As filed with the Securities and Exchange Commission on July 16, 2004
Registration No. 333-97565
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO FORM SB-2 ON
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PETMED EXPRESS, INC.
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(Exact name of registrant as specified in its charter)
Florida
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(State or other jurisdiction of incorporation or organization)
65-0680967
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(I.R.S. Employer Identification No.)
1441 S.W. 29th Avenue
Pompano Beach, Florida 33069
(954) 979-5995
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(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Mr. Menderes Akdag
Chief Executive Officer
PetMed Express, Inc.
1441 S.W. 29th Avenue
Pompano Beach, Florida 33069
(954) 979-5995
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Roxanne K. Beilly, Esq.
Schneider Weinberger LLP
2200 Corporate Boulevard
Suite 210
Boca Raton, Florida 33431
(561)362-9595 telephone
(561)361-9612 telecopier
From time to time after this registration statement becomes effective
(Approximate date of commencement of proposed sale to public)
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. [ ]
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until the
registration statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
Explanatory paragraph:
This post-effective amendment to the registration statement is being
filed for the purpose of bringing current the information which appeared in
the registrant's registration statement on Form SB-2, SEC file number
333-97565, as declared effective by the SEC on August 12, 2002, as amended
by Post-Effective Amendment No. 1 to the Form SB-2 on Form S-1 as filed by
the registrant with the SEC on August 22, 2003 (collectively, the "earlier
registration statements"). The earlier registration statements are hereby
incorporated by reference. This post-effective amendment is being filed on
Form S-3 as the registration is now eligible to use this form of
registration statement.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 16, 2004
PETMED EXPRESS, INC.
9,253,885 shares of common stock
This is an offering of common stock of PetMed Express. Since the
effective date of the registration statement which this prospectus is
a part of relating to the resale of 14,441,932 shares of our common
stock, including shares of our common stock issuable upon the exercise
of outstanding warrants and options, 4,989,733 shares have been sold,
including shares acquired through the exercise of outstanding options
and warrants, and warrants exercisable into 198,314 shares of our
common stock have expired. This prospectus relates to the resale of
the remaining 9,253,885 shares of our common stock, including 435,000
shares of common stock issuable upon the exercise of outstanding
options and warrants. All of the shares are being offered by the
selling security holders listed in the section of this prospectus
entitled "Selling Security Holders." We will not receive any of the
proceeds from the sale of the shares being offered by the selling
security holders.
For a description of the plan of distribution of the shares,
please see page 11 of this prospectus.
Our common stock is traded on the Nasdaq National Market under
the trading symbol "PETS." On July 15, 2004 the last sale price for
our common stock was $7.13 per share.
__________________________
Investment in our common stock involves a high degree of risk.
See "Risk Factors" beginning on page 7 of this prospectus to read
about risks of investing in our common stock.
__________________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this Prospectus is ________________ , 2004
PROSPECTUS SUMMARY
This summary highlights important features of this offering and
the information included in this prospectus. This summary does not
contain all of the information that you should consider before
investing in our common stock. You should read the entire prospectus
carefully, especially the risks of investing in our common stock
discussed under "Risk Factors."
BUSINESS
We are a leading nationwide pet pharmacy. We market prescription
and non-prescription pet medications, and health and nutritional
supplements for dogs and cats direct to the consumer. We offer
consumers an attractive alternative for obtaining pet medications in
terms of convenience, price, and speed of delivery. We market our
products through national television, online and direct mail
advertising campaigns, which aim to increase the recognition of the
"1-800-PetMeds" brand name, increase traffic on our website at
www.1800PetMeds.com, acquire new customers, and maximize repeat
purchases.
Our products
We offer a broad selection of products for dogs and cats. These
products include a majority of the well-known brands of medication,
such as Frontline[R], Advantage[R], Heartgard[R], Sentinel[R],
Interceptor[R], Program[R], Revolution[R], and Rimadyl[R]. Generally,
our prices are discounted up to 25% from the prices for medications
charged by veterinarians.
We research new products, and regularly select new products or
the latest generation of existing products to become part of our
product selection. In addition, we also refine our current products to
respond to changing consumer-purchasing habits. Our website is
designed to give us the flexibility to change featured products or
promotions. Our product line provides customers with a wide variety of
selections across the most popular health categories for dogs and
cats. Our current products include:
* Non-Prescription Medications (OTC): Flea and tick control
products, bone and joint care products, vitamins and nutritional
supplements, and hygiene products.
