As filed with the Securities and Exchange Commission on May 5, 1999
Registration No. 333-68781
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
----------
Amendment No.2
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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DIGITAL COURIER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Commission file number: 0-20771
Delaware 87-0461856
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
136 Heber Avenue, Suite 204
Park City, Utah 84060
(435) 655-3617
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
MITCHELL EDWARDS
Executive Vice President
DIGITAL COURIER TECHNOLOGIES, INC.
P.O. Box 8000
136 Heber Avenue, Suite 204
Park City, Utah 84060
(435) 655-3617
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
copies to:
WILLIAM C. GIBBS
SNELL & WILMER
111 East Broadway, Suite 900
Salt Lake City, Utah 84111
(801) 237-1900
--------------------
Approximate date of commencement of proposed sale to public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
|_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
==========================================================================================================
Title of each Proposed Proposed
class of Amount Maximum Maximum Amount of
securities to be to be Offering price Aggregate Registration
registered (1) registered(2) per unit (3) offering price Fee
------------ ------------- --------------- ---------------- --------------
Common Stock 3,024,338 $6.66 $20,142,091 $6,319
==========================================================================================================
(1) This registration statement ("Registration Statement") covers the
resale by certain selling security holders ("Selling Stockholders") of
up to an aggregate of 3,024,338 shares of Common Stock, $.0001 par
value, of Digital Courier Technologies, Inc. (the "Company"), 1,324,338
shares of which were previously acquired by such Selling Stockholders,
and 900,000 shares of which may be acquired by such Selling
Stockholders upon the exercise of presently outstanding warrants and
800,000 of which may be acquired by Selling Stockholders upon
conversion of Series A Convertible Preferred Stock.
(2) In the event of a stock split, stock dividend, or similar transaction
involving the Registrant's Common Stock, in order to prevent dilution,
the number of shares registered shall automatically be increased to
cover the additional shares in accordance with Rule 416(a) under the
Securities Act.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low prices of the Registrant's Common Stock on
December 4, 1998, as reported by NASDAQ National Market.
(4) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low prices of the Registrant's Common Stock on
April 26, 1999, as reported by NASDAQ National Market.
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 Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
PROSPECTUS
136 Heber Avenue, Suite 204
P.O. Box 8000
Park City, Utah 84060
Telephone (435) 655-3617
DIGITAL COURIER TECHNOLOGIES, INC.
3,024,338 SHARES OF COMMON STOCK
With this prospectus, the selling stockholders identified in this
prospectus are offering 3,024,338 shares of our common stock.
Before purchasing any of the shares, you should consider very
carefully the information presented under the caption "Risk
Factors" beginning on page 2 of this prospectus.
Our common stock is traded on the NASDAQ National Market under the
symbol "DCTI."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is May 5, 1999
RISK FACTORS
Before purchasing the shares, you should carefully consider the risk
factors described below. If any of the following risks actually occurs, it could
materially adversely affect our business, financial condition, and results of
operations. The risks and uncertainties described below are not the only ones we
are facing. While the risks described below are all the material risks of which
we are currently aware, we may have other risks and uncertainties of which we
are not yet aware or which we currently believe are immaterial that may also
impair our business operations.
Additional Cash from Outside Sources is Essential to Continued Operations.
If we do not receive the full amount of financing committed to us, we
project that we may not have sufficient cash flows from operating activities
during the next twelve months to provide the necessary capital to fully
implement our marketing strategy or to sustain operations at current levels. We
recently completed several private placements of convertible preferred stock,
common stock and warrants which provided us with an aggregate of $7.2 million in
cash. The investors committed to purchase an additional $11.2 million of our
equity securities if certain conditions are met. The most important of these
conditions are that the closing bid price of our stock is above $7 for thirty
consecutive days and that this registration statement is effective. In addition,
the exercise of the warrants would bring us an additional $22.5 million in cash.
We will be able to force the exercise of the warrants if our stock trades at
twice the warrant exercise price for fifteen consecutive days. If our stock
trades at $10.46 per share for the period, we would generate $4 million in cash;
the remainder would be available if our stock trades at $18.98 per share. If we
receive the entire $11.2 million that has been committed, we anticipate that we
will have sufficient cash to operate during the next twelve months.
We Have Incurred Substantial Losses
We incurred a loss of $5,597,967 from continuing operations during the
year ended June 30, 1998 and a loss of $17,846,073 during the nine months ended
March 31, 1999. Our operating activities used $6,377,970 of cash during the year
ended June 30, 1998 and $7,575,502 during the nine months ended March 31, 1999.
We also had a tangible working capital deficit of $272,968 at June 30, 1998. We
expect that we will require additional funding, the amount of which is not
known, before our continuing operations will achieve and sustain profitability,
if at all.
Only One Year of Internet Based Revenues
We have a limited history of generating revenue on the Internet. Prior
to 1998, most of our revenues came from non-Internet businesses. We began
generating Internet-based revenues from our existing businesses in January 1998,
when we acquired Books Now, Inc. At that time, Books Now was generating revenues
of approximately $50,000 per month, with about 10% of that amount being derived
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from the sale of books through the web site Booksnow.com. We acquired
WeatherLabs, Inc. in May 1998, which had been generating a small amount of
revenue from its Internet-only weather service since the beginning of 1998.
Significant Future Losses Are Anticipated
We have incurred operating losses from continuing operations in each
fiscal quarter since we were formed. We expect operating losses and negative
cash flows to continue for the foreseeable future as we grow our business. As of
March 31, 1999, we had an accumulated deficit of $32,418,088. We incurred losses
from continuing operations of $5,597,967 and $7,158,851 for the years ended June
30, 1998 and 1997, respectively. We also incurred a net loss of $17,846,073 for
the nine months ended March 31, 1999. We will likely incur significant losses on
a quarterly and annual basis in the future until advertising, licensing and
sales revenue significantly increases.
