As filed with the Securities and Exchange Commission on February 7, 2002
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WEBB INTERACTIVE SERVICES, INC.
(Exact name of registrant as specified in its charter)
COLORADO
(State or other jurisdiction of incorporation or organization)
84-1293864
(I.R.S. Employer Identification No.)
1899 WYNKOOP, SUITE 600
DENVER, COLORADO 80202
(303) 296-9200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
WILLIAM R. CULLEN
WEBB INTERACTIVE SERVICES, INC.
1899 WYNKOOP, SUITE 600
DENVER, COLORADO 80202
(303) 296-9200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of earlier effective registration
statement for same offering. [_]______________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for same offering. [_] ____________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
Proposed
Title of each class Proposed maximum
of securities to be Amount to be Maximum offering aggregate offering Amount of
registered registered price per unit (1) price (1) registration fee
- -------------------------------------------------------------------------------------------------------------------
Common Stock, no par value 3,689,680(2) $.75 $2,767,260 $254.59
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of Regulation C as of the close of the market on
February 5, 2002.
(2) 367,805 shares of common stock currently outstanding; 2,400,000 shares of
common stock issuable upon conversion of series D junior convertible
preferred stock; and 921,875 shares of common stock issuable upon exercise
of stock purchase warrants. The shares include any additional shares issued
to prevent dilution resulting from stock splits, stock dividends or similar
transactions.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. The
selling shareholder 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 of sale is not
permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 7, 2002 PROSPECTUS
WEBB INTERACTIVE SERVICES, INC.
This is a public offering of a maximum of 3,689,680 shares of common
stock of Webb Interactive Services, Inc., including 3,321,875 shares which are
reserved for issuance under convertible preferred stock and upon the exercise of
stock purchase warrants. All of the shares are being offered for sale by Castle
Creek Technology Partners LLC. We will not receive any of the proceeds from the
offer and sale of the common stock.
The Nasdaq National Market lists our common stock under the symbol WEBB.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. YOU SHOULD NOT PURCHASE
OUR COMMON STOCK UNLESS YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. SEE
"RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
Because Castle Creek Technology Partners LLC will offer and sell the
shares at various times, we have not included in this prospectus information
about the price to the public of the shares or the proceeds to Castle Creek
Technology Partners LLC.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED ON THE
ADEQUACY OF THE DISCLOSURES IN THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is February __, 2002
WEBB INTERACTIVE SERVICES, INC.
Webb is the founder and the majority stockholder of Jabber, Inc., a company
in the early stages of building a business around commercializing open-source
instant messaging software products and services. We formed Jabber, Inc. in
February 2000 to commercialize the Jabber.org instant messaging system begun in
1998 by Jeremy Miller, the founder of this open-source movement. We became the
commercial sponsor of the Jabber.org open-source movement in September 1999 when
Mr. Miller began his employment with us.
Before October 16, 2001, we were also engaged in developing software
products and services designed to assist small businesses in developing,
maintaining and strengthening local buyer-seller relationships. This business
was terminated on October 16, 2001 as we were unable to obtain financing for
this business on acceptable terms and market conditions for these products and
services were continuing to develop at a slower rate than we had anticipated.
Our business plan for Jabber, Inc. includes developing strategic
relationships with companies who have a long-term interest in the development of
products and services utilizing instant messaging. Under a July 17, 2001 stock
purchase agreement with Jabber and us, France Telecom Technologies
Investissements has acquired approximately 22% of Jabber for an investment of $5
million and may acquire another 7% of Jabber for an additional $2 million. On
January 31, 2002, we owned approximately 71% of Jabber.
We were incorporated under the laws of Colorado on March 22, 1994. Our
executive offices are located at 1899 Wynkoop, Suite 600, Denver, Colorado
80202, telephone number (303) 296-9200.
RECENT DEVELOPMENTS
SALE OF SECURITIES TO JONA, INC. On January 17, 2002, we sold 1,100,000
units of our securities to Jona, Inc. for $1,100,000. Each unit consists of one
share of common stock and one warrant to purchase an additional share of common
stock at an exercise price of $1.00 per share. If approved by our shareholders,
Jona, Inc. will purchase an additional 3,900,000 units for $3,900,000, and will
have the option to purchase up to 2,500,000 additional units for $2,500,000 on
or before August 31, 2002. We have scheduled a special shareholders meeting for
March 5, 2002 to seek approval of the sale of the additional units to Jona, Inc.
At the time Jona, Inc. agreed to purchase the units, it loaned us $900,000
at an interest rate of 10% per year. Jona, Inc. had also loaned us $300,000 at
an interest rate of 10% on December 21, 2001. The principal and accrued interest
under these loans is payable on demand anytime after April 30, 2002. The
repayment of these loans is secured by 4,800,000 shares of series C convertible
preferred stock of Jabber, Inc. which we own. We issued Jona, Inc. a warrant to
purchase 60,000 shares of our common stock at an exercise price of $1.00 per
share as part of the $300,000 loan.
EXCHANGE OF SECURITIES BY CASTLE CREEK. At the same time we agreed to sell
the units to Jona, Inc., Castle Creek Technology Partners LLC agreed to exchange
up to 2,500 shares of series C-1 convertible preferred stock and $1,212,192 of
principal of our 10% convertible promissory notes for up to 4,484 of our series
D junior convertible preferred stock and a warrant to purchase 750,000 shares of
our common stock at an exercise price of $1.00 per share. As part of the
agreement, we reduced the exercise price of existing warrants to purchase
650,116 shares of our common stock held by Castle Creek. The exercise price for
these warrants is now $1.00. The 4,484 shares of series D junior convertible
preferred stock are convertible into 4,484,000 shares of our common stock. If we
had not reached the agreement to exchange the series C-1 convertible preferred
stock and the 10% convertible promissory notes, these securities would have been
convertible into 3,712,192 shares of our common stock and Castle Creek would
have been entitled to an additional warrant for 2,500,000 shares at an exercise
price of $1.00 per share. We intend to use $720,000 of the proceeds received
from the sale of the 3,900,000 units to Jona, Inc. to make a partial repayment
of principal on the 10% convertible promissory notes. At that time, Castle Creek
has agreed to exchange the remaining principal balance of the notes into shares
of series D junior convertible preferred stock. In December 2001, Castle Creek
converted and exchanged all of the 450.205 shares of our series B-2 convertible
preferred stock it owned for 450,205 shares of our common stock.
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TERMINATION OF ACCELX BUSINESS. On October 16, 2001, we terminated
our AccelX local commerce business, granted a license for software used in this
business to Nextron Communications, Inc. for a license fee of $1 million and
sold assets used in this business to Nextron Communications for an initial
purchase price of $500,000. If Nextron Communications completes a financing for
at least $2 million by June 30, 2002, then Nextron Communications will pay us an
additional $350,000 for the assets. If the financing transaction is not
completed by June 30, 2002, then we will not receive any additional
consideration for the assets. We have recorded a loss in 2001 of $1,020,000
because of the sale and termination of the AccelX business, primarily due to
non-cash expenses for impairment losses for goodwill and intangible assets
resulting from the acquisition of Update Systems, Inc. in 2000. Any additional
consideration will be recorded if payment is assured.
RISK FACTORS
OUR INDEPENDENT PUBLIC ACCOUNTANTS HAVE INDICATED THAT WE MAY NOT HAVE
SUFFICIENT CASH TO FUND FUTURE LOSSES FROM OPERATIONS. In the report issued by
our independent public accountants accompanying our financial statements for the
year ended December 31, 2000, they indicated there was substantial doubt about
our ability to continue as a going concern. Their report notes that, among
other factors affecting our ability to continue as a going concern, we have
incurred significant and recurring losses from operations and our operations
have used substantial amounts of cash. These losses are expected to continue
and we will require additional capital to fund these operating losses. The
availability of additional capital is uncertain. Our financial statements have
been prepared assuming that we will continue as a going concern and may be of
limited utility to an investor because they do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result should we be
unable to continue as a going concern.
Unless we are able to raise sufficient additional capital prior to the
issuance of the report of our independent public accountants accompanying our
financial statements for the year ended December 31, 2001, it is likely that
this report will include an indication of substantial doubt regarding our
ability to continue as a going concern.
OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO EVALUATE OUR BUSINESS.
We were founded in March 1994 and began sales in February 1995. Subsequently,
our business model has changed periodically to reflect changes in technology and
markets. We have a limited operating history for our current business model
upon which you may evaluate us. Our business is subject to the risks, exposures
and difficulties frequently encountered by early-stage companies with a limited
operating history including:
. Limited ability to respond to competitive developments;
. Exaggerated effect of unfavorable changes in general economic and market
conditions;
. Limited ability to adjust our business plan to address marketplace and
technological changes; and
. Difficulty in obtaining operating capital.
WE EXPECT TO INCUR NET LOSSES INTO 2003. We have incurred net losses since
we began our business totaling approximately $113.1 million through September
30, 2001, including approximately $59.7 million of non-cash expenses. We
incurred additional substantial operating and net losses in the fourth quarter
of 2001 and expect to incur additional substantial operating and net losses in
2002, and do not expect to achieve positive cash flow from operations until at
least 2003. We expect to incur these additional losses because:
. We intend to incur capital expenditures and operating expenses in excess
of revenues of approximately $3 million during 2002 to cover the
increasing activities of Jabber, Inc.;
. We expect to spend approximately $1.2 million during 2002 to finance
operating expenses besides those for Jabber, Inc.; and
. We will incur significant non-cash expenses from current financing
transactions and may continue to incur significant non-cash expenses due
to financing and other equity-based transactions. The current competitive
business and capital environments likely will result in our issuance of
similar securities in future financing transactions.