* Prescription Medications (RX): Heartworm treatments, thyroid
and arthritis medications, antibiotics, and other specialty
medications, as well as generic substitutes.
Sales
The following table provides a breakdown of the percentage of our
total sales by each category during the indicated periods:
Year Ended March 31,
--------------------
2004 2003 2002
---- ---- ----
Non-prescription medications 69% 64% 58%
Prescription medications 30% 29% 34%
Shipping and handling charges and other 1% 7% 8%
---- ---- ----
Total 100% 100% 100%
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We offer our products through three main sales channels,
including the PetMed Express catalog and postcards, customer service
representatives and the Internet, through our website. We have
designed both our catalog and website to provide a convenient, cost-
effective and informative shopping experience that encourages
consumers to purchase products important for a pet's health and
quality of life. We believe that these multiple channels allow us to
increase the visibility of our brand name and provide customers with
increased shopping flexibility and service.
The PetMed Express catalog
The PetMed Express catalog is a full-color catalog that features
approximately 600 products. The catalog is produced by a combination
of in-house writers, production artists and independent contractors.
We mail catalogs and postcards in response to requests generated from
our advertising and direct mail campaigns.
Contact center
We currently employ 111 customer service representatives in our
contact center. Our customer service representatives receive and
process inbound customer calls, facilitate our outbound campaigns
around maximizing customers' reorders on a consistent basis,
facilitate our live web chat and process customer e-mails. Our
telephone system is equipped with certain features including pop-up
screens and call blending capabilities that give us the ability to
efficiently utilize our customer service representatives' time,
providing quality customer service and support. Our customer service
representatives receive a base salary and are rewarded with
commissions for achieving targeted sales.
Our website
We seek to combine our product selection and pet health
information with the shopping ease of the Internet to deliver a
convenient and personalized shopping experience. Our website offers
health and nutritional product selections for dogs and cats, supported
by relevant editorial and easily obtainable or retrievable resource
information. From our home page, customers can search our website for
products and access resources on a variety of information on cats and
dogs. Customers can shop at our website by category, product line or
individual product. We attracted approximately 5.4 million visitors to
our website over the past 12 months (June 2003 to May 2004),
approximately 13% of those visitors placed an order, and our website
generated approximately 50% of our total sales for the same time
period.
In March 2004 we introduced a newly implemented, free service on
our website, called, "ASK THE VET" which is located at
www.1800PetMeds.com. Pet owners or anyone else can ask a question and
a veterinarian or pharmacist will personally answer it via email most
within 48 hours. Additionally, all questions and answers are
conveniently available for viewing on the website, which lists over 30
categories on a wide range of pet-related issues. Subjects include
allergies, fleas and ticks, heartworms and bone and joint care.
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Our customers
As of June 30, 2004, approximately 1,250,000 customers have
purchased from us within the last two years. We attracted
approximately 572,000 and 414,000 new customers in fiscal 2004 and
2003, respectively. Our customers are located throughout the United
States, with approximately 51% of customers residing in California,
Florida, Texas, New York, New Jersey, Pennsylvania, and Virginia. The
average retail purchase was approximately $73.
While our primary focus has been on retail customers, we have
also sold various non-prescription medications wholesale to a variety
of businesses, including pet stores, groomers and traditional brick
and mortar stores in the United States. For the fiscal year ended
March 31, 2004, the majority of our sales were made to retail
customers with less than 1% of our sales made to wholesale customers.
Marketing
The goal of our marketing strategy is to build brand recognition,
increase customer traffic, add new customers, build strong customer
loyalty, maximize reorders and develop incremental revenue
opportunities. We have an integrated marketing campaign that includes
television advertising, direct mailing, e-mailing and online
marketing.
Television advertising
Our television advertising is designed to build brand equity,
create awareness, and generate initial purchases of products via the
telephone and the Internet. We have used 30 and 15 second television
commercials to attract new customer orders, with the tag line "your
pet's same exact medications delivered to your home, saving you time
and money." Our television commercials typically focus on our ability
to rapidly deliver to customers the same medications offered by
veterinarians, but at reduced prices. We generally purchase
advertising on national cable channels to target our key demographic
groups. We believe that television advertising is particularly
effective and instrumental in building brand awareness.
Direct mailing and e-mailing
We use direct mailing and e-mailing to acquire customers and to
remind our existing customers to reorder.