Going Concern Opinion by our Auditors
The Report of Independent Public Accountants on our financial
statements as of and for the year ended June 30, 1998 includes the following,
"The Company has suffered recurring losses from continuing operations of
$5,597,967, $7,158,851 and $3,586,413 during the years ended June 30, 1998, 1997
and 1996, respectively. The Company has a tangible working capital deficit of
$272,968 as of June 30, 1998. None of the Company's continuing operations are
generating positive cash flows. These matters raise substantial doubt about the
Company's ability to continue as a going concern."
Integration of Digital Courier International, Inc.
Uncertainty Relating to Integration. We acquired Digital Courier
International, Inc. ("DCI") in September 1998, and we believe there are risks in
attempting to integrate the operations of these two previously separate
companies. Prior to the acquisition, our company consisted of the computer and
data facility in Salt Lake City, Books Now, and the marketing plan for Videos
Now. In the acquisition, we acquired proprietary software and in-process
research and development. We are putting forth a significant effort to
successfully combine the two companies. Our efforts include coordinating
development of new products, commercializing in-process development, integrating
product offerings, and coordinating sales and marketing efforts and business
development efforts. We have different systems and procedures from DCI in many
operational areas and these systems and procedures must be rationalized and
integrated. To be profitable, we will need to integrate and streamline
overlapping functions successfully. Among the risks we face are:
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o We must incur the costs generally associated with this type of
integration including the costs to:
o integrate product lines;
o cross-train the sales force;
o position products in the market;
o We do not yet know what the ultimate cost of integration will be and
how significant the impact will be: the cost may have an adverse
effect on our operating results;
o Our integration of the two companies will require management resources
that may distract attention from normal operations. Employee
uncertainty and lack of focus may disrupt our business; and
o Our failure to quickly and effectively accomplish the integration
could harm us. Uncertainty in the marketplace or customer concern
regarding the impact of our acquisition of DCI could also have a
material adverse effect on our consolidated business, financial
condition and results of operations.
Dilutive Effect to Our Stockholders. Our issuance of 4,659,080 shares
of common stock to acquire DCI could reduce the market price of our common
stock, as more shares are outstanding and DCI does not bring a substantial
revenue stream to our business.
We Depend on Continued Growth in Use of the Internet
Our success is substantially dependent upon continued growth in the use
of the Internet to support our sale of weather information, books, videos and
advertising on our web sites. Rapid growth in the use of and interest in the
Internet is a recent phenomenon. The Internet may not prove to be a viable
commercial marketplace for a number of reasons, including (1) potentially
inadequate development of the necessary infrastructure, such as a reliable
network backbone, or (2) untimely development and commercialization of
performance improvements, including high speed modems. Some of our weather
information, for example, is best viewed with high speed modems or broadband
internet connections.
Additionally, if use of the Internet does not continue to grow, or if
the Internet infrastructure does not effectively support growth that may occur,
we may not be successful.
Unproven Business Model for Our Internet-based Products and Services
The markets for Internet-based weather reports and forecasts, for the
sale of books and videos on the Internet, and for Internet-based credit card
clearing, have only recently begun to develop and may prove unprofitable.
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WeatherLabs. Although more and more users of the Internet seek
weather-related information at some point during an Internet "session," it is
still unclear whether users will ever be willing to pay for such information.
Until such time as a market develops for the sale of weather-related
information, providers of weather on the Internet, including WeatherLabs, will
have to rely on selling advertising to generate revenue. WeatherLabs is not yet
profitable from the sale of advertising on the web sites that utilize
WeatherLabs.
VideosNow and Books Now. Although sales of books and videos on the
Internet by some of our competitors continue to climb, we are unaware of any
company that has generated operating profits from the sale of books or videos on
the Internet. We do not know when we will be able to generate a profit from the
sale of these media products on the Internet.
Credit Card Clearing. The software and services that are currently
under development have the potential to be profitable, but as our revenues to
date from the processing of credit card transactions is minimal, we cannot give
assurances in this regard.
All of these markets are rapidly evolving and are characterized by an
increasing number of market entrants who have introduced or developed products
and services for use on the Internet.
If consumers fail to use our web sites or such usage fails to continue
to grow, we may be unable to sell enough products, services or advertising to
become profitable. As is typical in the case of a new and rapidly evolving
industry, demand and market acceptance for recently introduced products and
services are subject to a high level of uncertainty and risk. Because the market
for virtual commerce and advertising on the Internet is new and evolving, we are
unable to predict the future growth rate and size of this market. If the market
fails to develop, develops more slowly than expected or becomes saturated with
competitors, or if our web sites do not achieve or sustain market acceptance, we
may not be successful.
Brand Development is Important to our Business
We believe that establishing and maintaining our "netClearing(TM),"
"Books Now(TM)," "WeatherLabs(TM)" and "Videos Now(TM)" brands is a critical
aspect of our efforts to attract and expand our Internet audience. If consumers
do not perceive our existing or future products and services to be of high
quality and therefore do not use our brands, sales will be adversely affected
and advertisers will not be attracted to our audiences. Although our software
and services are engineered to appear as though they were created by the web
portals and merchants on the Internet, our brands are important to generate
interest in our software and services by such portals and merchants. We also
believe that the importance of brand recognition will increase due to the
growing number of Internet sites and the relatively low barriers to entry. In
response to competitive pressures, we may be forced to substantially increase
our financial commitment to creating and maintaining a distinct brand loyalty
among our consumers. If we are unable to promote and maintain our brands, or if
we incur excessive expenses in maintaining brand loyalty, we may not be
successful.
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We Rely on Internet Advertising Revenues
We currently derive approximately one-quarter of our revenues from
selling advertisements on our web sites, and we believe there are risks
associated with this revenue stream. Our ability to generate significant
advertising revenues will depend upon, among other things, advertisers'
acceptance of the Internet as an effective place to advertise. Most Internet
advertising customers, however, have only limited experience with the Internet
as an advertising medium. Additionally, most of these customers have not devoted
a significant portion of their advertising expenditures to web-based advertising
and may not find such advertising to be effective for promoting their products
and services relative to traditional print and broadcast media. Any inability by
us to sell advertising on our web sites, particularly the WeatherLabs co-branded
web sites, will adversely affect our revenues and profitability.