IF WE ARE UNABLE TO RAISE ADDITIONAL WORKING CAPITAL, WE MAY NOT BE ABLE TO
SUSTAIN OUR OPERATIONS. Because our present cash and cash equivalents, working
capital and commitments for additional equity investments will, based on current
estimates, be adequate to sustain operations for Jabber, Inc. only until
March 31, 2002 and for
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our other operations until April 30, 2002, we will need to obtain additional
capital to fund our business. Operating expenses for Jabber, Inc. currently
exceed revenues by approximately $300,000 per month. Operating expenses for our
corporate activities, to be funded separately from those for Jabber, Inc., are
expected to be approximately $1.2 million per year. Secured note payables for
$1.2 million are due April 30, 2002 and convertible note payables for
approximately $2 million are due in August 2002. If we receive shareholder
approval, Jona, Inc. will purchase an additional 3,900,000 units of our
securities for $3,900,000. With the sale of these securities, we will have
sufficient funds to operate our Webb and Jabber operations until at least the
third quarter of 2002 and will pay the secured notes in full and partially repay
the convertible notes and the remaining principal of the convertible notes will
be exchanged for shares of our series D junior convertible preferred stock.
There is no assurance that we will be able to raise additional funds in amounts
required or upon acceptable terms. If we cannot raise additional funds when
needed, we may be required to curtail or scale back our operations or sell some
of our assets, including our stock in our Jabber subsidiary.
WE MAY NOT EARN REVENUES SUFFICIENT TO REMAIN IN BUSINESS. Our ability to
become profitable depends on whether we can sell our products and services for
more than it costs to produce and support them. Our future sales also need to
provide sufficient margin to support our ongoing operating activities. The
success of our revenue model will depend upon many factors including:
. The extent to which consumers and businesses use our products and
services; and
. The success of our distribution partners in marketing their products and
services.
Because of the new and evolving nature of the Internet, the early stage of
our Jabber products and our limited operating history, we cannot predict whether
our revenue model will prove to be viable, whether demand for our products and
services will materialize at the prices we expect to charge, or whether current
or future pricing levels will be sustainable.
IF THE INTERNET DOES NOT DEVELOP INTO A SIGNIFICANT SOURCE OF BUSINESS-
RELATED COMMUNICATION, THEN OUR BUSINESS WILL NOT BE SUCCESSFUL. Our business
plan assumes that the Internet will develop into a significant source of
business-related communication and communication interactivity. However, the
Internet market is new and rapidly evolving and there is no assurance that the
Internet will develop in this manner. If the Internet does not develop in this
manner, our business may not be successful.
WE MUST CONTINUALLY DEVELOP NEW PRODUCTS WHICH APPEAL TO OUR CUSTOMERS.
Our products are subject to rapid obsolescence and our future success will
depend upon our ability to develop new products and services that meet changing
customer and marketplace requirements. There is no assurance that we will be
able to successfully:
. Identify new product and service opportunities; or
. Develop and introduce new products and services to market in a timely
manner.
Even if we are able to identify new opportunities, our working capital
constraints limit our ability to pursue them. If we are unable to identify and
develop and introduce new products and services on a timely basis, demand for
our products and services will decline.
We must identify and develop markets for our products and services. A
suitable market for our products and services may not develop or, if it does
develop, it may take years for the market to become large enough to support
significant business opportunities. Even if we are able to successfully
identify, develop, and introduce new products and services there is no assurance
that a suitable market for these products and services will materialize. The
following factors could affect the success of our products and services and our
ability to address sustainable markets:
. The failure of our business plan to accurately predict the types of
products and services the future Internet marketplace will demand;
. Our limited working capital may not allow us to commit the resources
required to adequately support the introduction of new products and
services;
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. The failure of our business plan to accurately predict the estimated
sales cycle, price and acceptance of our products and services; or
. The development by others of products and services that makes our
products and services noncompetitive or obsolete.
THERE IS A LOT OF COMPETITION IN THE INTERNET MARKET WHICH COULD HURT OUR
REVENUES OR CAUSE OUR EXPENSES TO INCREASE. Our current and prospective
competitors include many companies, including Microsoft, Inc. and AOL Time
Warner, Inc., whose financial, technical, marketing and other resources are
substantially greater than ours. We may not have the financial resources,
technical expertise or marketing, sales and support capabilities to compete
successfully. The presence of these competitors in the Internet marketplace
could hurt our business by causing us to:
. Reduce the average selling price of our products and services; or
. Increase our spending on marketing, sales and product development.
We may not be able to offset the effects of price reductions or increases
in spending. Further, our financial condition may put us at a competitive
disadvantage relative to our competitors.
IT USUALLY TAKES A LONG TIME AND SIGNIFICANT EXPENSE BEFORE WE ARE ABLE TO
MAKE A SALE OF OUR PRODUCTS AND SERVICES TO A CUSTOMER. While our sales cycle
varies from customer to customer, it is long, typically ranging from two to six
months or more, and unpredictable. Our pursuit of sales leads typically
involves an analysis of our prospective customer's needs, preparation of a
written proposal, one or more presentations and contract negotiations. We often
provide significant education to prospective customers about the use and
benefits of our Internet technologies and services. Our sales cycle may also be
affected by a prospective customer's budgetary constraints and internal
acceptance reviews, over which we have little or no control.
OFFERING PROPRIETARY PRODUCTS BASED ON THE JABBER.ORG OPEN-SOURCE MOVEMENT
MAY JEOPARDIZE OUR RELATIONSHIP WITH OPEN-SOURCE COMMUNITIES. An important
element of the business model for our Jabber, Inc. subsidiary is based upon
Jabber's ability to offer proprietary products compatible with Jabber.org open-
source instant messaging systems. A key element of open-source software
development movements is that the software and its code be offered to other
developers and users free, provided that anyone who makes an improvement or
modification to the software and who intends to commercialize the improvement or
modification, makes them available for free to the community and other users.
If the Jabber.org open-source community or other open-source communities
withdraw their support for either Jabber, Inc. or Jabber instant messaging
products, demand for Jabber instant messaging products will likely decline.
WE MAY BE UNABLE TO REDUCE OUR EXPENSES IF SALES DO NOT OCCUR AS EXPECTED.
Because of our limited operating history, we do not have historical financial
data for a sufficient number of periods on which to base planned operating
expenses. Our expense levels are based in part on our expectations of future
sales and to a large extent are fixed. We typically operate with little backlog
and the sales cycles for our products and services may vary significantly. We
may be unable to adjust spending in a timely manner to compensate for any
unexpected sales shortfalls. If we were unable to so adjust, any significant
shortfall of demand for our products and services in relation to our
expectations would result in operating losses or reduced profitability.
Further, we intend to incur significant capital expenditures and operating
expenses to fund the operations of our Jabber, Inc. subsidiary. If these
expenditures are not subsequently followed by increased sales with substantial
margin, then we will need to raise additional capital to stay in business.
AN INVESTMENT IN OUR COMMON STOCK IS RISKY BECAUSE THE PRICE OF OUR STOCK
IS HIGHLY VOLATILE. Our common stock closed as high as $4.56 per share and as
low as $0.50 per share between January 31, 2001 and January 31, 2002.
Historically, the over-the-counter markets for securities such as our common
stock have experienced extreme price and volume fluctuations. Some of the
factors leading to this volatility include:
. Price and volume fluctuations in the stock market at large that do not
relate to our operating performance;
. Fluctuations in our quarterly revenue and operating results; and
. Increases in outstanding shares of common stock upon exercise or
conversion of derivative securities.
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These factors may continue to affect the price of our common stock in the
future.
WE HAVE ISSUED NUMEROUS OPTIONS, WARRANTS, AND CONVERTIBLE SECURITIES TO
ACQUIRE OUR COMMON STOCK THAT COULD HAVE A DILUTIVE EFFECT ON OUR SHAREHOLDERS.
As of January 31, 2002, we had issued warrants and options to acquire
approximately 7,552,000 shares of our common stock, exercisable at prices
ranging from $.65 to $34.94 per share, with a weighted average exercise price of
approximately $3.03 per share. We had also reserved 4,134,000 shares of common
stock for issuance upon conversion or exchange of our 10% convertible promissory
notes and series C-1 and D convertible preferred stock. If we receive
shareholder approval to sell additional units under a securities purchase
agreement entered into with an investor in January 2002, we will issue up to
6,400,000 additional shares of our common stock and warrants to purchase up to
6,400,000 additional shares of our common stock. During the terms of these
derivative securities, the holders will have the opportunity to profit from an
increase in the market price of our common stock with resulting dilution to the
holders of shares who purchased shares for a price higher than the applicable
exercise or conversion price. The increase in the outstanding shares of our
common stock because of the exercise or conversion of these derivative
securities could result in a significant decrease in the percentage ownership of
our common stock by current and future holders of our common stock.