Online marketing
We supplement our traditional advertising with online advertising
and marketing efforts. We are members of the LinkShare Network, which
is an affiliate program with merchant clients and affiliate websites.
This network is designed to develop and build a long-term, branded
affiliate program in order to increase online sales and establish an
Internet presence. The LinkShare Network enables us to establish link
arrangements with other websites, as well as portals and search
engines. We also make our brand available to internet consumers by
purchasing targeted keywords and achieving prominent placement on the
top search engines and search engine networks, including Google,
Microsoft Network, and Overture.
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Operations
Purchasing
We purchase our products from a variety of sources, including
certain manufacturers, domestic distributors, and wholesalers. We have
multiple suppliers for each of our products to obtain the lowest cost.
We purchase the majority of our health and nutritional supplements
directly from manufacturers. Having strong relationships with product
manufacturers will ensure the availability of adequate volume of
products ordered by our customers, and will enable us to provide more
and better product information. Historically substantially all the
major manufacturers of prescription and non-prescription medications
have declined to sell these products to direct marketing companies.
Part of our growth strategy includes developing direct relationships
with leading pharmaceutical manufacturers of the more popular
prescription and non- prescription medications.
Order processing
We provide our customers with toll-free telephone access to our
customer service representatives. Our call center generally operates
from 8:00 AM to 11:00 PM Monday through Thursday, 8:00 AM to 9:00 PM
on Friday, 9:00 AM to 6:00 PM on Saturday, and 10:00 AM to 5:00 PM on
Sunday, Eastern Standard Time. Our website allows customers to easily
browse and purchase substantially all of our products and services
online. Our website is designed to be fast, secure and easy to use
with order and shipping confirmations, and with online order tracking
capabilities.
Our order process consists of a few simple steps. A customer
first places a call to our toll-free telephone number or visits our
website. The following information is needed to process prescription
orders:
* general pet information,
* prescription, and
* the veterinarian's name and phone number.
This information is entered into our computer system, then our
pharmacists and pharmacy technicians verify all prescriptions. The
order process system checks for the verification for prescription
medication orders and a valid payment method for all orders. An
invoice is generated and printed in our fulfillment center, where
items are picked for shipping. The customer's order is then selected
from our inventory and shipped. Our customers enjoy the convenience of
rapid home delivery, with approximately 71% of all orders shipped
within 24 hours of ordering.
Warehousing and shipping
We inventory our products and fill all customer orders from our
40,000 square foot facility in Pompano Beach, Florida. We have an in-
house fulfillment and distribution operation, which is used to manage
the entire supply chain, beginning with the placement of the order,
continuing through order processing, and then fulfilling and shipping
of the product to the customer. We offer a variety of shipping
options, including next day delivery. We ship to anywhere in the
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United States served by the United States Postal Service, United
Parcel Service, and Federal Express. Priority orders are expedited in
our fulfillment process. Our goal is to ship the products the same day
that the order is received. For prescription medications, our goal is
to ship the product immediately after the prescription has been
authorized by the customer's veterinarian.
Customer service and support
We believe that a high level of customer service and support is
critical in retaining and expanding our customer base. Customer
service representatives participate in ongoing training programs under
the supervision of our training manager. These training sessions
include a variety of topics such as product knowledge, computer usage,
customer service tips and the relationship between PetMed Express and
veterinarians. Our customer service representatives respond to
customers' e-mails and calls that are related to order status, prices
and shipping. Our customer service representatives also respond to
customers through our live web chat. If our customer service
representatives are unable to respond to a customer's inquiry at the
time of the call, we strive to provide an answer within 24 hours. We
believe our customer service representatives are a valuable source of
feedback regarding customer satisfaction. Our customer returns and
credits average approximately 1.4% of total sales.
Technology
We utilize the latest integrated technologies in call center, e-
commerce, order entry, and inventory control/fulfillment operations.
Our systems are custom configured by us to optimize our computer
telephone integration and mail order processing. The systems are
designed to maintain a large database of specialized information and
process a large volume of orders efficiently and effectively. Our
systems provide our agents with real time product availability
information and updated customer information to enhance our customer
service. We also have an integrated direct connection for processing
credit cards to ensure that a valid credit card number and
authorization have been received at the same time our agents are on
the phone with the customers. Our information systems provide our
agents with records of all prior contact with a customer, including
the customer's address, phone number, e-mail address, fax number,
prescription information, order history, payment history and notes.