We face many other challenges in selling web-based advertising. For
example:
o there are no widely accepted standards for measuring the effectiveness
of web-based advertising;
o certain advertising filter software programs are available that limit
or remove advertising from an Internet user's desktop; such software
may have a materially adverse effect upon the viability of Internet
advertising. There is intense competition in the sale of Internet
advertising, including competition from other Internet navigational
tools as well as other high-traffic sites;
o competition for advertising sales could result in significant price
competition and reductions in advertising revenues to our web sites;
and
o our advertising customers may not accept the internal and third-party
measurements of impressions received by advertisements on our web
sites, and such measurements may contain errors.
We Depend Upon Third Parties
We depend substantially upon third parties for several critical
elements of our business, including:
o Sprint, for telecommunications services;
o Internet Portals, including America Online, Netscape, Excite and the
At Home Network, for use of our WeatherLabs products and services;
o Hewlett Packard, for maintenance and upgrades of the HP-9000 computers
in our data center;
o Sun Microsystems, for maintenance and upgrades of the Sun Enterprise
500 servers in our data center;
o Cisco, for maintenance and upgrades of our routers which are used to
connect our computer network to the Internet; and
o Other vendors of software and hardware for maintenance and upgrades of
software, systems, and hardware used to deliver our products on the
Internet.
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Although we believe that there are other third party providers who can
provide the same services as those providers we currently use, loss or
interruption of service by such providers would have an adverse effect on our
business and prospects.
We Depend on our Existing Technology and Infrastructure
We depend substantially upon our computer equipment and its maintenance
and technical support to ensure accurate and rapid presentation of content and
advertising to our customers. Our failure to effectively maintain our equipment
and provide such information could have a material adverse effect on our
business, operating results and financial condition. In addition, if we
terminate any of our telecom agreements with Sprint, or Sprint fails to renew
our agreements upon expiration, we could incur substantial additional costs to
develop or license replacement telecom capacity.
We Must Continually Enhance our Products To Remain Competitive
Our failure to effectively improve our software, web sites or other
products, or our failure to achieve market acceptance of design modifications,
could adversely affect our business, results of operations and financial
condition. To remain competitive in the sale of products over the Internet, in
delivering information over the Internet, and in providing e-commerce services
on the Internet, we must continue to enhance and improve the responsiveness,
functionality, features and content of our main product offerings. If we are
unable to develop increasingly complex technologies to improve our products, we
may not successfully maintain competitive user response time or implement new
features and functions. Furthermore, enhancements of or improvements to our
products may contain undetected errors that require significant design
modifications. Such errors could result in a loss of customer confidence and
user support and a decrease in the value of our products and services. These
market characteristics are exacerbated by the emerging nature of this market and
the fact that many companies are expected to introduce new Internet products and
services in the near future.
Capacity Constraints and Systems Failures
Any disruption in Internet access or any failure of our technology to
handle higher volumes of user traffic could have a material adverse effect on
our business, operating results and financial condition. A key element of our
business strategy is to generate high volume usage of our products and content
offerings. Accordingly, our technology performance is critical to our
reputation. Our technology performance also affects our ability to attract
advertisers to our products, and achieve market acceptance of these products and
media properties.
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The risks we face in this regard include:
o If we experience a system failure that causes an interruption or an
increase in response time of our web sites, we may have less traffic
to our content destinations; o
o If the interruptions or delays are sustained or repeated, our
advertisers may find our content offerings less attractive and our
customers may choose to shop elsewhere;
o An increase in the volume of traffic to our web sites could strain our
software or hardware capacity, which could lead to slower response
time or system failures;
o As the number of users increases, our infrastructure may not be able
to scale accordingly;
o We are dependent upon our own technology and link to the Internet;
o We are dependent on hardware suppliers for prompt delivery,
installation and service of servers and other equipment which we use
to deliver our products and services. Our operations are dependent in
part upon our ability to protect our operating systems against
physical damage from fires, floods, earthquakes, power losses,
telecommunications failures, break-ins and similar events. We do not
presently have redundant, multiple-site capacity in the event of any
such occurrence; and
o Our servers are vulnerable to computer viruses, break-ins and similar
disruptions from unauthorized tampering.
If we experience any of these events, the users of our web sites may
encounter interruptions, delays or cessations in service, which could have a
material adverse effect on our business, operating results and financial
condition.
Management of Internal Growth
As we grow, we may not be able to effectively manage the expansion of
our operations and our systems, procedures or controls may not be adequate to
support our operations. Additionally, when market opportunities arise, we may
not have sufficient personnel or procedures in place to be able to take
advantage of those opportunities.
Markets for Our Products and Services are Highly Competitive
The market for Internet products and services is highly competitive and
we expect the competition to increase. We also expect the market for
Internet-based commerce and advertising to be intensely competitive. There are
no substantial barriers to entry in these markets.
NetClearing. We have a number of competitors that provide software to
merchants and financial institutions for processing payment card transactions
over the Internet. They include VeriFone, Inc., IBM Corporation, and AT&T
Corporation. Several other competitors, including CyberCash, Inc., CyberSource,
Inc. and ClearCommerce Corporation, offer software that enables Internet
merchants to obtain credit card authorizations. Several of these companies are
developing software to process transactions in compliance with the SET standard
which we use. Additional competition could come from web browser companies and
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software and hardware vendors that incorporate Internet payment capabilities
into their products.
Videos Now and Books Now. Companies such as Reel.com, Amazon, Barnes &
Noble, CD Universe and others sell videos and books on the Internet, directly
competing with our Videos Now and Books Now divisions. Many of these competitors
have longer operating histories, greater name recognition, more existing
customers, and significantly greater financial, technical and marketing
resources than we do.
WeatherLabs. Our main competitors in providing weather forecasting on
the Internet are The Weather Channel and Accu-Weather. They are both larger,
more strongly capitalized and have longer operating histories than WeatherLabs.
In the future we expect to face additional competition for all of our
products and services. This competition will likely include companies that are
larger and better capitalized than us. They are likely to also have more
expertise and established brand recognition. These competitors could develop
Internet product and services that are superior to ours and have greater market
acceptance. Moreover, some of our current customers and partners have
established relationships with our competitors. Future customers and partners
may establish similar relationships.
