AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 7, 2007
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
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 65-0680967
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(State of incorporation) (I.R.S. Employer Identification No.)
1441 S.W. 29th Avenue
Pompano Beach, Florida 33069
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(Address, including zip code, of Principal Executive Offices)
2006 EMPLOYEE EQUITY COMPENSATION
RESTRICTED STOCK PLAN
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(Full title of the plan)
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, and telephone number, including area code,
of agent for service)
Copies to:
Roxanne K. Beilly, Esq.
Schneider Weinberger and Beilly LLP
2200 Corporate Boulevard, Suite 210
Boca Raton, Florida 33431
(561)362-9595 telephone
(561)361-9612 telecopier
CALCULATION OF REGISTRATION FEE
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Title of securities Amount to be Proposed Proposed Amount of
to be registered registered maximum maximum registration
offering price aggregate fee
per share (1) offering price (1)
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Common stock, par value 1,000,000 $14.89 $14,890,000 $457.12
$0.001 per share (2)
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(1) Estimated solely for the purpose of calculating the
registration fee. Pursuant to Rule 457 under the Act, the
offering price and registration fee are based on a price of
$14.89 per share, which price is an average of the high and low
prices of the Common Stock as reported by the NASDAQ Global
Select Market on August 6, 2007.
(2) Pursuant to Rule 416, there are also being registered such
additional and indeterminable number of shares of common stock as
may be issuable due to adjustments for changes resulting from
stock dividends, stock splits and/or similar transactions.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
This Registration Statement registers 1,000,000 shares of
common stock, $0.001 par value (the "Shares"), of PetMed Express,
Inc. (the "Company", "we", "our" or "us") that may be issued and
sold under the PetMed Express, Inc. 2006 Employee Equity
Compensation Restricted Stock Plan (the "Plan"), and any
additional shares which may be issued under the Plan as a result
of a stock split, stock dividend or other anti-dilution
provision.
Item 1. Plan Information
Items 1 and 2 of this Part I, and the documents incorporated
herein by reference pursuant to Item 3 of Part II of this Form S-
8, constitute the first prospectus ("Plan Prospectus") relating
to issuances to our employees, directors, consultants and others
of up to 803,975 shares of common stock pursuant to the Plan.
Pursuant to the requirements of Form S-8 and Rule 428, we will
deliver or cause to be delivered to Plan participants any
required information as specified by Rule 428(b)(1). The second
prospectus ("Resale Prospectus"), may be used in connection with
reoffers and resales, made on a delayed or continuous basis in
the future, as provided in Rule 415 under the Securities Act of
1933, as amended ("Securities Act"), of shares of common stock of
the Company acquired by Plan participants who are our
"affiliates" as such term is defined in Rule 405 under the
Securities Act, which shares constitute "control securities" as
such term is defined in General Instruction C to Form S-8. The
Plan Prospectus has been omitted from this Registration Statement
as permitted by Part I of Form S-8. The Resale Prospectus is
filed as part of this Registration Statement as required by Form
S-8.
Item 2. Company Information and Employee Plan Annual Information
We will provide without charge, upon written or oral request,
the documents incorporated by reference in Item 3 of Part II of
this Registration Statement. These documents are incorporated by
reference in the Section 10(a) Plan Prospectus. We will also
provide without charge, upon written or oral request, all other
documents required to be delivered to recipients pursuant to Rule
428(b). Any and all such requests shall be directed to PetMed
Express, Inc., attention Bruce Rosenbloom, Chief Financial
Officer, at our principal office at 1441 S.W. 29th Avenue,
Pompano Beach, Florida 33069, telephone number (954) 979-5995.
2
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED
ON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized by us to give any information or
to make any representation other than as contained in this
prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized
by us. Neither the delivery of this prospectus nor any
distribution of the shares of common stock issuable under the
terms of the Plan shall, under any circumstances, create any
implication that there has been no change in our affairs since
the date hereof.
Our principal offices are located at 1441 S.W. 29th Avenue,
Pompano Beach, Florida 33069, telephone number (954) 979-5995.