Our executive offices
Our executive offices are located at 1441 S.W. 29th Avenue,
Pompano Beach, Florida 33069. Our telephone number at that location is
(954) 979-5995. The information which appears on our web site is not
part of this prospectus.
COMMON STOCK OFFERED
Under this prospectus, the selling security holders listed in the
section of this prospectus entitled "Selling Security Holders" may
offer and sell up to 9,253,885 shares of our common stock, including
435,000 shares issuable upon the exercise of outstanding options and
warrants.
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USE OF PROCEEDS
We will not receive any proceeds from the sales of the common
stock offered by this prospectus. If, and when, the warrants and the
non-plan options are exercised by the selling shareholders, the
proceeds of $178,550 from the exercise shall be used by us for general
corporate purposes.
RISK FACTORS
Before you invest in our securities, you should be aware that
there are various risks. Additional risks and uncertainties not
presently known to us or that we currently believe to be immaterial
may also adversely affect our business. You should consider carefully
these risk factors, together with all of the other information
included in or incorporated by reference into this prospectus before
you decide to purchase our securities. If any of the following risks
and uncertainties develop into actual events, our business, financial
condition or results of operations could be materially adversely
affected.
You should not rely upon any forward-looking statements in this prospectus.
Certain statements in this prospectus contain or may contain
forward-looking statements that are subject to known and unknown
risks, uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements were
based on various factors and were derived utilizing numerous
assumptions and other factors that could cause our actual results to
differ materially from those in the forward-looking statements. These
factors include, but are not limited to, our ability to implement our
strategic initiatives, economic, political and market conditions and
fluctuations, government and industry regulation, interest rate risk,
U.S. and global competition, and other factors. Most of these factors
are difficult to predict accurately and are generally beyond our
control. You should consider the areas of risk described in connection
with any forward-looking statements that may be made herein. Readers
are cautioned not to place undue reliance on these forward-looking
statements and readers should carefully review this prospectus in its
entirety, including the risks described in "Risk Factors." Except for
our ongoing obligations to disclose material information under the
Federal securities laws, we undertake no obligation to release
publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events. For any
forward-looking statements contained in any document, we claim the
protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995.These
forward-looking statements speak only as of the date of this
prospectus, and you should not rely on these statements without also
considering the risks and uncertainties associated with these
statements and our business.
There can be no assurances that we can sustain profitable operations
in future periods.
While we reported net income of $5,814,000, $3,258,000, and
$825,000 for the years ended March 31, 2004, 2003, and 2002,
respectively, we reported a net loss of approximately $2,827,000 for
the year ended March 31, 2001. Our profitability during fiscal 2004
was due in part to an increase in our revenues of approximately
$39,019,000, or approximately 71%, from fiscal 2003. There are no
assurances we will continue to generate revenues at this increased
level, or that we will remain profitable during fiscal 2005 and
beyond. If our operations were to cease being profitable, our
liquidity in future periods would be adversely affected.
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Resistance from veterinarians to authorize prescriptions could cause
our sales to decrease and could materially adversely affect our
financial condition and results of operations.
Since we began our operations, from time to time some
veterinarians have resisted providing our customers with a copy of
their pet's prescription or authorizing the prescription to our
pharmacy staff, thereby effectively preventing us from filling such
prescriptions under state law. Sales of prescription medications
represented approximately 30%, 29% and 34% of our sales for the fiscal
years ended March 31, 2004, 2003 and 2002, respectively. Although
veterinarians in some states are required by law to provide the pet
owner with this prescription information, if the number of
veterinarians who refuse to authorize prescriptions should increase,
our sales could decrease and our financial condition and results of
operations may be materially adversely affected.
We may fail to comply with various state regulations covering the
dispensing of prescription pet medications. We could be subject to
reprimands, sanctions, probations, fines, suspensions or the loss of
one or more of our pharmacy licenses.
The sale and delivery of prescription pet medications is
generally governed by state laws and state regulations. Since our
pharmacy is located in the State of Florida, we are governed by the
laws and regulations of the State of Florida. Each prescription pet
medication sale we make is likely to be covered by the laws of the
state where the customer is located. The laws and regulations relating
to the sale and delivery of prescription pet medications vary from
state to state, but generally require that prescription pet
medications be dispensed with the authorization from a prescribing
veterinarian. To the extent that we are unable to maintain our license
with the Florida Board of Pharmacy as a community pharmacy, or if we
do not maintain the licenses granted by other state boards, or if we
become subject to actions by the FDA, or other enforcement regulators
our distribution of prescription medications to pet owners could
cease, which could have a material adverse effect on our operations.