Trademarks and Proprietary Rights
We are not certain that the steps we have taken to protect our
proprietary rights will be adequate or that third parties will not infringe or
misappropriate our copyrights, trademarks, trade dress and similar proprietary
rights. In addition, we cannot be certain that other parties will not assert
infringement claims against us. We believe our copyrights, trademarks, trade
dress, trade secrets and similar intellectual property are critical to our
success. We rely upon trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with our employees, customers,
partners and others to protect our proprietary rights.
We could be subject to legal proceedings and claims alleging
infringement by us and our licensees of the trademarks and other intellectual
property rights of others. We may be forced to use significant financial and
managerial resources to defend such claims, even if they are not meritorious. We
are not aware of any legal proceedings or claims against us in this regard.
Dependence on Key Executives
Our performance is substantially dependent on the effectiveness of our
senior management and key technical personnel. In particular, our success
depends substantially on the continued efforts of our senior management team,
which currently is composed of a small number of individuals who only recently
joined the Company. We do not carry key person life insurance on any of our
senior management personnel. The loss of the services of any of our executive
officers or other key employees could detrimentally affect us.
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Attracting and Retaining Qualified Employees
Our future success depends on our continuing ability to attract and
retain highly qualified technical and managerial employees. Competition for java
software programmers and other people experienced in the technical areas in
which we operate is intense and as a small company, we may not be able to
attract them. We also may not have the resources to provide the salaries and
benefits that our competitors can. Other companies in the software development
field may try to entice our best technical employees to change jobs.
Government Regulation of the Internet
Any new legislation or regulation or the application of existing laws
and regulations to the Internet could have a material adverse effect on our
business, operating results and financial condition. We are not currently
subject to direct regulation by any United States government agency, other than
regulations applicable to businesses generally. There are currently few laws or
regulations directly applicable to access to or commerce on the Internet. Due to
the increasing popularity and use of the Internet, it is possible that a number
of laws and regulations may be adopted with respect to the Internet, covering
issues such as user privacy, pricing and characteristics and quality of products
and services. For example, we may be subject to the provisions of the
Communications Decency Act. Although the constitutionality of the CDA, the
manner in which the CDA may be interpreted and enforced and the effect of the
CDA on our operations cannot be determined, it is possible that the CDA could
expose us to substantial liability. A number of other countries also have
enacted or may enact laws that regulate Internet content. The adoption of such
laws or regulations may decrease the growth of the Internet, which could in turn
decrease the demand for our products. Such laws and regulations also could
increase our cost of doing business or otherwise have an adverse effect on our
business, operating results and financial condition. Moreover, existing laws
governing issues such as property ownership, defamation, obscenity and personal
privacy may also be applicable to the Internet, and we may be subject to claims
that our services and web sites violate such laws.
State Sales and Use Tax Laws
Several states have attempted to tax online retailers and service
providers even when they have no physical presence in the state. There is a
currently a three year moratorium on taxing Internet commerce that the federal
government imposed on the states. We currently charge sales tax for goods sold
to customers in California and Utah, the states where we have operations. If
after the moratorium, other states assert tax claims for products we have sold
over the Internet, it could be costly and burdensome for us to comply.
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Liability for Information Services
Because materials may be downloaded by the online or Internet services
which we operate or facilitate and may be subsequently distributed to others, we
may be subject to a variety of claims. These claims may include defamation,
negligence, copyright or trademark infringement, personal injury or other
theories based on the nature and content of such downloaded materials. In the
past, other online services have been sued for such claims and in some cases
have lost. In addition, we could be exposed to liability with respect to the
books, videos, content and links that may be accessible through our web sites,
or through content and materials that may be posted by users on web sites. It is
also possible that if we provide any information through our web sites or
services which contains errors, third parties could make claims against us for
losses incurred in reliance on such information. Also, to the extent we provide
users with information relating to purchases of goods and services, we could
face claims relating to injuries or other damages arising from such goods and
services. Although we carry general liability insurance, our insurance may not
cover potential claims of this type or may not be adequate to indemnify us for
all liability that may be imposed. Our business, operating results and financial
condition could be adversely affected by any liability or legal defense expenses
that are not covered by insurance or that are in excess of our insurance
coverage.
Concentration of Stock Ownership
Our present directors, executive officers, greater than 5% stockholders
and their respective affiliates beneficially own approximately 44% of our
outstanding common stock. As a result of their ownership, the directors,
executive officers, greater than 5% stockholders and their respective affiliates
collectively are able to control or significantly influence all matters
requiring shareholder approval, including the election of directors and approval
of significant corporate transactions. Such concentration of ownership may also
have the effect of delaying or preventing a change in control of the Company.
Volatility of Stock Price
Broad market and industry fluctuations may adversely affect the trading price of
our common stock, regardless of our operating performance. The trading price of
our common stock has been and may continue to be subject to wide fluctuations.
In the last twelve months our stock has traded as low as $1.875 and as high as
$17.125. The wide swings in the price of our stock have not always been in
response to any factors that we can identify.
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Future Issuance of Preferred Stock Could Hurt Common Stockholders
Rights of preferred stockholders take priority over common
stockholders. The only preferred stock currently outstanding consists of 360
shares of Series A Convertible Preferred Stock. Our Board of Directors has the
authority to issue up to 2,500,000 shares of preferred stock. They can determine
the price, rights, preferences, privileges and restrictions, including voting
rights, of those shares without any further vote or action by the stockholders.
Although the Series A Preferred Stock does not have voting rights, future
preferred stockholders could delay, defer or prevent a change of control of
which our common stockholders may have been in favor.
