washington D.C. area in the first quarter of 2010 to
mitigate the single point of failure risk. We also rely on third-party providers
for components of our technology platform. A failure or limitation of
service or available capacity by any of these third-party providers could
adversely affect our business and reputation.
If
we fail to maintain an effective system of internal controls, we may not be able
to accurately report our financial results or prevent fraud and our business may
be harmed and our stock price may be adversely impacted.
Effective
internal controls are necessary for us to provide reliable financial reports and
to effectively prevent fraud. Any inability to provide reliable financial
reports or to prevent fraud could harm our business. The
Sarbanes-Oxley Act of 2002 requires management to evaluate and assess the
effectiveness of our internal control over financial reporting. We
determined that our internal control over financial reporting was effective as
of December 31, 2009. In order to continue to comply with the
requirements of the Sarbanes-Oxley Act, we are required to continuously evaluate
and, where appropriate, enhance our policies, procedures and internal
controls. If we fail to maintain the adequacy of our internal
controls, we could be subject to litigation or regulatory scrutiny and investors
could lose confidence in the accuracy and completeness of our financial
reports. We cannot assure you that in the future we will be able to
fully comply with the requirements of the Sarbanes-Oxley Act or that management
will conclude that our internal control over financial reporting is
effective. If we fail to fully comply with the requirements of the
Sarbanes-Oxley Act, our business may be harmed and our stock price may
decline.
Risks
Related to Our Common Stock
Due
to factors beyond our control, our stock price may be volatile.
Any of
the following factors could affect the market price of our common
stock:
|
|
·
|
Actual or anticipated variations
in our quarterly results of
operations;
|
|
|
·
|
Our failure to meet financial
analysts’ performance
expectations;
|
|
|
·
|
Our failure to meet or exceed our
own publicly-disclosed
forecasts;
|
|
|
·
|
Our failure to achieve and
maintain profitability;
|
|
|
·
|
Short selling
activities;
|
|
|
·
|
The loss of major advertisers,
publishers or data
providers;
|
|
|
·
|
Announcements by us or our
competitors of significant contracts, new products, acquisitions,
commercial relationships, joint ventures or capital
commitments;
|
|
|
·
|
The departure of key
personnel;
|
|
|
·
|
Regulatory
developments;
|
|
|
·
|
Changes in market valuations of
similar companies; or
|
|
|
·
|
The sale of a large amount of
common stock by shareholders owning large
positions.
|
In the
past, following periods of volatility in the market price of a company’s
securities, securities class action litigation has often been
instituted. A securities class action suit against us could result in
substantial costs and divert our management’s time and attention, which would
otherwise be used to benefit our business.
Because
almost all of our outstanding shares are freely tradable, sales of these shares
could cause the market price of our common stock to drop significantly, even if
our business is performing well.
As of the
date of this prospectus, we had outstanding 23,798,585 shares of common stock of
which our directors and executive officers own 4,457,898 shares that are subject
to the limitations of Rule 144 under the Securities Act of 1933, or the
Securities Act. All of the remaining outstanding shares are freely
tradable. The restricted shares, not held by our directors or executive
officers, will be eligible for sale under Rule 144 on various dates through
September 2010.
In
general, Rule 144 provides that any non-affiliate of ours, who has held
restricted common stock for at least six-months, is entitled to sell their
restricted stock freely, provided that we stay current in our filings with the
Securities and Exchange Commission, or the SEC.
An
affiliate of ours may sell after six months with the following
restrictions:
|
|
(i)
|
we are current in our
filings,
|
|
|
(ii)
|
certain manner of sale
provisions,
|
|
|
(iii)
|
filing of Form 144,
and
|
|
|
(iv)
|
volume limitations limiting the
sale of shares within any three-month period to a number of shares that
does not exceed the greater of 1% of the total number of outstanding
shares or, the average weekly trading volume during the four calendar
weeks preceding the filing of a notice of
sale.
|
Because
almost all of our outstanding shares are freely tradable and the shares held by
our affiliates may be freely sold (subject to the Rule 144 limitations), sales
of these shares could cause the market price of our common stock to drop
significantly, even if our business is performing well.
Delaware law contains anti-takeover
provisions that could deter takeover attempts that could be beneficial to our
stockholders.