While we make every effort to fully comply with the applicable
state rules and regulations, from time to time we have been the
subject of administrative complaints regarding the authorization of
prescriptions prior to shipment. We cannot assure you that we will not
continue to be the subject of administrative complaints in the future.
We cannot guarantee you that we will not be subject to reprimand,
sanctions, probations, or fines, or that one or more of our pharmacy
licenses may not be suspended or revoked.
We currently purchase a portion of our prescription and non-
prescription medications from third party distributors and we are not
an authorized distributor of these products. We do not have any
guaranteed supply of these medications at any pre-established prices.
For the fiscal year ended March 31, 2004 and 2003, the majority
of our sales were attributable to sales of prescription and non-
prescription medications. Historically, substantially all the major
pharmaceutical manufacturers have declined to sell prescription and
non-prescription pet medications directly to us. In order to assure a
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supply of these products, we purchase medications from various
secondary sources, including a variety of domestic distributors. Our
business strategy includes seeking to establish direct purchasing
arrangements with major pet pharmaceutical manufacturing companies. If
we are not successful in achieving this goal, we will continue to rely
upon distributors.
We cannot guarantee that if we continue to purchase prescription
and non-prescription pet medications from secondary sources that we
will be able to purchase an adequate supply to meet our customers'
demands, or that we will be able to purchase these products at
competitive prices. As these products represent a significant portion
of our sales, our failure to fill customer orders for these products
could adversely impact our sales. If we should be forced to pay higher
prices for these products to ensure an adequate supply, we cannot
guarantee that we will be able to pass along to our customers any
increases in the prices we pay for these medications. This inability
to pass along increased prices could materially adversely affect our
results of operations.
Significant portions of our sales are made to residents of seven
states. If we should lose our pharmacy license in one or more of these
states, our financial condition and results of operations would be
materially adversely affected.
While we ship pet medications to customers in all 50 states,
approximately 51% of our sales for the fiscal year ended March 31,
2004 were made to customers located in the states of California,
Florida, Texas, New York, New Jersey, Pennsylvania, and Virginia. If
for any reason our license to operate a pharmacy in one or more of
those states should be suspended or revoked, or if it is not renewed,
our financial condition and results of operations may be materially
adversely affected.
We expect to continue to experience volatility in our stock price.
Historically, there has been volatility in the market price for
our common stock. Our quarterly operating results, changes in general
conditions in the economy, the financial markets or the marketing
industry, or other developments affecting us or our competitors, could
cause the market price of our common stock to fluctuate substantially.
We expect to experience significant fluctuations in our future
quarterly operating results due to a variety of factors. Factors that
may adversely affect our quarterly operating results include:
- our ability to obtain new customers at a reasonable cost,
retain existing customers, or encourage reorders;
- our ability to increase the number of visitors to our web
site, or our ability to convert visitors to our website into
customers;
- the mix of medications and other pet products sold by us;
- our ability to manage inventory levels;
- our ability to adequately maintain, upgrade and develop our
web site, the systems we use to process customer's orders
and payments, or our computer network;
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- increased competition within our market niche;
- increases in the cost of advertising;
- the amount and timing of operating costs and capital
expenditures related to expansion of our product line or
operations; and
- disruption in our toll-free telephone service, technical
difficulties, systems and Internet outages or slowdowns.
As a result of these factors, in one or more future quarters, our
operating results may fall below the expectations of securities
analysts and investors. In this event, the market price of our common
stock would likely be materially adversely affected. In addition, the
stock market in general and the market prices for Internet-related and
retail companies in particular, have each experienced extreme
volatility that often has been unrelated to the operating performance
of those companies. These broad market and industry fluctuations may
adversely affect the price of our common stock, regardless of our
operating performance.
If the selling security holders all elect to sell their shares of our
common stock at the same time, the market price of our shares may
decrease.
It is possible that the selling security holders will offer all
of their shares for sale. Further, because it is possible that a
significant number of shares could be sold at the same time hereunder,
the sales, or the possibility thereof, may have a depressive effect on
the market price of our common stock.
SELLING SECURITY HOLDERS
At July 15, 2004 we had 22,068,723 shares of common stock
outstanding. This prospectus relates to the periodic offers and sales
of up to 9,253,885 shares of common stock by the selling security
holders listed below and their pledgees, donees and other successors
in interest. Included in the shares which may be offered and sold by
the selling security holders are 8,818,885 shares of our common stock
presently outstanding and 435,000 shares which are issuable upon the
exercise of outstanding options and warrants.