Shares Eligible for Future Sale
Up to 8,860,016 shares of our common stock will be freely trading or
eligible for sale in the public market. 1,324,338 (excluding shares issuable
upon exercise of warrants or conversion of preferred stock) are being registered
in this prospectus which will make them available for sale. If the selling
stockholders sell a substantial number of shares in the public market following
this registration, or if the public believes that such sales could occur, the
market price of our common stock could decline. Under the federal securities
laws, shares may not be sold unless they are registered with the SEC or are
exempt from registration. In addition, approximately 6,283,925 shares of our
stock are immediately eligible for resale in the public market without
restriction under Section 4(1) of the Securities Act, which permits sales by
people other than the issuer, underwriter or dealer. Approximately another
1,401,753 shares of common stock have been held long enough to now be eligible
for sale in the public market, subject to the provisions of Rule 144 under the
Securities Act. Rule 144 allows holders of restricted stock, who have held their
stock for at least one year, to sell the stock publicly subject to volume and
manner of sale restrictions.
As of April 29, 1999, an aggregate of 3,535,000 shares of common stock
were reserved for issuance pursuant to certain warrants. Of the common stock
which will be issued on exercise of these warrants, 900,000 shares are being
registered in this prospectus.
As of April 29, 1999, 679,793 shares of common stock were subject to
options outstanding under our employee stock option plan at a weighted average
exercise price of $4.36 per share. Of these options, 358,297 were exercisable at
that date at a weighted average exercise price of $4.55 per share. The remainder
of these options become exercisable at various points over the next 2 years. An
additional 1,358,621 shares of common stock are reserved for future issuance
under the plan. We filed a registration statement on Form S-8 registering the
shares of common stock reserved for future issuance under the plan, thus
permitting the resale of such shares in the public market without restriction
under the Securities Act, subject to Rule 144.
12
Some of Our Equipment May Fail in Year 2000
Computer systems, software applications, and microprocessor dependent
equipment may cease to function properly or generate erroneous data when the
year 2000 arrives. The problem affects those systems or products that are
programmed to accept a two-digit code in date code fields. To correctly identify
the year 2000, a four-digit date code field will be required to be what is
commonly termed "year 2000 compliant."
To date we have invested $60,000 in an effort to certify all aspects of
the business are year 2000 compliant. The areas of the business which have been
targeted for compliance testing are our operations and our software products and
services. We conducted the certification process over a three-month period in
which all software products and service components under our direct control
certified year 2000 compliant. For the major operational components and
remaining software and services that are under the control of third party
organizations, we have received written confirmation and evidence of year 2000
compliance. We may realize operational exposure and risk if the systems for
which we are dependent upon to conduct day-to-day operations are not year 2000
compliant. The potential areas of software exposure include:
o electronic data exchange systems operated by third parties with whom
we transact business;
o server software which we use to present content and advertising to our
customers and partners; and
o computers, software, telephone systems and other equipment used
internally.
In October 1997, we initiated the review and assessment of all of our
computerized hardware and internal-use software systems to ensure that such
systems will function properly in the year 2000 and beyond. During the last two
years, our computerized information systems have been substantially upgraded to
be year 2000 compliant.
We have not yet determined a contingency plan in the event that any
non-compliant critical systems are not remedied by the year 2000, nor have we
formulated a timetable to create such a contingency plan. It is possible that
costs associated with year 2000 compliance efforts may exceed our current
projections of an additional $40,000 to reach total compliance. In such a case,
these costs could have a material negative impact on our financial position and
results of operations. It is also possible that if systems material to our
operations have not been made year 2000 compliant, or if third parties fail to
make their systems compliant in a timely manner, the year 2000 issue could have
a material adverse effect on our business, financial condition, and results of
operations. This would result in an inability to provide functioning software
and services to our clients in a timely manner, and could then result in lost
revenues from these clients, until such problems are resolved by us or the
responsible third parties.
13
FORWARD-LOOKING STATEMENTS
This prospectus, including all documents incorporated by reference,
includes forward-looking statements. Forward-looking statements are generally
those preceded by, followed by or including the words "believes," "expects,"
"anticipates" or similar expressions.
These forward-looking statements are based largely on our current
expectations and are subject to a number of risks and uncertainties including
those risks described in the "Risk Factors" section. Our actual results could
differ materially from these forward-looking statements. In light of these risks
and uncertainties, there can be no assurance that the events contemplated by the
forward-looking statements contained in this prospectus will, in fact, occur.
THE COMPANY
We develop and market proprietary electronic commerce and publishing
software for Internet businesses and online information services. We are also
developing electronic commerce and publishing software for consumer products
such as cellular phones and personal digital assistants connected to the
Internet. The electronic commerce software enables businesses to buy and sell
goods safely and reliably using the Internet. It is combined with a payment
processing system that provides consumers and businesses with the capability to
accept credit card payments on the Internet. The publishing software efficiently
delivers electronic information, such as weather conditions and forecasts, to a
wide range of computing devices including personal and business computers,
cellular phones, and pagers.
We operate through four online business divisions:
o netClearing(TM)
o WeatherLabs(TM)
o Books Now(TM)
o Videos Now(TM)
Each division integrates the proprietary software technology to provide
customized applications and business transaction services via the Internet.
netClearing. The netClearing division integrates all of our electronic
commerce software into a comprehensive payment processing service for businesses
and consumers that sell goods and services on the Internet. The netClearing
service is designed to process credit card transactions for over 1,000
businesses and consumers simultaneously. It also ensures that the transactions
occur quickly, securely, and reliably. The service is centrally located at our
technology facility in Salt Lake City, Utah so that transaction processing for
every customer can be controlled and monitored efficiently. netClearing will
generate revenue by charging a processing fee for each transaction conducted and
by charging a fee for additional services such as reporting and reconciliation.
Because the system is largely automated, the cost to process 100 transactions or
10,000 transactions is almost the same. This represents a significant
14
opportunity for profitability as the number of transactions increase and the
cost of processing is held constant.
WeatherLabs. The WeatherLabs division supplies proprietary real-time
weather forecasts and other weather-related reports to online businesses
throughout the world, and operates its own web site www.weatherlabs.com for
consumers and business customers. WeatherLabs also licenses completely developed
web pages that provide weather information on customers' web sites. These web
pages can be easily integrated into a customer's web site and even branded with
the customer's logo to increase its brand value. The weather products and
services are also licensed to our customers on a fixed price and/or ad
revenue-sharing basis. The revenue-sharing pricing model allows WeatherLabs to
collect a percentage of the ad revenue that the customer generates on the web
pages which use its weather-related products and services. This approach enables
customers and partners to integrate our technology into their own to build
additional value for their online businesses.