THE SIGNIFICANT NUMBER OF SHARES ISSUABLE UPON CONVERSION OF OUR
CONVERTIBLE SECURITIES COULD MAKE IT DIFFICULT TO OBTAIN ADDITIONAL FINANCING.
4,134,000 shares of our common stock may be issued if our 10% notes and series
C-1 and D convertible preferred stock are converted or exchanged. We have
entered into an agreement with an investor which contemplates the sale of up to
6,400,000 shares of our common stock and warrants to purchase up to 6,400,000
shares of our common stock. The number of our shares issuable upon conversion
or exercise of our derivative securities could increase due to future
financings. Due to this significant potential increase in the number of our
outstanding shares of common stock, new investors may either decline to make an
investment in Webb due to the potential negative effect this additional dilution
could have on their investment or require that their investment be on terms at
least as favorable as the terms of the notes or convertible preferred stock. If
we are required to provide similar terms to obtain required financing in the
future, the onerous terms and significant dilution of these financings could be
perpetuated and significantly increased. The current price of our common stock
may make it difficult to raise capital because of the terms of the notes and the
convertible preferred stock. Issuances of common stock below $1.00 in future
financings would result in substantial additional shares being issued to Jona,
Inc. and to holders of our convertible securities, causing substantial dilution
to other shareholders.
FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD DEPRESS THE
PRICE OF OUR COMMON STOCK. Actual or potential future sales of substantial
amounts of common stock in the public market could depress the market price for
shares of our common stock and could impair the ability of purchasers of our
common stock to recoup their investment or make a profit. As of January 31,
2002, these shares consist of:
. Up to 4,134,000 shares issuable upon conversion of the 10% convertible
notes and series C-1 and D preferred stock; and
. Approximately 7,552,000 shares issuable to warrant and option holders.
. Up to 6,400,000 shares of our common stock and warrants to purchase up to
6,400,000 shares of our common stock are reserved for a sale of our
securities, subject to shareholder approval, under a securities purchase
agreement entered into with an investor in January 2002.
FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD LIMIT OUR
ABILITY TO RAISE CAPITAL. Actual or potential future sales of substantial
amounts of our common stock in the public by our officers and directors, and
upon exercise or conversion of derivative securities could affect our ability to
raise capital through the sale of equity securities.
THE TRADING VOLUME OF OUR COMMON STOCK MAY DIMINISH SIGNIFICANTLY IF OUR
COMMON STOCK IS DELISTED FROM THE NASDAQ NATIONAL MARKET. Although our shares
are traded on the Nasdaq National Market, there is no assurance that they will
remain eligible to be included on Nasdaq. At October 31, 2001, we failed to
meet either the tangible net worth or minimum stock price requirements for
continued listing on the Nasdaq stock market system. On November 13, 2001, we
received a determination from Nasdaq that we are subject to delisting. We filed
a notice of appeal of this determination and a hearing before the Nasdaq Listing
Qualifications Panel to consider our appeal was held on January 10, 2002. We
have recently provided the panel with additional information regarding our plan
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to regain compliance with all requirements for our common stock to continue to
be listed on the Nasdaq National Market. There can be no assurance that our
common stock will continue to be traded on the Nasdaq National Market. If our
common stock was no longer eligible for quotation on Nasdaq, it could become
subject to rules adopted by the Securities and Exchange Commission, regulating
broker/dealer practices in transactions in low-priced stocks. If our common
stock became subject to the penny stock rules, many brokers may be unwilling to
engage in transactions in our common stock because of the added regulation,
making it more difficult for purchasers of our common stock to dispose of their
shares.
THE ISSUANCE OF CONVERTIBLE SECURITIES HAS RESULTED IN SIGNIFICANT NON-CASH
EXPENSES WHICH HAS INCREASED SIGNIFICANTLY OUR NET LOSS APPLICABLE TO COMMON
SHAREHOLDERS. We recorded a non-cash expense of approximately $2.9 million as
additional interest expense for the nine months ended September 30, 2001 due to
the issuance of our 10% convertible notes in 1999. We also recorded a $2.9
million non-cash expense for the nine months ended September 30, 2001 for
preferred dividends due to the terms of our series C-1 issued during the first
quarter of 2001 and B-2 preferred stock issued during the first quarter of 2000.
We will incur significant additional non-cash expenses due to future financings
as well as in connection with the Jona, Inc. financing and the exchange of our
series C-1 convertible preferred stock and 10% convertible note payables for
shares of our series D junior convertible preferred stock.
PARENT ONLY FINANCIAL INFORMATION
The stock purchase agreement under which France Telecom Technologies
Investissements made an investment in our Jabber, Inc. subsidiary requires that
these investment proceeds be used only by Jabber and that they may not be used
to fund any of our other business activities. We believe that financial
information for Webb on a stand-alone basis could be beneficial to an investor's
understanding of Webb. Based on Jabber's capital structure, corporate
governance structure and Webb's voting rights, Webb has concluded that it
controls Jabber and has consolidated it in the accompanying financial
statements.
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CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF SEPTEMBER 30, 2001
(UNAUDITED)
WEBB JABBER ELIMINATIONS CONSOLIDATED
------------- ------------ -------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 63,966 $ 1,852,109 $ - $ 1,916,075
Restricted cash 475,000 - - 475,000
Accounts receivable, net - 191,535 - 191,535
Prepaid expenses 118,993 20,734 - 139,727
Notes receivable and accrued interest from Company
officers 178,498 - - 178,498
Intercompany receivable - 30,867 (30,867) (A) -
Short-term deposits and other current assets 6,106 - 6,106
------------- ------------ ------------ -------------
Total current assets 842,563 2,095,245 (30,867) 2,906,941
Investment in subsidiary (2,284,553) - 2,284,553 (B) -
Property and equipment, net 1,535,667 302,639 - 1,838,306
Intangible assets, net - 1,117,167 - 1,117,167
Deferred financing costs 334,931 - - 334,931
Other assets 46,362 46,362
Long-term assets in discontinued operations 1,436,000 - - 1,436,000
------------- ------------ ------------ -------------
Total assets $ 1,910,970 $ 3,515,051 $ 2,253,686 $ 7,679,707
============= ============ ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
10% convertible note payable, net $ 1,814,421 $ - $ - $ 1,814,421
Short-term notes payable, net 332,131 - - 332,131
Convertible note payable and accrued interest
payable - 102,134 - 102,134
Capital leases payable 117,915 - - 117,915
Accounts payable and accrued liabilities 1,045,035 258,192 40,812 (A) 1,344,039
Accrued salaries and payroll taxes payable 224,861 392,520 - 617,381
Accrued interest payable 51,840 - - 51,840
Intercompany payable 71,679 - (71,679) (A) -
Customer deposits and deferred revenue - 107,770 - 107,770
Current liabilities in discontinued operations, net 277,280 - - 227,280
------------- ------------ ------------ -------------
Total current liabilities 3,935,162 860,616 (30,867) 4,764,911
Commitments and contingencies
Minority interest in subsidiary - - 5,713,989 (C) 5,713,989
Stockholders' equity
Series C-1 convertible preferred stock 2,450,000 - - 2,450,000
Series B-2 convertible preferred stock 419,733 - - 419,733
Series A convertible preferred stock - 4,400,000 (4,400,000) (C) -
Series B convertible preferred stock - 4,938,989 (4,938,989) (C)
Series C convertible preferred stock - 8,131,600 (8,131,600) (C) -
Common stock 92,558,830 564,627 (564,627) (C) 92,558,830
Warrants and options 14,888,853 30,000 - 14,918,853
Deferred compensation (18,739) (37,200) 37,200 (D) (18,739)
Accumulated other comprehensive losses (3,986) - - (3,986)
Accumulated deficit (112,318,883) (15,373,581) 14,568,580 (E) (113,123,884)
------------- ------------ ------------ -------------
Total stockholders' equity (2,024,192) 2,654,435 (3,429,436) (2,799,193)
------------- ------------ ------------ -------------
Total liabilities and stockholders'
equity $ 1,910,970 $ 3,515,051 $ 2,253,686 $ 7,679,707
============= ============ ============ =============
8
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2001
(UNAUDITED)
WEBB JABBER ELIMINATIONS CONSOLIDATED
------------- ------------ ------------ -------------
Net revenues $ - $ 503,212 $ - $ 503,212
Cost of revenues - 665,019 - 665,019
------------- ------------ ------------ -------------
Gross margin - (161,807) - (161,807)
------------- ------------ ------------ -------------
Operating expenses:
Sales and marketing expenses - 739,209 - 739,209
Product development expenses - 2,172,192 - 2,172,192
General and administrative expenses 2,719,736 1,808,240 - 4,527,976
Depreciation and amortization 433,489 1,241,581 - 1,675,070
------------- ------------ ------------ -------------
3,153,225 5,961,222 - 9,114,447
------------- ------------ ------------ -------------
Loss from operations (3,153,225) (6,123,029) - (9,276,254)
Interest income 102,258 16,712 - 118,970
Loss from subsidiary (5,959,029) - 5,959,029 (F) -
Gain on disposal of property and equipment 1,330 - - 1,330
Gain on sale of Jabber securities 775,000 (775,000) (H) -
Other income (loss) 24,368 (2,452) - 21,916
Interest expense (3,063,183) (43,361) - (3,106,544)
------------- ------------ ------------ -------------