The following table sets forth:
- the name of each selling security holder,
- the number of shares owned, and
- the number of shares being registered for resale by each
selling security holder.
We may amend or supplement this prospectus from time to time to
update the disclosure set forth herein. All of the shares being
registered for resale under this prospectus for the selling security
holders may be offered hereby. Because the selling security holders
may sell some or all of the shares owned by them which are included in
this prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the
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shares, no estimate can be given as to the number of shares being
offered hereby that will be held by the selling security holders upon
termination of any offering made hereby. We have, therefore, for the
purposes of the following table assumed that the selling security
holders will, if applicable, exercise the options described below, and
sell all of the shares owned by them which are being offered hereby,
but will not sell any other shares of our common stock that they
presently own. Beneficial ownership is determined in accordance with
the rules of the SEC and generally includes voting or investment power
with respect to securities and includes any securities which the
person has the right to acquire within 60 days through the conversion
or exercise of any security or other right. The information as to the
number of shares of our common stock owned by each selling security
holder is based upon the information contained in a record list of our
shareholders.
Number Percentage Shares Shares to Percentage
of shares owned before to be be owned owned after
Name of selling security holder owned offering offered after offering offering
------------------------------- --------- ------------ ------- -------------- -----------
Adam Terris (1) 48,333 * 45,000 3,333 *
Wayne Horne(2) 351,378 1.6% 201,378 150,000 *
Nico Pronk(2) 430,158 1.9% 280,158 150,000 *
Mike Cerisano 83,949 * 83,949 - -
Tricon Holdings, LLC (3) 6,927,500 31.4% 6,927,500 - -
Guven Kivilcim (4) 1,715,900 7.6% 1,715,900 - -
* represents less than 1%
(1) Includes 35,000 shares of common stock underlying an option
exercisable at $1.33 per share. The option expires on April 7,
2005. Mr. Terris is an employee of our company.
(2) Messrs. Horne and Pronk are principals of Noble International
Investments, Inc., an NASD member firm which provided investment
banking services for us in the past.
(3) Tricon Holdings, LLC is a principal shareholder of our company.
(4) Mr. Kivilcim was a member of our board of directors from November
2000 to August 2003. Includes 400,000 shares of common stock
underlying a warrant exercisable at $.33 per share. The warrant
expires on November 22, 2005.
None of the selling security holders has, or within the past
three years has had, any position, office or other material
relationship with us or any of our predecessors or affiliates other
than as set forth above.
We have agreed to pay full costs and expenses, incentives to the
issuance, offer, sale and delivery of the shares, including all fees
and expenses in preparing, filing and printing the registration
statement and prospectus and related exhibits, amendments and
supplements thereto and mailing of those items. We will not pay
selling commissions and expenses associated with any sale by the
selling security holders.
PLAN OF DISTRIBUTION
The shares offered hereby by the selling security holders may be
sold from time to time by the selling security holders, or by
pledgees, donees, transferees or other successors in interest. These
11
sales may be made on one or more exchanges or in the over-the-counter
market, or otherwise at prices and at terms then prevailing or at
prices related to the then current market price, or in negotiated
transactions. The shares may be sold by one or more of the following
methods, including, without limitation:
- a block trade in which the broker-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;
- purchases by a broker or dealer as principal and resale by a
broker or dealer for its account under this prospectus;
- face-to-face or other direct transactions between the
selling security holders and purchasers without a
broker-dealer or other intermediary; and
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers.
In effecting sales, brokers or dealers engaged by the selling
security holders may arrange for other brokers or dealers to
participate in the resales. Brokers, dealers or agents may receive
compensation in the form of commissions, discounts or concessions from
selling security holders in amounts to be negotiated in connection
with the sale. The selling security holders and these broker-dealers
and agents and any other participating broker-dealers, or agents may
be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, in connection with the sales. In addition, any securities
covered by this prospectus that qualify for sale under Rule 144 might
be sold under Rule 144 rather than under this prospectus.
In connection with distributions of the shares or otherwise, the
selling security holders may enter into hedging transactions with
broker-dealers. In connection with the transactions, broker-dealers
may engage in short sales of the shares registered hereunder in the
course of hedging the positions they assume with selling security
holders. The selling security holders may also sell shares short and
deliver the shares to close out the positions. We have been advised by
each of the selling security holders that they do not have any open
short positions in our common stock as of the date of this prospectus.