Videos Now and Books Now. Videos Now and Books Now utilize our software
to operate web sites that sell books and videos to consumers and businesses.
Videos Now operates the web site www.videosnow.com, which sells VHS, DVD, and
LaserDisc videos ranging from newly released theatrical and Hollywood titles,
such as "Titanic," to special interest videos on topics such as home improvement
or Italian cooking. Videos Now offers over 100,000 video titles through its
relationships with various distributors that supply and manage the inventory.
Videos Now has created a communication network that links the distributors to
the Videos Now web site using the Internet, enabling the customer to see exactly
what products are available for purchase at any given time. Using the same
business and technology infrastructure, Books Now operates the web site
www.booksnow.com, which offers over 1 million paperback and hardcover books for
purchase on the Internet. Books Now buys the books from its suppliers and then
ships them to its customers. These divisions generate revenue through sales of
books and videos, and by licensing the software to other companies seeking to
sell books and videos on the Internet. The divisions receive a licensing fee for
the software along with a share of the revenue from the sale of each product
sold through the affiliated web site.
Corporate History. We were incorporated in Delaware in 1985. We began
as a national direct marketing company under the name DataMark Holding, Inc.,
and began incorporating online business strategies five years ago. We recruited
an experienced management and technical team to design and implement a
sophisticated Internet services business. In addition to engineering and
constructing a state-of-the-art computer and data facility in Salt Lake City, we
acquired an Internet access business and contracted with companies in the
electronic mail business. We formed a division to create a network of
interconnected web sites to be promoted by local television stations. We sold
our direct marketing and internet access businesses, as well as certain assets
related to our television web site hosting activities during fiscal 1998. We
retained the computer and data facility in Salt Lake City and all other assets
and businesses. In September 1998, we acquired Digital Courier International,
Inc., a private Internet software development company and changed our name to
Digital Courier Technologies, Inc.
15
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we have filed with
the Securities and Exchange Commission to register 3,024,338 shares of our
common stock, par value $.0001. This prospectus does not include all of the
information contained in the registration statement and the exhibits to the
registration statement. For further information about us and the shares being
registered, you should read the registration statement and the exhibits to the
registration statement. Statements contained in this prospectus concerning
documents we have filed with the SEC as exhibits to the registration statement
or otherwise are not necessarily complete and, in each instance, you should
refer to the actual filed document.
We have not authorized anyone to provide you any information different
from that contained in this prospectus. The selling stockholders may offer to
sell the shares only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of the shares.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms at 450 Fifth Street, Mail Stop 1-2, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public at the SEC's web site at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus and information that we file later with the
SEC will automatically update and supersede this information. Our SEC file
number is 000-20771. We incorporate by reference the documents listed below, and
any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended or under Section 5 of
the Securities Act of 1933, as amended:
(1) Annual Report on Form 10-K for the fiscal year ended June 30, 1998, as
amended through the date hereof;
(2) Quarterly Report on Form 10-Q for the quarter ended September 30, 1998,
as amended through the date hereof;
(3) Quarterly Report on Form 10-Q for the quarter ended December 31, 1998,
as amended through the date hereof;
(4) Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
16
(5) Proxy Statement for the Special Meeting of Shareholders held September
16, 1998;
(6) Proxy Statement for the Annual Meeting of Shareholders held December
15, 1998;
(7) Current Report on Form 8-K filed October 1, 1998;
(8) Current Report on Form 8-K filed December 11, 1998;
(9) Current Report on Form 8-K filed February 12, 1999;
(10) Current Report on Form 8-K filed March 10, 1999; and
(11) Description of our capital stock contained in our registration
statement on Form 8-A, including all amendments or reports filed for
the purpose of updating such description.
You may request a copy of these filings, at no cost, by writing or
telephoning DCTI at P.O. Box 8000, 136 Heber Avenue, Park City, Utah 84060,
telephone (435) 655-3617, attention: Investor Relations.
USE OF PROCEEDS
We are registering the shares of common stock for the benefit of the
selling stockholders and the selling stockholders will sell the shares from time
to time under this prospectus. Other than the exercise price the selling
stockholders will pay to exercise their warrants, we will not receive any
proceeds from the sale of the shares offered in this prospectus. We will pay the
costs of this offering which are estimated to be $75,000. The selling
stockholders are not obligated to exercise their warrants, and there can be no
assurance that they will choose to exercise all or any of the warrants. If all
the warrants are exercised, we will receive $13,956,655. We intend to use any
proceeds we receive from any warrant exercise to augment our working capital for
general corporate purposes.
SELLING STOCKHOLDERS
The following table sets forth certain information as of April 26,
1999, with respect to the selling stockholders. Beneficial ownership after this
offering will depend on the number of shares actually sold by the selling
stockholders. To our knowledge, all selling stockholders have sole voting and
investment power with respect to their securities, except as otherwise
indicated. Except for the purchase of the shares and except as noted below, none
of the selling stockholders has had any position, office or other material
relationship with us within the past three years.
17
The percentage shown in the second column includes all common stock
beneficially owned by the selling stockholder as a percentage of the 13,989,982
shares of common stock outstanding on April 26, 1999, together with all
currently exercisable warrants or options for such selling stockholder. Shares
of common stock underlying warrants or convertible preferred stock are deemed
outstanding for computing the percentage ownership of the person holding such
securities, but are not deemed outstanding for computing the percentage of any
other person. We calculated the amounts in the last two columns on the right of
the table assuming that each selling stockholder disposes of all of the shares
covered by this prospectus and does not acquire any additional common stock. We
also assumed that the selling stockholder did not exercise any other options,
warrants or conversion rights.