Loss from continuing operations (11,272,481) (6,152,130) 5,184,029 (12,240,582)
Loss from discontinued operations (6,725,968) - - (6,725,968)
------------- ------------ ------------ -------------
Net loss before minority interest (17,998,449) (6,152,130) 5,184,029 (18,966,550)
Minority interest in losses of subsidiary - - 251,090 (G) 251,090
------------- ------------ ------------ -------------
Net loss (17,998,449) (6,152,130) 5,435,119 (18,715,460)
Preferred stock dividends - (318,490) 260,501 (I) (57,989)
Accretion of preferred stock to redemption (2,856,627) - - (2,856,627)
value
------------- ------------ ------------ -------------
Net loss applicable to common stockholders $ (20,855,076) $ (6,470,620) $ 5,695,620 $ (21,630,076)
============= ============ ============ =============
9
CONSOLIDATING STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2001
(UNAUDITED)
WEBB JABBER ELIMINATIONS CONSOLIDATED
------------- ------------ ------------ -------------
Cash flows from operating activities:
Net loss $ (17,998,449) $ (6,152,130) $ 5,435,119 $ (18,715,460)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation expense 853,565 84,696 - 938,261
Amortization expense 1,503,637 1,156,885 - 2,660,522
Impairment loss 1,019,301 - - 1,019,301
Gain on sale of Jabber securities (775,000) 775,000 (H) -
Loss in subsidiary 5,959,029 - (5,959,029) (F) -
Minority interest in losses of subsidiary - - (251,090) (G) (251,090)
Stock and stock options issued for 366,105 261,090 - 627,195
services
Loss on sale and disposal of property
and equipment (1,330) - - (1,330)
Bad debt expense 40,373 26,700 - 67,073
Accrued interest payable on convertible
note payable - 43,134 - 43,134
Accrued interest income on notes (10,054) - - (10,054)
receivable
Interest expense on 10% convertible note
from beneficial conversion feature 2,394,234 - - 2,394,234
Notes payable issued for interest on 10%
convertible note payable 9,809 - - 9,809
Amortization of 10% convertible note
payable discount 118,155 - - 118,155
Amortization of short-term notes payable
discount 7,869 - - 7,869
Amortization of 10% convertible note
payable financing costs 337,394 - - 337,394
Changes in operating assets and liabilities:
Decrease in restricted cash 50,000 - - 50,000
(Increase) decrease in accounts 194,803 (65,966) - 128,837
receivable
(Increase) decrease in prepaid expenses 53,376 (7,829) - 45,547
Decrease in short-term deposits and
other assets 371,000 - - 371,000
(Decrease) increase in accounts payable
and accrued liabilities 253,025 (138,914) - 114,111
(Decrease) increase in accrued salaries
and payroll taxes payable (504,342) 71,135 - (433,207)
Decrease in accrued interest payable (11,175) - - (11,175)
(Decrease) increase in customer
deposits and deferred revenue (111,376) 107,770 - (3,606)
------------- ------------ ------------ -------------
Net cash used in operating activities (5,880,051) (4,613,429) - (10,493,480)
------------- ------------ ------------ -------------
Cash flows from investing activities:
Proceeds from the sale of property and 22,293 - - 22,293
equipment
Cash advances to subsidiary or parent (2,327,770) - 2,327,770 (A) -
Purchase of property and equipment (75,159) (123,562) - (198,721)
Collection of (advance for) notes
receivable from Company officers 30,000 - - 30,000
------------- ------------ ------------ -------------
Net cash used in investing activities (2,350,636) (123,562) 2,327,770 (146,428)
------------- ------------ ------------ -------------
Cash flows from financing activities:
Payments on capital leases (109,961) - - (109,961)
Cash investment from Webb - 2,327,770 (2,327,770) (A) -
Proceeds from exercise of stock options
and warrants 24,219 - - 24,219
Proceeds from short-term notes payable 340,000 - - 340,000
10
Proceeds from issuance of convertible
note payable - 2,500,000 - 2,500,000
Proceeds form sale of Jabber securities 775,000 1,750,000 - 2,525,000
Proceeds from issuance of series C-1
preferred stock and warrant 2,500,000 - - 2,500,000
Short-term notes payable financing costs (21,000) - (21,000)
Preferred stock cash offering costs (50,000) - - (50,000)
------------- ------------ ------------ -------------
Net cash provided by financing activities 3,458,258 6,577,770 (2,327,770) 7,708,258
------------- ------------ ------------ -------------
Net (decrease) increase in cash and cash (4,772,429) 1,840,779 - (2,931,650)
equivalents
Effect of foreign currency exchange rate
changes on cash (5,357) - - (5,357)
Cash in discontinued operations (3,604) - - (3,604)
Cash and cash equivalents, beginning of 4,845,356 11,330 - 4,856,686
period
------------- ------------ ------------ -------------
Cash and cash equivalents, end of period $ 63,966 $ 1,852,109 $ - $ 1,916,075
============= ============ ============ =============
Eliminating Entries:
(A) Eliminate inter-company receivable and payable and cash invested by Webb in
Jabber
(B) Eliminate Webb's investment in Jabber
(C) Eliminate Jabber issued securities and preferred stock dividends and record
minority interest for preferred stock
(D) Eliminate Jabber deferred compensation for unvested common stock granted to
employees and third parties
(E) Eliminate Webb's share of Jabber's accumulated deficit and record the sale
of Webb owned Jabber securities as minority interest
(F) Eliminate Webb's share of Jabber's losses
(G) Record minority shareholders' share of Jabber's net assets calculated as
the value of common stock vested during the nine months ended September 30,
2001
(H) Eliminate gain from the sale of Jabber securities owned by Webb and reflect
value of securities as minority interest
(I) Eliminate preferred stock dividends on preferred stock owned by Webb
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
Some of the statements made in this prospectus and the documents
incorporated by reference in this prospectus under "Webb Interactive Services,
Inc." and "Risk Factors" and elsewhere constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to the safe harbor provisions of the act. Forward-
looking statements may be identified by the use of terminology such as may,
will, expect, anticipate, intend, believe, estimate, should, or continue or
other variations on these words or comparable terminology. Where this
prospectus contains forward-looking statements, you should be aware that our
actual financial condition, operating results and business performance may
differ materially from that projected or estimated by us in the forward-looking
statements. We have attempted to identify, in context, some of the factors that
we believe may cause actual future experience and results to differ from their
current expectations.
USE OF PROCEEDS
Castle Creek Technology Partners LLC is offering all of the shares to be
sold. We will not receive any of the proceeds from the offer and sale of the
shares of common stock. However, 921,875 of the shares are issuable
11
upon the exercise of a stock purchase warrants at exercise prices between $.766
and $1.00 per share. If this warrant is exercised in full, we will receive gross
proceeds of $881,656.25.
SELLING SHAREHOLDER
The common stock covered by this prospectus consists of:
. 2,400,000 shares issuable upon the conversion or exchange of our
series D junior convertible preferred stock;
. 921,875 shares issuable upon the exercise or exchange of stock purchase
warrants; and
. 367,805 shares of common stock held by the selling shareholder.
Castle Creek Technology Partners LLC acquired 1,500 shares of series D
junior convertible preferred stock and a warrant to purchase 750,000 shares of
common stock at an exercise price of $1.00 per share on January 31, 2002 in
exchange for 1,500 shares of its series C-1 convertible preferred stock. Castle
Creek Technology Partners LLC purchased 2,500 shares of the series C-1
convertible preferred stock from us, and a warrant to purchase 500,000 shares of
common stock, for $2,500,000 on February 28, 2001. Castle Creek is required to
exchange the remaining shares of the series C-1 convertible preferred stock it
owns (currently 650 shares) at the time the registration statement containing
this prospectus is declared effective by the Securities and Exchange Commission.
If our shareholders approve the sale of the additional units to Jona, Inc., then
we will redeem $720,000 principal amount of our 10% convertible promissory notes
and Castle Creek Technology Partners LLC will exchange the remaining principal
balance owed to it under our 10% convertible promissory notes for 1,984 shares
of the series D junior convertible preferred stock. Castle Creek Technology
Partners LLC acquired the 10% convertible promissory notes during 1999. Castle
Creek acquired the 367,805 shares of common stock upon the conversion and
exchange of 350.205 shares of our series B-2 convertible preferred stock and the
conversion of 17.6 shares of our series C-1 convertible preferred stock.
The number of shares that actually may be sold will be determined by Castle
Creek Technology Partners LLC. Because Castle Creek Technology Partners LLC may
sell all, some or none of the shares of common stock which it holds, and because
this offering is not being underwritten, no estimate can be given of the number
of shares of common stock that will be held by Castle Creek Technology Partners
LLC upon termination of the offering.
The following table provides information as of January 31, 2002, about
Castle Creek Technology Partners LLC, including:
. Its beneficial ownership of common stock; and
. The maximum number of shares of common stock offered.
The information presented is based on data furnished to us by Castle Creek
Technology Partners LLC.
Under the exchange agreement, we are required to register for resale by
Castle Creek Technology Partners LLC 4,884,000 shares of our common stock. This
amount is based upon the number of shares:
. Issuable upon the conversion or exchange of our series D junior
convertible preferred stock (4,134,000 shares); and
. Issuable upon the exercise or exchange of a stock purchase warrant
(750,000 shares).