The selling security holders may enter into option or other
transactions with broker-dealers which require the delivery to the
broker-dealer of the shares registered hereunder, which the
broker-dealer may resell under this prospectus. The selling security
holders may also pledge the shares registered hereunder to a broker or
dealer and upon a default, the broker or dealer may effect sales of
the pledged shares under this prospectus.
Information as to whether an underwriter(s) who may be selected
by the selling security holders, or any other broker-dealer, is acting
as principal or agent for the selling security holders, the
compensation to be received by underwriters who may be selected by the
selling security holders, or any broker-dealer, acting as principal or
agent for the selling security holders and the compensation to be
received by other broker-dealers, in the event the compensation of
other broker-dealers is in excess of usual and customary commissions,
will, to the extent required, be set forth in a supplement to this
prospectus. Any dealer or broker participating in any distribution of
the shares may be required to deliver a copy of this prospectus,
including the supplement, if any, to any person who purchases any of
the shares from or through a dealer or broker.
12
We have advised the selling security holders that during the time
as they may be engaged in a distribution of the shares included herein
they are required to comply with Regulation M of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). With certain
exceptions, Regulation M precludes any selling security holders, any
affiliated purchasers and any broker-dealer or other person who
participates in the distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase any security
which is the subject of the distribution until the entire distribution
is complete. Regulation M also prohibits any bids or purchase made in
order to stabilize the price of a security in connection with an at
the market offering such as this offering. All of the foregoing may
affect the marketability of our common stock.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information
we file with them, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information filed with the SEC will update and
supersede this information. We incorporate by reference the documents
listed below, any of such documents filed since the date this
registration statement was filed and any future filings with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 until the offering is completed.
- our annual report on Form 10-K for the fiscal year ended
March 31, 2004.
This prospectus may contain information that updates, modifies or
is contrary to information in one or more of the documents
incorporated by reference in this prospectus. Reports we file with
the SEC after the date of this prospectus may also contain information
that updates, modifies or is contrary to information in this
prospectus or in documents incorporated by reference in this
prospectus. Investors should review these reports as they may
disclose a change in our business, prospects, financial condition or
other affairs after the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
Upon your written or oral request, we will provide at no cost to
you a copy of any and all of the information that is incorporated by
reference in this prospectus, not including exhibits to such
information unless those exhibits are specifically incorporated herein
by reference. Requests for such documents should be directed to
Corporate Secretary, PetMed Express, Inc., 1441 SW 29 Avenue, Pompano
Beach, Florida 33069, telephone number (954) 979-5995. Please note
that additional information can be obtained from our website at
www.1800PetMeds.com.
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. Our reports, proxy statements and
other information may be accessed over the Internet at a site
maintained by the SEC at http://www.sec.gov. You may also read and
copy any materials we file with the SEC at the following public SEC
reference room:
Public Reference Room
450 Fifth Street, N.W.
Washington, D.C. 20549
13
You may obtain further information about the operation of the
SEC's public reference room by calling the SEC at 1-800-SEC-0330.
We have filed a registration statement under the Securities Act
of 1933 with the SEC with respect to the shares to be sold by the
selling security holders. This prospectus has been filed as part of
the registration statement. This prospectus does not contain all of
the information set forth in the registration statement because
certain parts of the registration statement are omitted in accordance
with the rules and regulations of the SEC. The registration statement
is available for inspection and copying as set forth above.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby
will be passed upon for us by Schneider Weinberger LLP, Boca Raton,
Florida.
EXPERTS
The consolidated balance sheets of PetMed Express, Inc. and
subsidiaries as of March 31, 2004 and 2003 and the related
consolidated statements of income, changes in stockholders' equity and
cash flows for each of the three years in the period ended March 31,
2004 which are incorporated by reference in this prospectus have been
audited by Goldstein Golub Kessler LLP, independent registered public
accounting firm, as indicated in their report with respect thereto,
and are incorporated herein in reliance upon the authority of said
firm as experts in giving said report.
14
Table of Contents
9,253,885 Shares
Page No.
Prospectus Summary . . . . . . . . . . . . . . 2 PETMED EXPRESS, INC.