Shares of
Shares of Common Common
Name of Selling Stock Beneficially Stock Being Shares of Common
Stockholder Owned Registered Stock Owned
--------------- Prior To Offering for Resale After the Offering
----------------- ---------- ------------------
Number % of Class Number Number % of Class
------ ---------- ------ ------ ----------
At Home Network 120,534 1.55 220,534(1) 0 --
Brown Simpson Strategic Growth --
Fund, Ltd. 970,000 6.74 1,564,444(2) 0
Brown Simpson Strategic Growth --
Fund, L.P. 430,000 3.03 835,556(3) 0
Raymond J. Pittman 1,930,127 13.80 50,000 1,880,127 13.44
America Online, Inc. 353,804 2.53 353,804 0 --
(1) Includes 200,000 shares of common stock which have not been issued but
which are issuable upon exercise of warrants. 100,000 of the warrants are
not currently exercisable and will vest only upon the attainment by At Home
Network of certain performance criteria.
(2) Includes 410,000 shares of common stock which have not been issued but
which are issuable upon exercise of warrants, 150,000 shares which have not
yet been issued and which are subject to warrants which are not currently
exercisable and 444,444 shares which have not yet been issued and which are
subject to convertible preferred stock which is not currently convertible.
(3) Includes 190,000 shares of common stock which have not been issued but
which are issuable upon exercise of warrants and 50,000 shares which have
not yet been issued and which are subject to warrants which are not
currently exercisable and 355,556 shares which have not yet been issued and
which are subject to convertible preferred stock which is not currently
convertible.
18
PLAN OF DISTRIBUTION
The selling stockholders may offer and sell the shares covered by this
prospectus from time to time. The selling stockholders will act as principals
for their own accounts in selling the shares. The selling stockholders may sell
the shares through public or private transactions, on or off the NASDAQ National
Market, at prevailing market prices or at privately negotiated prices. The
selling stockholders will receive all of the net proceeds from the sale of the
shares offered with this prospectus. The selling stockholders will pay all
commissions in connection with the sale of those shares. Other than the exercise
price the selling stockholders will pay to exercise their warrants, we will not
receive any proceeds from the sale of the shares offered in this prospectus.
The distribution of the shares by the selling stockholders is not
subject to any underwriting agreement. We expect that the selling stockholders
will sell the shares covered by this prospectus through customary brokerage
channels, either through:
o broker-dealers acting as principals, who may then resell the shares
through NASDAQ;
o in private sales;
o in a combination of such methods of sale;
o in transactions pursuant to Rule 144 under the Securities Act; or
o in block trades in which the broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction.
We expect the selling stockholders will sell the shares at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The selling stockholders may pledge all
or a portion of the shares as collateral in loan transactions. Upon default by
the selling stockholders, the pledgee in such loan transaction would have the
same rights of sale as such selling stockholders under this prospectus. The
selling stockholders may also transfer shares in other ways not involving market
makers or established trading markets, including directly by gift, distribution,
or other transfer without consideration, and upon any such transfer the
transferee would have the same rights of sale as such selling stockholders under
this prospectus. Finally, the selling stockholders and any brokers and dealers
through whom sales of the shares are made may be deemed to be "underwriters"
within the meaning of the Securities Act, and the commissions or discounts and
other compensation paid to such persons may be regarded as underwriters'
compensation.
From time to time the selling stockholders may engage in short sales,
short sales against the box, puts and calls and other transactions in our
securities or derivatives thereof, and may sell and deliver the shares in
connection therewith or in settlement of securities loans.
In effecting sales, brokers and dealers engaged by the selling
stockholder may arrange for other brokers or dealers to participate in such
19
sales. Brokers or dealers may receive commissions or discounts from the selling
stockholders (or, if any such broker-dealer acts as agent for the purchaser of
such shares, from such purchaser) in amounts to be negotiated which are not
expected to exceed those customary in the types of transactions involved.
Broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share, and, to the extent such
broker-dealer is unable to do so acting as agent for a selling stockholder, to
purchase as principal any unsold shares at the price required to fulfill the
broker-dealer commitment to the selling stockholders. Broker-dealers who acquire
shares as principal may thereafter resell such shares from time to time in
transactions (which may involve block transactions and sales to and through
other broker-dealers, including transactions of the nature described above) in
the over-the-counter market or otherwise at prices and on terms then prevailing
at the time of the sale, at prices then related to the then-current market price
or in negotiated transactions and, in connection with such re-sales, may pay to
or receive from the purchasers of such shares commissions as described above. We
will pay all expenses of registration incurred in connection with this offering.
At the time a particular offer of the shares is made, to the extent
required, we will distribute a supplement to this prospectus which will identify
and set forth the aggregate amount of shares being offered and the terms of the
offering.
Sales of the shares at less than market prices may depress the market
price of our common stock. Moreover, generally the selling stockholders are not
restricted as to the number of shares which may be sold at any one time, and it
is possible that a significant number of shares could be sold at the same time.
However, to the extent the selling stockholders are affiliates of the Company,
such selling stockholders are subject to the volume limitations of Rule 144
under the Securities Act.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M, which may limit the timing of purchases and sales of the shares by the
selling shareholders and any other such person. Furthermore, Regulation M of the
Exchange Act may restrict the ability of any person engaged in the distribution
of the shares to engage in market-making activities with respect to the
particular shares being distributed for a period of up to five business days
prior to the commencement of such distribution. All of the foregoing may affect
the marketability of the shares and the ability of any person or entity to
engage in market-making activities with respect to the shares.
To comply with certain states' securities laws, if applicable, the
shares may be sold in any such jurisdictions only through registered or licensed
brokers or dealers. In certain states the shares may not be sold unless the
seller meets the applicable state notice and filing requirements.
LEGAL MATTERS
For purposes of this offering, Snell & Wilmer L.L.P., Salt Lake City,
Utah, counsel to the Company, is giving its opinion on the validity of the
shares.
20
EXPERTS
The audited financial statements as of June 30, 1998 and 1997 and for
each of the three years in the period ended June 30, 1998, incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said report. We
refer you to the report on those financial statements, dated May 3, 1999 which
includes an explanatory paragraph with respect to the uncertainty regarding the
Company's ability to continue as a going concern as discussed in Note 1 to the
financial statements.