Castle Creek has agreed to registration of 3,689,680 shares based on the
availability of Rule 144(k) for the sale of the other shares otherwise required
to be registered.
Under the terms of the convertible preferred stock and the warrant, each is
convertible or exercisable by Castle Creek Technology Partners LLC up to that
number of shares, including the number of shares of common stock owned by Castle
Creek Technology Partners LLC, that would not exceed 4.99% of the then
outstanding shares of our common stock as determined under section 13(d) of the
Securities Exchange Act of 1934. This limit does not include unconverted or
unexercised shares under the convertible preferred stock or the warrant.
Because of this limitation, the number of shares of common stock contained in
the third and fourth columns in the following table for Castle Creek Technology
Partners LLC exceeds the number of shares of common stock that Castle Creek
Technology Partners LLC beneficially owns under section 13(d) as of January 31,
2002. This 4.99% limit may not
12
prevent Castle Creek Technology Partners LLC from converting all of its
convertible preferred stock or the convertible promissory notes, or exercising
its warrants, because Castle Creek Technology Partners LLC can convert the
convertible preferred stock or the convertible promissory notes, or exercise the
warrants into 4.99% of our outstanding common stock, then sell all of that stock
to permit it to engage in further conversions or exercises. The 4.99% limit does
not prevent Castle Creek Technology Partners LLC from selling more than 4.99% of
our common stock.
Shares of Common Stock Owned
Shares Of Common Before Offering Plus Maximum Maximum Number Shares of Common
Stock Owned Number of Shares Which Can Be of Shares Offered Stock Owned
Selling Beneficially Before Acquired Over the Life of Under This Beneficially After
Shareholder Offering (%) Securities Owned (%) Prospectus (%) Offering (%)
- --------------------------------------------------------------------------------------------------------------------------------
Castle Creek 652,240 (4.99%) 6,377,037 (33.9%)(2) 3,689,680 (19.6%) 821,991 (4.4%) (3)
Technology
Partners LLC (1)
(1) Shares beneficially owned include 367,805 common shares held and 3,321,875
shares issuable upon conversion or exercise of outstanding securities. Castle
Creek Technology Partners LLC's address is 111 West Jackson Blvd., Suite 2020,
Chicago, Illinois 60604. Castle Creek Technology Partners LLC beneficially owns
652,240 shares of common stock, determined under Rule 13d-3, and disclaims
beneficial ownership of any shares other than these shares. Castle Creek
Technology Partners LLC acquired its securities in the ordinary course of its
business and at the time of its purchase of these securities, it had no
understandings, directly or indirectly with any person to distribute the
securities. As an investment manager under a management agreement, Castle Creek
Partners, LLC may be considered to beneficially own the securities held by
Castle Creek Technology Partners LLC. Castle Creek Partners, LLC disclaims this
beneficial ownership. Daniel Asher, as a managing member of Castle Creek
Partners, LLC, may hold voting and dispositive powers over these securities and
may be considered to be the beneficial owner. Mr. Asher disclaims this
beneficial ownership.
(2) Includes:
. 650,000 shares issuable upon conversion of the series C-1 convertible
preferred stock and assumes a conversion price of $1.00;
. 1,500,000 shares issuable upon conversion of the series D-1
convertible preferred stock and assumes a conversion price of $1.00;
. 1,984,000 shares issuable upon conversion or exchange of the 10%
convertible promissory notes and assumes a conversion rate of $1.00
per share;
. 131,366 shares issuable upon conversion of interest accruing under
the 10% convertible promissory notes from January 1, 2002 through
August 25, 2002, and assumes a conversion rate of $1.00 per share and
that all interest is paid in additional notes;
. 1,743,866 shares issuable upon the exercise of stock purchase
warrants. No consideration has been given to the antidilution
provisions in the warrants since any events which could cause the
antidilution provisions to take effect are not known; and
. 367,805 shares of common stock held by Castle Creek Technology
Partners LLC.
(3) Assumes the sale of all shares offered for sale by this prospectus.
PLAN OF DISTRIBUTION
The sale of the shares offered by this prospectus may be made in the Nasdaq
National Market or other over-the-counter markets at prices and at terms then
prevailing or at prices related to the then current market price or in
negotiated transactions. These shares may be sold by one or more of the
following:
13
. A block trade in which the broker or dealer will attempt to sell
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction.
. Purchases by a broker or dealer as principal and resale by a broker
or dealer for its account using this prospectus.
. Ordinary brokerage transactions in which the broker does not solicit
purchasers and transactions in which the broker does solicit
purchasers.
. Transactions directly with a market maker.
. In privately negotiated transactions not involving a broker or
dealer.
Each sale may be made either at market prices prevailing at the time of the
sale, at negotiated prices, at fixed prices which may be changed, or at prices
related to prevailing market prices.
Castle Creek Technology Partners LLC may also resell all or a portion of
the shares offered by this prospectus in open market transactions in reliance
upon Section 4(1) of the Securities Act or Rule 144 under the Securities Act
rather than by this prospectus.
Castle Creek Technology Partners LLC has a short position in shares of
our common stock. Castle Creek Technology Partners LLC has confirmed to us that
none of the shares covered by this registration statement will be used to cover
any portion of this short position. Castle Creek Technology Partners LLC has
also confirmed to us that it will not take any action to cover any portion of
this short position during any period when it is engaged in a distribution of
the shares under this prospectus within the meaning of Regulation M under the
Securities Act of 1934.
Brokers or dealers engaged by Castle Creek Technology Partners LLC to sell
the shares may arrange for other brokers or dealers to participate. Brokers or
dealers engaged to sell the shares will receive compensation in the form of
commissions or discounts in amounts to be negotiated immediately before each
sale. These brokers or dealers and any other participating brokers or dealers
may be determined to be underwriters within the meaning of the Securities Act of
1933. We will receive no proceeds from any resales of the shares offered by
this prospectus, and we anticipate that the brokers or dealers, if any,
participating in the sales of the shares will receive the usual and customary
selling commissions.
Castle Creek Technology Partners LLC may enter into hedging transactions.
Persons with whom they enter into hedging transactions may engage in short sales
of our common stock. Castle Creek Technology Partners LLC may engage in short
sales of our common stock and transactions involving options, swaps, derivatives
and other transactions involving our securities or its investments in those
securities, and may sell and deliver the shares covered by this prospectus under
agreements to undertake these transactions or in settlement of securities loans.
These transactions may be entered into with broker-dealers or other financial
institutions that may resell those shares. Castle Creek Technology Partners LLC
may pledge its shares to secure borrowings. Upon delivery of the shares or a
default by Castle Creek Technology Partners LLC, the broker-dealer or financial
institution may offer and sell the pledged shares.
To comply with the securities laws of some states, if applicable, the
shares will be sold in those states only through brokers or dealers. The shares
may not be sold in some states unless they have been registered or qualified for
sale in those states or an exemption from registration or qualification is
available and is complied with.
If necessary, the specific shares of our common stock to be sold, the name
of the selling shareholder, the purchase and public offering prices, the names
of any agent, dealer or underwriter, and any applicable commissions or discounts
will be disclosed in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus
is a part.
We entered into a registration agreement as a requirement of the private
placement of the series C-1 convertible preferred stock. The registration
agreement requires us to register the underlying shares of our common stock
under applicable federal and state securities laws, and the other shares of
common stock being offered in this prospectus. The registration agreement
provides for cross-indemnification of Castle Creek Technology Partners LLC and
us and each party's directors, officers and controlling persons against
liability for the offer and sale of the common stock, including liabilities
under the Securities Act of 1933, and to contribute to payments the parties may
14
be required to make. We have agreed to indemnify and hold harmless Castle Creek
Technology Partners LLC from liability under the Securities Act of 1933.
The rules and regulations in Regulation M under the Securities Exchange Act
of 1934, provide that during the period that any person is engaged in the
distribution within the meaning of Regulation M of our common stock, that person
usually may not purchase shares of our common stock. Castle Creek Technology
Partners LLC is subject to the rules and regulations of the Securities Act of
1933 and Securities Exchange Act of 1934 including Regulation M, which may limit
the timing of purchases and sales of shares of the common stock by Castle Creek
Technology Partners LLC. The prohibition on purchases under Regulation M may
include purchases to cover short positions by Castle Creek Technology Partners
LLC, and the failure by Castle Creek Technology Partners LLC to cover a short
position at a lender's request and purchases by the lender in the market of
shares to cover such a short position may constitute an inducement to buy those
shares prohibited by Regulation M. This may affect the marketability of the
common stock.
We will bear all expenses of the offering of the common stock, except that
Castle Creek Technology Partners LLC will pay any applicable underwriting
commissions and expenses, brokerage fees and transfer taxes, and the fees and
disbursements of its counsel and experts.
DESCRIPTION OF SECURITIES
GENERAL
Our articles of incorporation authorize our board of directors to issue
65,000,000 shares of capital stock, including 60,000,000 shares of common stock
and 5,000,000 shares of preferred stock, with rights, preferences and privileges
as are determined by our board of directors.
COMMON STOCK
As of January 31, 2002, we had 12,786,522 shares of common stock
outstanding. All outstanding shares of our common stock are fully paid and non-
assessable and the shares of our common stock offered by this prospectus will
be, upon issuance, fully paid and non-assessable. The following is a summary of
the material rights and privileges of our common stock.