Provisions
of Delaware law could make it more difficult for a third-party to acquire us,
even if doing so would be beneficial to our stockholders. Section 203 of the
Delaware General Corporation Law may make the acquisition of the Company and the
removal of incumbent officers and directors more difficult by prohibiting
stockholders holding 15% or more of our outstanding voting stock from acquiring
the Company, without our board of directors' consent, for at least three years
from the date they first hold 15% or more of the voting stock.
We
have not and do not anticipate paying any dividends on our common
stock.
We have
paid no dividends on our common stock to date and it is not anticipated that any
dividends will be paid to holders of our common stock in the foreseeable future.
While our future dividend policy will be based on the operating results and
capital needs of the business, it is currently anticipated that any earnings
will be retained to finance our future expansion and for the implementation of
our business plan. As an investor, you should take note of the fact that a lack
of a dividend can further affect the market value of our stock, and could
significantly affect the value of any investment in our company.
Our Board of
Directors has the authority, without stockholder approval, to issue preferred
stock with terms that may not be beneficial to common stock
holders.
Our
certificate of incorporation authorize the issuance of preferred shares which
may be issued with dividend, liquidation, voting and redemption rights senior to
our common stock without prior approval by the stockholders. The preferred stock
may be issued for such consideration as may be fixed from time to time by the
Board of Directors. The Board of Directors may issue such shares of preferred
stock in one or more series, with such designations, preferences and rights or
qualifications, limitations or restrictions thereof as shall be stated in the
resolution of resolutions.
The
issuance of preferred stock could adversely affect the voting power and other
rights of the holders of common stock. Preferred stock may be issued quickly
with terms calculated to discourage, make more difficult, delay or prevent a
change in control of our Company or make removal of management more difficult.
As a result, the Board of Directors’ ability to issue preferred stock may
discourage the potential hostile acquirer, possibly resulting in beneficial
negotiations. Negotiating with an unfriendly acquirer may result in, among other
things, terms more favorable to us and our stockholders. Conversely, the
issuance of preferred stock may adversely affect any market price of, and the
voting and other rights of the holders of the common stock. We presently have no
plans to issue any preferred stock.
NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus contains, and any prospectus supplements contain, and the documents
incorporated by reference therein include, forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements relate to future events or to
our future financial performance and involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievement s to be materially different from any future results,
performances or achievements expressed or implied by the forward-looking
statements. Forward-looking statements may include, but are not limited to,
statements about:
|
|
·
|
The length and severity of the
global economic recession;
|
|
|
·
|
The ability to grow through
acquisitions and the ability to finance and integrate
acquisitions;
|
|
|
·
|
The availability, and cost, of
publishing inventory and the willingness or publishers to permit third
parties, such as us, to manage that
inventory;
|
|
|
·
|
Customer and agency requirements
and desires to utilize the Internet as an advertising
medium;
|
|
|
·
|
FTC and other regulatory rules,
new initiatives and guidelines, and regulatory acceptance of our present
business strategies and
practices;
|
|
|
·
|
Our technology needs and
technological developments;
and
|
|
|
·
|
Our estimates concerning capital
requirements and need for additional
financing.
|
In some
cases, you can identify forward-looking statement by terms such as “believe,”
“may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“should,” “could,” “target,” “potential,” “is likely,” “will,” “expect,” “plan”
“project,” “permit,” “believe” and similar expressions intended to identify
forward-looking statements. These statements reflect our current views with
respect to future events and are based on assumptions and subject to risks and
uncertainties. Given these uncertainties, you should not place undue reliance on
these forward-looking statements. We discuss many of these risks in greater
detail under the heading “Risk Factors” in our SEC filings, and may provide
additional information in any applicable prospectus supplement. Also, these
forward-looking statements represent our estimates and assumptions only as of
the date of the document containing the applicable statement.
You
should read this prospectus, the registration statement of which this prospectus
is a part, the documents incorporated by reference herein, and any applicable
prospectus supplement completely and with the understanding that our actual
future results may be materially different from what we expect. We qualify all
of the forward-looking statements in the foregoing documents by these cautionary
statements.
You
should rely only on the information contained, or incorporated by reference, in
this prospectus and any applicable prospectus supplement. We have not, and the
selling stockholder has not, authorized anyone to provide you with different
information. The common stock offered under this prospectus is not being offered
in any state where the offer is not permitted. You should not assume that the
information provided by this prospectus or any prospectus supplement is accurate
as of any date other than the date on the front of this prospectus or the
prospectus supplement, as applicable, or that any information incorporated by
reference in this prospectus or in any prospectus supplement is accurate as of
any date other than the date of the document so incorporated by reference.