Business . . . . . . . . . . . . . . . . . . . 2
Common Stock Offered . . . . . . . . . . . . . 6
Use of Proceeds. . . . . . . . . . . . . . . . 7
Risk Factors . . . . . . . . . . . . . . . . . 7
Selling Security Holders . . . . . . . . . . .10 Common Stock
Plan of Distribution . . . . . . . . . . . . .11
Incorporation of Certain Information
by Reference. . . . . . . . . . . . . . .13
Where You Can Find More Information. . . . . .13 ______________, 2004.
Legal Matters. . . . . . . . . . . . . . . . .14
Experts. . . . . . . . . . . . . . . . . . . .14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Registration Fees - Securities and Exchange Commission $ 2,670
Legal Fees and Expenses 12,000*
Accounting Fees and Expenses 12,000*
Financial Printing 2,000*
Transfer Agent Fees 500*
Blue Sky Fees and Expenses 0
Miscellaneous 1,000*
-------
Total $30,170
=======
* estimated
Item 15. Indemnification of Directors and Officers.
The Florida Business Corporation Act permits the indemnification
of directors, employees, officers and agents of a Florida corporation.
Our articles of incorporation and bylaws provide that we shall
indemnify to the fullest extent permitted by the Florida Business
Corporation Act any person whom we may indemnify under the act.
The provisions of Florida law that authorize indemnification do
not eliminate the duty of care of a director, and in appropriate
circumstances equitable remedies including injunctive or other forms
of non-monetary relief will remain available. In addition, each
director will continue to be subject to liability for:
- violations of criminal laws, unless the director has
reasonable cause to believe that his or her conduct was
lawful or had no reasonable cause to believe his conduct was
unlawful,
- deriving an improper personal benefit from a transaction,
- voting for or assenting to an unlawful distribution, and
- willful misconduct or conscious disregard for our best
interests in a proceeding by or in our right to procure a
judgment in its favor or in a proceeding by or in the right
of a shareholder.
The statute does not affect a director's responsibilities under
any other law, including federal securities laws.
The effect of Florida law, our articles of incorporation and our
bylaws is to require us to indemnify our officers and directors for
any claim arising against those persons in their official capacities
if the person acted in good faith and in a manner that he or she
reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
II-1
To the extent indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers or control
persons, we have been informed that in the opinion of the SEC, this
indemnification is against public policy as expressed in the
Securities Act and is unenforceable.
Item 16. Exhibits and Consolidated Financial Statement Schedules.
Exhibit No. Description
----------- -----------
4.1 Specimen common stock certificate (1)
4.2 Form of Non-Plan Option(2)
4.3 Form of Warrant (2)
5.1 Opinion of Schneider Weinberger LLP*
23.1 Consent of Schneider Weinberger LLP (included in Exhibit 5.1)
23.2 Consent of Goldstein Golub Kessler LLP *
* Filed herewith
(1) Incorporated by reference to the registrant's registration
statement on Form 10-SB, as amended, SEC file no. 000-28827.
(2) Incorporated by reference to the registrant's registration
statement on Form SB-2, as amended, SEC file no. 333-97565.
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 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 the volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
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;
II-2
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the registration statement is on Form S-
3, Form S-8 or Form F-3, and the information required to be included
in the post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
2. That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities that remain unsold at the termination
of the offering.
The undersigned registration hereby undertakes that, for the
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
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 Pompano Beach
and the State of Florida, on the 16th day of July, 2004.
PETMED EXPRESS, INC.
By: /s/ Menderes Akdag
-------------------
Menderes Akdag
Chief Executive Officer (Principal
Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chief Executive Officer
and director (Principal July 16, 2004
/s/ Menderes Akdag Executive Officer)
------------------------
Menderes Akdag
Chairman of the Board July 16, 2004
/s/ Marc Puleo and President
------------------------
Marc Puleo, M.D.
Chief Financial Officer
/s/ Bruce S. Rosenbloom and Treasurer (Principal July 16, 2004
------------------------ Financial and Accounting Officer)
Bruce S. Rosenbloom
/s/ Robert C. Schweitzer Director July 16, 2004
------------------------
Robert C. Schweitzer
/s/ Ronald J. Korn Director July 16, 2004
------------------------
Ronald J. Korn
/s/ Gian Fulgoni Director July 16, 2004
------------------------
Gian Fulgoni
/s/ Frank J. Formica Director July 16, 2004
------------------------
Frank J. Formica
II-4
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
5.1 Opinion of Schneider Weinberger LLP
23.1 Consent of Goldstein Golub Kessler LLP
23.2 Consent of Schneider Weinberger LLP (included in Exhibit 5.1)