VOTING. Holders of our common stock are entitled to cast one vote for each
share held at all shareholder meetings for all purposes, including the election
of directors. The holders of more than 50% of the voting power of our common
stock issued and outstanding and entitled to vote and present in person or by
proxy, and any preferred stock issued and outstanding and entitled to vote and
present in person or by proxy, constitute a quorum at all meetings of our
shareholders. The vote of the holders of a majority of our common stock present
and entitled to vote at a meeting, and any preferred stock present and entitled
to vote at a meeting, will decide any question brought before the meeting,
except when Colorado law, our articles of incorporation, or our bylaws require a
greater vote and except when Colorado law requires a vote of any preferred stock
issued and outstanding, voting as a separate class, to approve a matter brought
before the meeting. Holders of our common stock do not have cumulative voting
for the election of directors.
DIVIDENDS. Holders of our common stock are entitled to dividends when, as
and if declared by the board of directors out of funds available for
distribution. The payment of any dividends may be limited or prohibited by loan
agreement provisions or priority dividends for preferred stock that may be
outstanding.
PREEMPTIVE RIGHTS. The holders of our common stock have no preemptive
rights to subscribe for any additional shares of any class of our capital stock
or for any issue of bonds, notes or other securities convertible into any class
of our capital stock.
LIQUIDATION. If we liquidate or dissolve, the holders of each outstanding
share of our common stock will be entitled to share equally in our assets
legally available for distribution to our shareholders after payment of all
15
liabilities and after distributions to holders of preferred stock legally
entitled to be paid distributions before the payment of distributions to holders
of our common stock.
SERIES C-1 CONVERTIBLE PREFERRED STOCK
On February 28, 2001, we issued 2,500 shares of our series C-1
convertible preferred stock and warrants to acquire 500,000 shares of our common
stock to Castle Creek Technology Partners LLC for a cash investment of
$2,500,000. Castle Creek converted 350 shares into 350,000 shares of common
stock and exchanged 1,500 of these shares on January 31, 2002 for 1,500 shares
of our series D junior convertible preferred stock. It has agreed to exchange
the remaining shares of the series C-1 convertible preferred stock it owns for
an equal number of shares of our series D junior convertible preferred stock at
the time the Securities and Exchange Commission declares effective the
registration statement containing this prospectus. The conversion price for the
series C-1 convertible preferred stock is $1.00. The series C-1 convertible
preferred stock does not bear dividends and does not entitle the holder to any
voting rights except as required by Colorado law.
The following is a summary of the material terms of the series C-1
convertible preferred stock:
CONVERSION. The preferred stock is convertible into common stock unless
the conversion would result in the holder being a beneficial owner of more than
4.99% of our common stock. The current conversion price is $1.00 per share.
The conversion price is also subject to anti-dilution protection if we
issue our common stock at prices less than the conversion price for the
preferred stock or the then current price for our common stock and for stock
splits, stock dividends and other similar transactions. If the conversion price
is reduced, we may be required to record a charge to income.
REDEMPTION. The holder of the preferred stock has the right to require us
to redeem its shares of preferred stock if we:
. do not have a sufficient number of shares of our common stock
available for the conversion of the preferred stock for any reason;
. fail in any material respect to comply with the terms of the
preferred stock or the purchase agreement under which the preferred
stock was sold; or
. our common stock ceases to be quoted on the Nasdaq Stock Market
because of any willful action or failure on our part.
The redemption price would be equal to the greater of $1,250 per share of
preferred stock or the market value of the preferred stock based on the then
market value for our common stock.
LIQUIDATION PREFERENCE. If we liquidate, dissolve or wind-up our business,
whether voluntarily or involuntarily, after we pay our debts and other
liabilities, the holder of the preferred stock will be entitled to receive from
our remaining net assets, before any distribution to the holders of our common
stock, the amount of $1,000 per share.
REGISTRATION RIGHTS. The agreement under which the series C-1 preferred
stock was issued requires us to file with the Securities and Exchange Commission
a registration statement for the resale of the shares issuable upon conversion
of this preferred stock and the other shares of common stock being offered for
sale by Castle Creek Technology Partners LLC under this prospectus. The
agreement under which the series C-1 preferred stock was issued also requires us
to use our best efforts to keep the registration statement effective until all
of the registered shares have been resold or can be sold immediately without
compliance with the registration requirements of the Securities Act of 1933
under Rule 144.
16
SERIES D JUNIOR CONVERTIBLE PREFERRED STOCK
As of January 31, 2002, we had 1,500 shares of series D junior convertible
preferred stock outstanding. On that date, we issued 1,500 shares of series D
junior convertible preferred stock to Castle Creek Technology Partners LLC in
exchange for 1,500 shares of our series C-1 convertible preferred stock. On the
date that the registration statement which contains this prospectus is declared
effective by the Securities and Exchange Commission, Castle Creek will exchange
the remaining shares of series C-1 convertible preferred stock owned by it
(currently 650 shares) for an equal number of series D junior convertible
preferred stock. If our shareholders approve the sale of additional units to
Jona, Inc., Castle Creek will acquire an additional 1,984 shares of series D in
exchange for $1,212,912 of principal of our 10% convertible promissory notes.
The series D junior convertible preferred stock does not bear dividends and does
not entitle the holders to any voting rights except as required by Colorado law.
The following is a summary of the material terms of the series D junior
convertible preferred stock.
CONVERSION. The preferred stock is convertible into common stock unless
the conversion would result in the holder being a beneficial owner of more than
4.99% of our common stock. The current conversion price is $1.00 per share.
The conversion price is also subject to anti-dilution protection if we
issue our common stock at prices less than the conversion price for the
preferred stock or the then current price for our common stock and for stock
splits, stock dividends and other similar transactions. If the conversion price
is reduced, we may be required to record a charge to income.
LIQUIDATION PREFERENCE. If we liquidate, dissolve or wind-up our business,
whether voluntarily or involuntarily, after we pay our debts and other
liabilities, the holder of the preferred stock will be entitled to receive from
our remaining net assets, before any distribution to the holders of our common
stock, the amount of $1,000 per share.
10% CONVERTIBLE PROMISSORY NOTES
On August 25, 1999, we issued to Castle Creek Technology Partners LLC a
three-year 10% convertible promissory note in the amount of $5,000,000. On
December 18, 1999, the terms of the promissory note were amended. On February
18, 2000, one-half of the principal amount of the note was converted into
248,262 shares of common stock at a conversion price of $10.07 per share.
During 2000, an aggregate of $164,110 principal amount of similar 10%
convertible notes were issued to pay interest on the note. In July 2001, Castle
Creek converted a portion of the 10% convertible notes into 42,652 shares of our
common stock. As of January 31, 2002, we had a total of $1,932,192 principal
amount of the 10% convertible notes outstanding, which is convertible into
1,932,192 shares of our common stock. For the period from January 1, 2002
through the maturity date of the notes, August 25, 2002, additional interest
will accrue in the amount of $131,366 assuming the interest is paid in
additional notes. If paid in cash, the interest will be lower due to the
absence of compounding. Upon the issuance of additional convertible promissory
notes to pay this interest, an additional 131,366 shares of common stock would
be issuable upon conversion of the notes. If our shareholders approve the sale
of additional units to Jona, Inc., we will use $720,000 of the proceeds to
partially repay the principal balance of the promissory notes, and Castle Creek
will exchange the remaining principal balance under the 10% convertible
promissory notes ($1,212,192) for 1,984 shares of our series D junior
convertible preferred stock. The following is a summary of the material terms
of the promissory notes.
CONVERSION PRICE. The convertible promissory notes are convertible into
shares of common stock at a conversion price of $1.00 per share.
REDEMPTION. We can prepay the promissory notes at any time, if the closing
bid price for our common stock for 20 consecutive trading days is at least 200%
of the conversion price then in effect. The redemption price would equal 115%
of the face amount of the convertible notes, plus accrued and unpaid interest.
17
INTEREST. The promissory notes bear interest at an annual rate of 10%.
The holder has the option to elect to receive interest payments in the form of
cash, common stock or a promissory note. If the market value of our common
stock is above $1.00, the issuance of notes to pay interest would result in an
effective interest rate of more than 10%.
WARRANT ISSUED WITH SERIES D JUNIOR CONVERTIBLE PREFERRED STOCK
On January 17, 2002, we issued Castle Creek Technology Partners LLC a five-
year warrant to purchase 750,000 shares of our common stock as part of the
exchange of our series C-1 convertible preferred stock owned by castle Creek for
our series D junior preferred convertible stock. The exercise price for the
warrant is currently $1.00 per share. The exercise price for the warrant is
also subject to anti-dilution protection if we issue our common stock at prices
less than the exercise price for the warrant and for stock splits, stock
dividends and other similar transactions. If the warrant price is reset, we may
record additional charges to income. The warrant is subject to early expiration
for one-third of the shares if our common stock trades at $2.00 or more for five
consecutive days and for an additional one-third of the shares if our common
stock trades at $3.00 or more for five consecutive days.