Unless required by law, we undertake no obligation to update or revise any
forward-looking statements to reflect new information or future events or
developments. Thus, you should not assume that our silence over time means that
actual events are bearing out as expressed or implied in such forward-looking
statements.
USE OF PROCEEDS
The sale
of shares of common stock offered hereby is being registered for the account of
the selling stockholders named in this prospectus. As a result, all proceeds
from the sales of the common stock will go to the selling stockholders and we
will not receive any of the proceeds from the resale of such shares by the
selling stockholders.
SELLING
STOCKHOLDERS
The
following table sets forth as of June 30, 2010 information about each selling
stockholder including the current beneficial ownership of our common stock by
the persons identified, based on information provided to us by them, which we
have not independently verified. Each of the selling stockholders has
advised us that he is not a registered broker-dealer or an affiliate of a
registered broker-dealer.
Although
we have assumed for purposes of the table that the selling stockholders will
sell all of the shares offered by this prospectus, because they may from time to
time offer all or some of their shares under this prospectus or in another
manner, no assurance can be given as to the actual number of shares that will be
resold by the selling stockholder (or any of them), or that will be held after
completion of the resales. In addition, a selling stockholder may have sold or
otherwise disposed of shares in transactions exempt from the registration
requirements of the Securities Act or otherwise since the date he or she
provided information to us.
The
percentages for each selling stockholder are based on 23,798,585 shares issued
and outstanding, plus the additional shares that the selling stockholder is
deemed to beneficially own as set forth in the table.
|
Selling Stockholder
|
|
Number of
Shares
Beneficially
Owned Before the
Offering
|
|
|
Number of
Shares Being
Offered
|
|
|
Number of
Shares
Beneficially
Owned After the
Offering (1)
|
|
|
Percent of
Shares
Beneficially
Owned After the
Offering (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barry
Honig (2)
|
|
|
1,223,845 |
(3) |
|
|
1,100,000 |
|
|
|
123,845 |
|
|
|
* |
|
|
BMB
Holdings, LLLP (4)
|
|
|
1,008,000 |
|
|
|
1,008,000 |
|
|
|
0 |
|
|
|
0 |
% |
|
Michael
and Betsy Brauser TBE
|
|
|
386,500 |
(5) |
|
|
342,750 |
|
|
|
43,750 |
|
|
|
* |
|
|
Betsy
G. Brauser Retained Annuity Trust (6)
|
|
|
475,000 |
|
|
|
250,000 |
|
|
|
225,000 |
|
|
|
* |
|
|
Michael
Mathews (7)
|
|
|
1,399,583 |
(8) |
|
|
260,000 |
|
|
|
1,139,583 |
|
|
|
4.6 |
% |
|
GRQ
Consultants, Inc. 401K (9)
|
|
|
143,028 |
|
|
|
100,000 |
|
|
|
43,028 |
|
|
|
* |
|
|
Total
|
|
|
|
|
|
|
3,060,750 |
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes
that all shares offered here are
sold.
|
| |
(2)
|
Barry
Honig is Co-Chairman of our board of
directors.
|
| |
(3)
|
Number
of shares beneficially owned includes 37,500 shares issuable upon exercise
of options held by Mr. Honig that are exercisable within 60 days of the
date of this prospectus.
|
| |
(4)
|
Michael
Brauser, our Co-Chairman, is the Manager of BMB Holdings, LLC, which is
the General Partner of BMB Holdings,
LLLP.
|
| |
(5)
|
Number
of shares beneficially owned includes 37,500 shares issuable upon exercise
of options held by Mr. Brauser that are exercisable within 60 days of the
date of this prospectus.
|
| |
(6)
|
Betsy
Brauser, wife of our Co-Chairman Michael Brauser, is the trustee and
beneficiary of the Betsy G. Brauser Retained Annuity
Trust.
|
| |
(7)
|
Michael
Mathews is our Chief Executive Officer and a
director.
|
| |
(8)
|
Number
of shares beneficially owned includes 939,583 shares issuable upon
exercise of options held by Mr. Mathews that are exercisable within 60
days of the date of this
prospectus.
|
| |
(9)
|
Barry
Honig is the trustee of GRQ Consultants, Inc.