21
We have not authorized any dealer, 3,024,338 Shares
salesperson or other person to give any
information or represent anything not
contained in this prospectus. You must
not rely on any unauthorized DIGITAL COURIER
information. This prospectus does not TECHNOLOGIES, INC.
offer to sell or buy any shares in any Common Stock
jurisdiction where it is unlawful. The
information in this prospectus is
current only as of its date.
-----------------------
PROSPECTUS
-----------------------
- -----------------------------------------------------
TABLE OF CONTENTS
PAGE
RISK FACTORS........................................2
FORWARD-LOOKING STATEMENTS.........................14
THE COMPANY........................................14
ABOUT THIS PROSPECTUS..............................16
WHERE YOU CAN FIND MORE INFORMATION................16
USE OF PROCEEDS....................................17
SELLING STOCKHOLDERS...............................17
PLAN OF DISTRIBUTION...............................19
LEGAL MATTERS......................................20
EXPERTS............................................21 May 5, 1999
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The Company estimates that expenses in connection with the transactions
described in this registration statement will be as follows. All expenses
incurred with respect to the transactions will be paid by the Company.
SEC Registration Fee.......................................$6,319
Printing Expenses.............................................500
Accounting Fees and Expenses...............................40,000
Legal Fees and Expenses....................................25,000
Transfer Agent Fees and Expenses............................1,500
Total...........................................$ 73,319
Item 15. Indemnification of Directors and Officers
The General Corporation Law of the State of Delaware provides for
indemnification as set forth in Section 145 thereof. The Company's Bylaws
provide for indemnification of the Company's directors, officers and others
against all expenses and amounts of liability incurred by them in connection
with any action, suit or proceeding in which they are involved by reason of
their affiliation with the Company. This indemnification is to the fullest
extent permitted by law upon receipt of an undertaking by or on behalf of such
person (and the heirs and legal representatives of such person) to repay such
advances if it shall ultimately be determined that such person is not entitled
to indemnification by the Company.
Insofar as indemnification for liabilities under the Securities Act may
be permitted to directors, officers or persons controlling the Company pursuant
to the foregoing provisions, the Company has been informed that in the opinion
of the Commission, such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibits Description
4.1 Interactive Marketing Agreement with America Online,
Inc., filed with the Form 10-K for the year ended June
30, 1998, incorporated herein by reference
4.2 Content License and Distribution Agreement with At Home
Corporation, filed with the Form 10-K for the year
ended June 30, 1998, incorporated herein by reference
11-1
4.3 Loan Agreement between the Company and Certain Lenders
dated as of October 22, 1998, filed with the Form 8-K
dated December 11, 1998, incorporated herein by
reference
4.4 Securities Purchase Agreement among the Company, Brown
Simpson Strategic Growth Fund, Ltd. And Brown Simpson
Strategic Growth Fund, L.P. dated as of November 23,
1998, as amended on December 2, 1998, filed with the
Form 8-K dated December 11, 1998, incorporated herein
by reference
5.1 Opinion of Snell & Wilmer L.L.P. 23.1 Consent of Arthur
Andersen L.L.P.
23.2 Consent of Snell & Wilmer L.L.P. (included in opinion
filed as Exhibit 5.1)
23.3 Consent of Hansen, Barnett & Maxwell
24.1 Power of Attorney (contained on signature page)
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a twenty percent (20%) change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, or Form F-3 and the information
11-2
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report, to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
(6) That, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, 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 Securities Act and will be governed by the final
adjudication of such issue.
11-3
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Amendment No. 2 to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Park City, Utah on May 4, 1999.
DIGITAL COURIER TECHNOLOGIES, INC.
a Delaware corporation
By: /s/ James A. Egide
-----------------------------
James A. Egide
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
and appoints Mitchell Edwards with full power of substitution and
re-substitution and full power to act without the other, as his true and lawful
attorney-in-fact and agent to act in his name, place and stead and to execute in
the name and on behalf of each person, individually and in each capacity stated
below, and to file, any and all amendments to this registration statement,
including any and all post-effective amendments and any registration statement
relating to the same offering as this registration statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act, as
amended, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing, ratifying and confirming all that
said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
below on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ * 5/03/99
- -----------------------------------------------------
James A. Egide Chief Executive Officer and Director
(Principal Executive Officer)
/s/ * 5/03/99
- -----------------------------------------------------
Michael D. Bard Senior Vice President and Controller (Chief
Accounting Officer)
/s/ Mitchell Edwards 5/03/99
- -----------------------------------------------------
Mitchell Edwards Executive Vice President and Director
(Chief Financial Officer)
/s/ * 5/03/99
- -----------------------------------------------------
Raymond J. Pittman Executive Vice President and Director
/s/ * 5/03/99
- -----------------------------------------------------
Kenneth M. Woolley Director
/s/ * 5/03/99
- -----------------------------------------------------
Glen Hartman Director
/s/ Allan J. Grosh 5/03/99
- -----------------------------------------------------
Allan J. Grosh Director
/s/ Mitchell Edwards 5/03/99
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*By: Mitchell Edwards
Attorney-in-Fact
EXHIBIT INDEX
Exhibit Number Exhibit
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4.1 Interactive Marketing Agreement with America
Online, Inc., filed with the Form 10-K for the year
ended June 30, 1998, incorporated herein by
reference
4.2 Content License and Distribution Agreement with At
Home Corporation, filed with the Form 10-K for the
year ended June 30, 1998, incorporated herein by
reference
4.3 Loan Agreement between the Company and Certain
Lenders dated as of October 22, 1998, filed with
the Form 8-K dated December 11, 1998, incorporated
herein by reference
4.3 Securities Purchase Agreement among the Company,
Brown Simpson Strategic Growth Fund, Ltd. And Brown
Simpson Strategic Growth Fund, L.P. dated as of
November 23, 1998, as amended on December 2, 1998,
filed with the Form 8-K dated December 11, 1998,
incorporated herein by reference
5.1 Opinion of Snell & Wilmer LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Snell & Wilmer LLP (included in Exhibit
5.1)
23.3 Consent of Hansen, Barnett & Maxwell
24 Power of Attorney (included on signature page of
registration statement)