WARRANTS ISSUED WITH SERIES B CONVERTIBLE PREFERRED STOCK
Castle Creek Technology Partners LLC owns five-year warrants to purchase
343,750 shares of our common stock, which were issued on February 18, 2000. The
exercise price for the warrants is currently $0.766 per share. During the first
three years of the warrants, the exercise price is subject to adjustment at the
end of each ninety-day period following the issuance of the warrants. During
this period, the exercise price at the end of each ninety-day period will be
adjusted if the market price for our common stock is less than the exercise
price of the warrants, so that the exercise price will equal the market price
for our common stock. The exercise price of the warrants is also subject to
anti-dilution protection if we issue our common stock at prices less than the
exercise price for the warrants and for stock splits, stock dividends and other
similar transactions. If the warrant price is reset, we may record additional
charges to income. The warrants may be subject to early expiration if the
market price for our common stock exceeds $40.81 for 20 consecutive trading
days.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file with the SEC at the SEC's public reference room located at
450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-
SEC-0330 for further information on the operation of the public reference room.
You can also obtain copies of this material from the SEC's Internet site located
at http://www.sec.gov.
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, file no. 0-28462:
. Our annual report on Form 10-KSB for the year ended December 31,
2000, filed on April 2, 2001 and amended on August 24, 2001.
. Our quarterly report on Form 10-QSB for the quarter ended
September 30, 2001, filed on November 14, 2001.
. Our quarterly report on Form 10-QSB for the quarter ended June 30,
2001, filed on August 20, 2001 and amended on October 31, 2001.
. Our quarterly report on Form 10-QSB for the quarter ended March 31,
2001, filed on May 16, 2001 and amended on August 20, 2001.
. Our preliminary proxy statement for the March 6, 2002 special
meeting of shareholders, filed on February 4, 2002.
18
. Our definitive proxy statement for the 2001 annual meeting of
shareholders filed on April 18, 2000.
. The description of our common stock contained in our registration
statement on Form 8-A filed with the SEC on May 22, 1996.
. Our current report on Form 8-K filed on January 22, 2002 and amended
on January 29, 2002.
. Our current report on Form 8-K filed on November 29, 2001.
. Our current report on Form 8-K filed November 1, 2001.
. Our current report on Form 8-K filed August 1, 2001.
. Our current report on Form 8-K filed May 10, 2001.
. Our current report on Form 8-K filed March 1, 2001.
Besides the filings listed above, all other filings filed by us with the
SEC under the Securities Exchange Act of 1934 after the date of the registration
statement filed on February 4, 2002 and before the effectiveness of the
registration statement will be incorporated by reference into this prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and telephone number:
Shareholder Services
Webb Interactive Services, Inc.
1899 Wynkoop
Suite 600
Denver, Colorado 80202
(303) 308-3227
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different
information. Castle Creek Technology Partners LLC will not make an offer of
these shares in any state where the offer is not permitted. You should not
assume that the information in this prospectus is accurate as of any date other
than the date on the front page of this prospectus.
LEGAL MATTERS
Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota, has
issued an opinion about the legality of the shares registered by this
prospectus. Lindley S. Branson, a principal of Gray, Plant, Mooty, Mooty &
Bennett, P.A., serves as our executive vice president, general counsel and as a
director. Mr. Branson holds 25,000 shares of our common stock, and options to
purchase an additional 744,813 shares.
EXPERTS
We have incorporated by reference in this prospectus our audited financial
statements as of December 31, 1999 and 2000 and for each of the two years in the
period ended December 31, 2000 along with Arthur Andersen LLP's audit report on
these financial statements. Arthur Andersen LLP issued the report as
independent accountants and as experts in auditing and accounting. Reference is
made to the report, which includes an explanatory paragraph regarding the
uncertainty about our ability to continue as a going concern as discussed in
note 1 to the financial statements.
INDEMNIFICATION
Our articles of incorporation provide that we shall indemnify, to the full
extent permitted by Colorado law, our directors, officers, employees or agents
who are made, or threatened to be made, a party to a proceeding against
judgments, penalties, fines, settlements and reasonable expenses if specified
standards are met. Although indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons under these provisions, we have been advised that, in the
opinion of the SEC, indemnification for
19
liabilities arising under the Securities Act of 1933 is against public policy as
expressed in the Securities Act and is unenforceable.
Our articles of incorporation also limit the liability of our directors to
the fullest extent permitted by the Colorado law. Specifically, our articles of
incorporation provide that our directors will not be personally liable for
monetary damages for breach of fiduciary duty as directors, except for:
. Any breach of the duty of loyalty to us or our shareholders;
. Acts or omissions not in good faith or that involved intentional
misconduct or a knowing violation of law;
. Dividends or other distributions of corporate assets that are in
contravention of specified statutory or contractual restrictions;
. Violations of specified laws; or
. Any transaction from which the director derives an improper
personal benefit.
20
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No dealer, salesperson or any other person
has been authorized to give any information or
to make any representations other than those
contained in this prospectus and, if given or
made, the information or representations must
not be relied upon as having been authorized
by us. This prospectus does not constitute an
offer to sell or the solicitation of any offer
to buy any security other than the securities
offered by this prospectus, nor does it
constitute an offer to sell or a solicitation
of any offer to buy the securities offered by
this prospectus by anyone in any jurisdiction
in which the offer or solicitation is not
authorized, or in which the person making the
offer or solicitation is not qualified to do
so, or to any person to whom it is unlawful to
make an offer or solicitation. Neither the WEBB INTERACTIVE
delivery of this prospectus nor any sale made SERVICES, INC.
under this prospectus shall, under any
circumstances, create any implication that
information contained in this prospectus is
correct as of any time after the date of this
prospectus.
_______________
TABLE OF CONTENTS
Page
----
Webb Interactive Services, Inc...................2
Recent Developments..............................2
Risk Factors.....................................3
Parent-Only Financial Information................7
Special Note About Forward-Looking Statements...11
Use of Proceeds.................................11 ---------------
Selling Shareholder.............................12
Plan of Distribution............................13 PROSPECTUS
Description of Securities.......................15
Where You Can Find More Information.............18 _______________
Legal Matters...................................19
Experts.........................................19
Indemnification.................................19
___________, 2002
================================================== ======================================================
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================================================== ======================================================
PART II
INFORMATION NOT REQUIRED TO BE IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth our various expenses in connection with the
sale and distribution of the shares being registered pursuant to this Form S-3
registration statement. All of the amounts shown are estimates, except for the
Securities and Exchange Commission registration fee and the Nasdaq listing fee.
We will pay all of such expenses.
Securities and Exchange Commission fee $ 254.59
Accounting fees and expenses 2,500.00
Legal fees and expenses 5,000.00
Printing, Mailing 1,000.00
Transfer Agent fees 1,000.00
Miscellaneous 2,245.41
----------
TOTAL $12,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation provide that we shall indemnify, to the full
extent permitted by Colorado law, any of our directors, officers, employees or
agents made or threatened to be made a party to a proceeding, by reason of the
fact that such person is or was a director, officer, employee or agent of Webb
against judgments, penalties, fines, settlements and reasonable expenses
incurred by the person in connection with the proceeding if the person conducted
himself or herself in good faith and in a manner he or she reasonably believed
to be in or not opposed to our best interests, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to our directors, officers
and controlling persons pursuant to the foregoing provisions, we 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.
Our articles of incorporation limit the liability of our directors to the
fullest extent permitted by Colorado law. Specifically, the articles of
incorporation provide that our directors will not be personally liable for
monetary damages for breach of fiduciary duty as directors, except for:
. any breach of the duty of loyalty to us or our shareholders;
. acts or omissions not in good faith or that involved intentional
misconduct or a knowing violation of law;
. dividends or other distributions of corporate assets that are in
contravention of statutory or contractual restrictions; or
. any transaction from which the director derives an improper personal
benefit.
Liability under federal securities law is not limited by the articles of
incorporation.