401K.
|
PLAN
OF DISTRIBUTION
We are
registering the shares of our common stock covered by this prospectus for the
selling stockholders. The selling stockholders and any of their respective
pledgees, donees, assignees and other successors-in-interest may, from time to
time, sell any or all of their shares of common stock on The NASDAQ Stock
Market, in the over-the-counter market, or in private
transactions. These sales may be at fixed prices which may be
changed, at market prices at the time of sale, at prices related to market
prices or at negotiated prices. The selling stockholders may use any one or more
of the following methods when selling shares:
|
|
·
|
Ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
|
·
|
Block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
|
·
|
Purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
|
·
|
An
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
|
·
|
Privately
negotiated transactions;
|
|
|
·
|
Broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per
share;
|
|
|
·
|
Writing
of options on the shares;
|
|
|
·
|
A
combination of any such methods of sale;
and
|
|
|
·
|
Any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The
selling stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling stockholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged
shares.
The
selling stockholders or their respective pledgees, donees, transferees or other
successors in interest may also sell the shares directly to market makers acting
as principals and/or broker-dealers acting as agents for themselves or their
customers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price. The
selling stockholders and any brokers, dealers or agents, upon effecting the sale
of any of the shares offered in this prospectus, may be deemed to be
“underwriters” as that term is defined under the Securities Act or the rules
thereunder. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities
Act.
The
selling stockholders, alternatively, may sell all or any part of the shares
offered in this prospectus through an underwriter, including any underwriter
engaged by us for sale of shares of our common stock. No selling stockholder has
entered into any agreement with a prospective underwriter.
The
selling stockholders and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Exchange Act and the rules thereunder, including Regulation M. These provisions
may restrict certain activities of, and limit the timing of purchases and sales
of any of the shares by, the selling stockholders or any other such person.
Furthermore, under Regulation M, persons engaged in a distribution of
securities are prohibited from simultaneously engaging in market making and
certain other activities with respect to such securities for a specified period
of time prior to the commencement of such distributions, subject to specified
exceptions or exemptions. All of these limitations may affect the marketability
of the shares.
We may
agree to indemnify the selling stockholders including for liabilities under the
Securities Act or to contribute to payments the selling stockholders may be
required to make in respect of such liabilities. If selling stockholders notify
us that they have a material arrangement with a broker-dealer for the resale of
the common stock, then we would be required to amend the registration statement
of which this prospectus is a part, or file a prospectus supplement to describe
the agreements between the selling stockholders and the
broker-dealer.
We are
paying all fees and expenses incident to the registration of the shares,
excluding fees and disbursements of counsel to the selling stockholders,
brokerage commissions and underwriting discounts required to be paid by the
selling stockholders.
Each
selling stockholder who uses this prospectus for any sale of our common stock
will be subject to the prospectus delivery requirements of the Securities Act.
The selling stockholders are also responsible for complying with the applicable
provisions of the Exchange Act and the rules thereunder including Regulation M
in connection with their sales of shares of common stock under this prospectus
and any prospectus supplement.
LEGAL MATTERS
The
validity of the common stock offered by this prospectus will be passed upon by
Sichenzia Ross Friedman Ference LLP, New York, New York.
EXPERTS
The
financial statements as of and for the year ended December 31, 2009,
incorporated by reference in this prospectus, have been so incorporated in
reliance on the report of J.H. Cohn LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and
accounting. The financial statements as of and for the year ended
December 31, 2008, incorporated by reference in this prospectus, have been
so incorporated in reliance on the report of Salberg & Company, P.A., an
independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
INCORPORATION OF DOCUMENTS BY
REFERENCE
SEC rules
allow us to “incorporate by reference” into this prospectus much of the
information we file with the SEC, which means that we can disclose important
information to you by referring to those publicly available
documents. The information that we incorporate by reference in this
prospectus is consider to be part of this prospectus. The following
documents filed with the SEC are hereby incorporated by reference in this
prospectus:
|
|
·
|
Our
annual report on Form 10-K for the fiscal year ended
December 31, 2009, filed with the SEC on March 31,
2010.
|
|
|
·
|
Our
quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2010,
filed with the SEC on May 14, 2010.
|
|
|
·
|
Our
current report on Form 8-K filed on June 16,
2010.
|
|
|
·
|
Our
current report on Form 8-K filed on May 25,
2010.
|
|
|
·
|
Our
current report on Form 8-K filed on May 11,
2010.