ITEM 16. EXHIBITS
3.1 Articles of Incorporation, as amended, of Webb Interactive Services,
Inc. (1)
3.2 Bylaws of Webb Interactive Services, Inc. (2)
4.1 Specimen form of Webb Interactive Services, Inc. common stock
certificate (3)
5.1 Opinion of Counsel*
10.1 Securities Purchase Agreement dated August 25, 1999 between Webb and
the Castle Creek Technology Partners LLC, including the Form of
Warrant and Registration Rights Agreement (4)
10.2 Promissory note dated August 25, 1999 issued by Webb to the Castle
Creek Technology Partners LLC (4)
10.3 Amendment dated December 18, 1999 to Securities Purchase Agreement
dated August 25, 1999 between Webb and the Castle Creek Technology
Partners LLC (5)
10.4 First Amendment dated December 18, 1999 to Promissory Note dated
August 25, 1999 issued by Webb to Castle Creek Technology Partners
LLC (5)
10.5 Stock Purchase Warrant dated August 25, 1999, as amended, December
18, 1999, issued by Webb to Castle Creek Technology Partners LLC (5)
10.6 Stock Purchase Warrant dated December 18, 1999, issued by Webb to
Castle Creek Technology Partners LLC (5)
10.7 Securities Purchase Agreement dated as of December 31, 1999, between
Webb, Marshall Capital Management, Inc. and Castle Creek Technology
Partners LLC. Included as exhibits thereto are the form of Warrant
and the Registration Rights Agreement (6)
10.8 Letter Agreement dated as of September 14, 2000 between Webb and
Castle Creek. (7)
10.9 Articles of Amendment setting forth the terms of the series B-2
convertible preferred stock (8)
10.10 Exchange Agreement dated as of September 14, 2000, between Webb and
Castle Creek (8)
10.11 Securities Purchase Agreement dated as of February 28, 2001, between
Webb and Castle Creek Technology Partners LLC. Included as exhibits
thereto are the Articles of Amendment setting forth the terms of the
Series C-1 Convertible Preferred Stock, the form of Series C-1
Warrant and the Registration Rights Agreement (9)
10.12 Articles of Amendment setting forth the terms of the Series C-1
Convertible Preferred Stock (9)
10.13 Amendment Agreement dated as of July 10, 2001 between Webb and
Castle Creek Technology Partners LLC (10)
10.14 Asset Purchase Agreement dated as of October 16, 2001 between Webb
and Nextron Communications, Inc. (11)
10.15 License Agreement dated as of October 16, 2001 between Webb and
Nextron Communications, Inc. (11)
10.16 Securities Purchase Agreement dated as of January 17, 2002, between
Webb and Jona, Inc. Included as exhibits are a form of warrant and
Registration Rights Agreement (12)
10.17 Exchange Agreement between Webb and Castle Creek Technology Partners
LLC. Included as exhibits are Articles of Amendment setting forth
the terms of the Series D Junior Convertible Preferred Stock, form
of warrant, form of Series D Warrant, form of amended warrants and
Registration Rights Agreement (12)
10.18 Pledge and Security Agreement between Webb and Jona, Inc. and
Promissory Note issued to Jona, Inc., dated as of January 17,
2002 (12)
10.19 Pledge and Security Agreement between Webb and Jona, Inc. and
Promissory Note issued to Jona, Inc., dated as of December 21, 2001,
and form of warrant (12)
23.1 Consent of Arthur Andersen LLP*
- ------------------
* Filed herewith
(1) Filed with the Registration Statement on Form S-3, filed January 29, 1999,
Commission File No. 333-71503.
(2) Filed with the initial Registration Statement on Form SB-2, filed April 5,
1996, Commission File No. 333-3282-D.
(3) Filed with the Registration Statement on Form S-3, filed September 24,
1999, Commission File No. 333-86465.
(4) Filed with the current report on Form 8-K, filed September 2, 1999,
Commission File No. 000-28462.
(5) Filed with Amendment No. 2 to the Registration Statement on Form S-3, filed
January 3, 2000, Commission File No. 333-87887.
(6) Filed with the current report on Form 8-K, filed January 5, 2000,
Commission File No. 000-28462.
(7) Filed with the current report on Form 8-K, filed September 19, 2000,
Commission File No. 000-28462.
(8) Filed with the current report on Form 8-K/A, filed September 27, 2000,
Commission File No. 000-28462.
(9) Filed with the current report on Form 8-K, filed March 1, 2001, Commission
File No. 000-28462.
(10) Filed with Amendment No. 3 to the Registration Statement on Form S-3/A,
filed July 10, 2001, Commission File No. 333-57422.
(11) Filed with the current report on Form 8-K, filed November 1, 2001,
Commission File No. 000-28462.
(12) Filed with the current report on Form 8-K, filed on January 22, 2002 and
amended on January 29, 2002. Commission File No. 000-28462.
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 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;
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed 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 that remain
unsold at the termination of the offering.
B. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant as discussed above, 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 Denver, State of Colorado, on February 7, 2002.
WEBB INTERACTIVE SERVICES, INC.
By: /s/ William R. Cullen
--------------------------------------------------
William R. Cullen, Chief Executive Officer
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints William R. Cullen and Lindley S. Branson,
and each of them, his true and lawful attorneys-in-fact and agents, 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 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 powers and authority to do and perform each and
every act and things requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their or his substitute or substitutes, 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 below on the 7th day of February, 2002,
by the following persons in the capacities indicated:
/s/ William R. Cullen
- ----------------------------------
William R. Cullen
(President, Chief Executive Officer,
Chief Financial Officer
and a Director)
/s/ Stuart J. Lucko
- ----------------------------------
Stuart J. Lucko
(Chief Accounting Officer)
/s/ Lindley S. Branson
- ----------------------------------
Lindley S. Branson
(Director)
/s/ Robert J. Lewis
- ----------------------------------
Robert J. Lewis
(Director)
/s/ Richard C. Jennewine
- ----------------------------------
Richard C. Jennewine
(Director)
WEBB INTERACTIVE SERVICES, INC.
FORM S-3
INDEX TO EXHIBITS
3.1 Articles of Incorporation, as amended, of Webb Interactive Services,
Inc. (1)
3.2 Bylaws of Webb Interactive Services, Inc. (2)
4.1 Specimen form of Webb Interactive Services, Inc. common stock
certificate (3)
5.1 Opinion of Counsel*
10.1 Securities Purchase Agreement dated August 25, 1999 between Webb and
the Castle Creek Technology Partners LLC, including the Form of Warrant
and Registration Rights Agreement (4)
10.2 Promissory note dated August 25, 1999 issued by Webb to the Castle
Creek Technology Partners LLC (4)
10.3 Amendment dated December 18, 1999 to Securities Purchase Agreement
dated August 25, 1999 between Webb and the Castle Creek Technology
Partners LLC (5)
10.4 First Amendment dated December 18, 1999 to Promissory Note dated
August 25, 1999 issued by Webb to Castle Creek Technology Partners
LLC (5 )
10.5 Stock Purchase Warrant dated August 25, 1999, as amended, December 18,
1999, issued by Webb to Castle Creek Technology Partners LLC (5)
10.6 Stock Purchase Warrant dated December 18, 1999, issued by Webb to
Castle Creek Technology Partners LLC (5)
10.7 Securities Purchase Agreement dated as of December 31, 1999, between
Webb, Marshall Capital Management, Inc. and Castle Creek Technology
Partners LLC. Included as exhibits thereto are the form of Warrant and
the Registration Rights Agreement (6)
10.8 Letter Agreement dated as of September 14, 2000 between Webb and
Castle Creek. (7)
10.9 Articles of Amendment setting forth the terms of the series B-2
convertible preferred stock (8)
10.10 Exchange Agreement dated as of September 14, 2000, between Webb and
Castle Creek (8)
10.11 Securities Purchase Agreement dated as of February 28, 2001, between
Webb and Castle Creek Technology Partners LLC. Included as exhibits
thereto are the Articles of Amendment setting forth the terms of the
Series C-1 Convertible Preferred Stock, the form of Series C-1 Warrant
and the Registration Rights Agreement (9)
10.12 Articles of Amendment setting forth the terms of the Series C-1
Convertible Preferred Stock (9)
10.13 Amendment Agreement dated as of July 10, 2001 between Webb and
Castle Creek Technology Partners LLC (10)
10.14 Asset Purchase Agreement dated as of October 16, 2001 between Webb
and Nextron Communications, Inc. (11)
10.15 License Agreement dated as of October 16, 2001 between Webb and
Nextron Communications, Inc. (11)
10.16 Securities Purchase Agreement dated as of January 17, 2002, between
Webb and Jona, Inc. Included as exhibits are a form of warrant and
Registration Rights Agreement (12)
10.17 Exchange Agreement between Webb and Castle Creek Technology Partners
LLC. Included as exhibits are Articles of Amendment setting forth the
terms of the Series D Junior Convertible Preferred Stock, form of
warrant, form of Series D Warrant, form of amended warrants and
Registration Rights Agreement (12)
10.18 Pledge and Security Agreement between Webb and Jona, Inc. and
Promissory Note issued to Jona, Inc., dated as of January 17, 2002 (12)
10.19 Pledge and Security Agreement between Webb and Jona, Inc. and
Promissory Note issued to Jona, Inc., dated as of December 21, 2001,
and form of warrant (12)
23.1 Consent of Arthur Andersen LLP*
- --------------------
* Filed herewith
(1) Filed with the Registration Statement on Form S-3, filed January 29, 1999,
Commission File No. 333-71503.
(2) Filed with the initial Registration Statement on Form SB-2, filed April 5,
1996, Commission File No. 333-3282-D.
(3) Filed with the Registration Statement on Form S-3, filed September 24,
1999, Commission File No. 333-86465.
(4) Filed with the current report on Form 8-K, filed September 2, 1999,
Commission File No. 000-28462.
(5) Filed with Amendment No. 2 to the Registration Statement on Form S-3, filed
January 3, 2000, Commission File No. 333-87887.
(6) Filed with the current report on Form 8-K, filed January 5, 2000,
Commission File No. 000-28462.
(7) Filed with the current report on Form 8-K, filed September 19, 2000,
Commission File No. 000-28462.
(8) Filed with the current report on Form 8-K/A, filed September 27, 2000,
Commission File No. 000-28462.
(9) Filed with the current report on Form 8-K, filed March 1, 2001, Commission
File No. 000-28462.
(10) Filed with Amendment No. 3 to the Registration Statement on Form S-3/A,
filed July 10, 2001, Commission File No. 333-57422.
(11) Filed with the current report on Form 8-K, filed November 1, 2001,
Commission File No. 000-28462.
(12) filed with the current report on Form 8-K, filed on January 22, 2002 and
amended on January 29, 2002. commission file No. 000-28462.