|
|
|
·
|
The
description of our common stock contained in our Exchange Act Registration
Statement on Form 8-A12B filed with the SEC on November 4, 2009
incorporating the description contained in our Registration Statement on
Form S-1/A filed with the SEC August 24,
2009.
|
|
|
·
|
All
documents filed by us with the SEC 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 this
offering.
|
We hereby
undertake to provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered, upon written or oral
request, a copy of any and all of the information that has been incorporated by
reference in this prospectus but not delivered with this
prospectus. Request for such copies should be directed to interCLICK,
Inc., 11 West 19th Street,
10th
Floor, New York, NY 10011, Attention: Roger Clark, Chief Financial Officer,
telephone number (646) 722-6260.
Any
statement contained in a document incorporated by reference or deemed
incorporated by reference in this prospectus shall be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any subsequently filed document
that also is or is deemed to be incorporated by reference modifies, supersedes
or replaces such statement. Any statement so modified, superseded or
replaced shall not be deemed, except as so modified, superseded or replaced, to
constitute a part of this prospectus.
WHERE YOU CAN FIND MORE
INFORMATION
We have
filed with the SEC a registration statement on Form S-3, including the exhibits,
schedules, and amendments to this registration statement, under the Securities
Act with respect to the shares of common stock to be sold in this offering. This
prospectus, which is part of the registration statement, does not contain all
the information set forth in the registration statement. For further information
with respect to us and the shares of our common stock to be sold in this
offering, we make reference to the registration statement. Although this
prospectus contains all material information regarding us, statements contained
in this prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete, and in each instance we make
reference to the copy of such contract, agreement or other document filed as an
exhibit to the registration statement, each such statement being qualified in
all respects by such reference.
We also
file annual, quarterly and current reports, proxy statements and other
information required by the Exchange Act with the SEC. You may read
and copy all or any portion of the registration statement or any other materials
that we file with the SEC at the SEC’s Public Reference Room at 100 F Street,
N.E., Washington, DC 20549. You may also obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our
SEC filings, including the registration statement, are also available to you on
the SEC’s website at www.sec.gov.
PART II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
ITEM
14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table sets forth the costs and expenses payable by us in connection
with the issuance and distribution of the securities being registered hereunder.
No expenses shall be borne by the selling shareholders. All of the amounts shown
are estimates, except for the SEC Registration Fees.
|
SEC
registration fees
|
|
$
|
818.37
|
|
|
Legal
fees and expenses
|
|
$
|
15,000.00
|
|
|
Accounting
fees and expenses
|
|
$
|
8,000.00
|
|
|
Miscellaneous
expenses
|
|
$
|
500.00
|
|
|
Total
|
|
$
|
24,318.37
|
|
ITEM
15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our
Certificate of Incorporation provides that we shall indemnify our officers and
directors, employees and agents and former officers, directors, employees and
agents against expenses (including attorney’s fees), judgments, fines and
amounts paid in settlement arising out of his or her services on behalf of us
subject to the qualifications contained in Delaware
law. Additionally, we will advance expenses to those parties
mentioned in the previous sentence to the fullest extent allowed under Delaware
law.
Our
bylaws provide for indemnification of our directors and officers to the fullest
extent permitted by law.
Section 102(b)(7)
of the Delaware General Corporation Law (the “DGCL”) provides that a certificate
of incorporation may include a provision which eliminates or limits the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director’s duty of loyalty to the company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, relating to prohibited dividends or distributions
or the repurchase or redemption of stock or (iv) for any transaction from
which the director derives an improper personal benefit. Our certificate of
incorporation, as amended, includes such a provision. As a result of this
provision, we and our stockholders may be unable to obtain monetary damages from
a director for breach of his or her duty of care.
We have
entered into Indemnification Agreements with our officers and directors
providing for indemnification and containing an advancement of expenses
provision. Delaware law generally provides that a corporation shall
have such power to indemnify such persons to the extent they acted in good faith
in a manner they reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful. In the
event any such person shall be judged liable such indemnification shall apply
only if approved by the court in which the action was brought. Any
other indemnification shall be made by a majority vote of the Board of Directors
(excluding any directors who were party to such action), or by a committee of
directors designated by majority vote of the Board of Directors or by
independent legal counsel in a written opinion, or by a majority vote of
shareholders (excluding any shareholders who were parties to such
action).
We
maintain a general liability insurance policy that covers certain liabilities of
our directors arising out of claims based on acts or omissions in their
capacities as directors.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the company pursuant to
the foregoing provisions, we have been informed that in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
ITEM
16. EXHIBITS
|
No.
|
|
Description
|
|
4.1
|
|
Certificate
of Amendment to the Certificate of Incorporation of interClick, Inc.
(incorporated by reference to Exhibit 3.3 to Registration Statement on
Form 8-A12B (File No. 001-34523) filed November 3,
2009)
|
|
4.2
|
|
Certificate
of Amendment to Certificate of Incorporation of Customer Acquisition
Network Holdings, Inc. (incorporated by reference to Exhibit 3.1 to
Current Report on Form 8-K filed July 1, 2008))
|
|
4.3
|
|
Amended
and Restated Certificate of Incorporation of Outsiders Entertainment, Inc.
(incorporated by reference to Exhibit
3.1 to Current Report on Form 8-K filed August 30,
2007)
|
|
4.4
|
|
Amended
and Restated Bylaws (incorporated by reference to Exhibit 3.6 to
Registration Statement on Form S-3/A (File No. 333-163159) filed November
25, 2009)
|
|
5.1
|
|
Opinion
of Sichenzia Ross Friedman Ference LLP
|
| 23.1 |
|
Consent
of J.H. Cohn LLP |
|
23.2
|
|
Consent
of Salberg & Company, P.A
|
|
|
|
|
|
23.3
|
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in Exhibit
5.1)
|
|
24.1
|
|
Power
of Attorney (included on the signature page
hereto)
|
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 of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. 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 changes in volume
and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(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
subparagraphs (i), (ii) and (iii) above do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of 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 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.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser, if the Registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Rule 430B or other
than prospectuses field in reliance on Rule 430A, shall be deemed to be
part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
|
(b)
|
The
undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference 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 of
1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on July 6, 2010.
|
|
interCLICK, Inc.
|
|
|
|
|
|
|
By:
|
/s/
Michael Mathews
|
|
|
|
Michael
Mathews
Chief
Executive Officer
(Principal
Executive Officer)
|
POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Michael Mathews and Roger Clark, and each or either of
them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-3, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
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 any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Michael Mathews
|
|
Chief
Executive Officer and Director
(Principal
Executive Officer)
|
|
July
6, 2010
|
|
Michael
Mathews
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Roger Clark
|
|
Chief
Financial Officer
(Principal
Financial Officer and Principal Accounting Officer)
|
|
July
6, 2010
|
|
Roger
Clark
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Michael Brauser
|
|
Co-Chairman
|
|
July
6, 2010
|
|
Michael
Brauser
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Barry Honig
|
|
Co-Chairman
|
|
July
6, 2010
|
|
Barry
Honig
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Brett Cravatt
|
|
Director
|
|
July
6, 2010
|
|
Brett
Cravatt
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Michael Katz
|
|
Director
|
|
July
6, 2010
|
|
Michael
Katz
|
|
|
|
|
EXHIBIT
INDEX
|
No.
|
|
Description
|
|
4.1
|
|
Certificate
of Amendment to the Certificate of Incorporation of interClick, Inc.
(incorporated by reference to Exhibit 3.3 to Registration Statement on
Form 8-A12B (File No. 001-34523) filed November 3,
2009)
|
|
4.2
|
|
Certificate
of Amendment to Certificate of Incorporation of Customer Acquisition
Network Holdings, Inc. (incorporated by reference to Exhibit 3.1 to
Current Report on Form 8-K filed July 1, 2008))
|
|
4.3
|
|
Amended
and Restated Certificate of Incorporation of Outsiders Entertainment, Inc.
(incorporated by reference to Exhibit
3.1 to Current Report on Form 8-K filed August 30,
2007)
|
|
4.4
|
|
Amended
and Restated Bylaws (incorporated by reference to Exhibit 3.6 to
Registration Statement on Form S-3/A (File No. 333-163159) filed November
25, 2009)
|
|
5.1
|
|
Opinion
of Sichenzia Ross Friedman Ference LLP
|
|
23.1
|
|
Consent
of J.H. Cohn LLP |
|
23.2
|
|
Consent
of Salberg & Company, P.A
|
|
|
|
|
|
23.3
|
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in Exhibit
5.1)
|
|
24.1
|
|
Power
of Attorney (included on the signature page
hereto)
|