Our fiscal year end is March 31. Information which appears on
our website is not part of this prospectus.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES
IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH STATE.
3
REOFFER PROSPECTUS
PETMED EXPRESS, INC.
1441 S.W. 29th Avenue
Pompano Beach, Florida 33069
(954) 979-5995
1,000,000 Shares of Common Stock
This prospectus forms a part of a Registration Statement which
registers an aggregate of 1,000,000 shares of common stock issued
or issuable from time to time under the PetMed Express, Inc. 2006
Employee Equity Compensation Restricted Stock Plan (the "Plan").
This prospectus covers the resale of shares of common stock
granted under the Plan (1) by persons who are our "affiliates"
within the meaning of federal securities laws or (2) by persons
who hold "restricted securities" acquired under the Plan whether
or not held by affiliates. We will not receive any proceeds from
sales of shares by selling security holders. Selling security
holders may sell all or a portion of the shares from time to time
either directly in private transactions, or through one or more
brokers or dealers on the NASDAQ Global Select Market, or any
other market or exchange on which the common stock is quoted or
listed for trading, at such prices and upon such terms as may be
obtainable. These sales may be at fixed prices (which may be
changed), at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated
prices.
Our common stock is traded on the NASDAQ Global Select Market
under the symbol "PETS." On August 6, 2007, the closing price of
a share of our common stock on the NASDAQ Global Select Market
was $15.01 per share.
Upon any sale of the common stock by a selling security
holder, any participating agents, brokers, dealers or market
makers may be deemed to be underwriters as that term is defined
in the Securities Act, and commissions or discounts or any profit
realized on the resale of such securities purchased by them may
be deemed to be underwriting commissions or discounts under the
Securities Act.
No underwriter is being utilized in connection with this
offering. We will pay all expenses incurred in connection with
this offering and the preparation of this Resale Prospectus.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE
"RISK FACTORS" BEGINNING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER IN SUCH STATE.
The date of this prospectus is August 7, 2007.
When used in this prospectus, the terms "PetMed Express,"
"we," "our," and "us" refer to PetMed Express, Inc., a Florida
corporation, and our subsidiaries. The information which appears
on our website is not part of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"),
and, in accordance therewith, we file reports, proxy statements
and other information with the Securities and Exchange
Commission. Our SEC filings are available over the Internet at
the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at its public reference
facilities:
Public Reference Room Office
100 F Street, N.E.
Room 1580
Washington, D.C. 20549
You may also obtain copies of the documents at prescribed
rates by writing to the Public Reference Section of the SEC at
100 F Street, N.E., Room 1580, Washington, D.C. 20549. Callers in
the United States can also call 1-202-551-8090 for further
information on the operations of the public reference facilities.
We have filed with the Commission a Registration Statement on
Form S-8 under the Securities Act, to register with the
Commission the resale of the shares of the Common Stock described
in this Resale Prospectus. This Resale Prospectus is part of that
Registration Statement, and provides you with a general
description of the shares of the Common Stock being registered,
but does not include all of the information you can find in the
Registration Statement or the exhibits. You should refer to the
Registration Statement and its exhibits for more information
about us, and the shares of Common Stock being registered.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the SEC are
incorporated herein by reference and made a part hereof:
- The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2007, filed on June 4, 2007,
- The Company's Proxy Statement for the Company's Annual
Meeting of Stockholders, filed with the Commission on June 29,
2007, and
- The updated description of common stock contained in our
Registration Statement on Form 10-SB12G, filed on January 10,
2000, including any amendment or report filed for the purpose of
updating such description.
In addition, all reports and documents filed by us pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the
respective date of filing of such documents. Any statement
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Resale Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such
statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part
of this prospectus. Nothing in this Resale Prospectus shall be
deemed to incorporate information furnished by us, but not filed
with the Commission, pursuant to Items 2.02, 7.01 or 9.01 of Form
8-K.
2
We hereby undertake to provide without charge to each person,
including any beneficial owner, to whom a copy of the Resale
Prospectus has been delivered, on the written request of any such
person, a copy of any or all of the documents referred to above
which have been or may be incorporated by reference in this
Resale Prospectus, other than exhibits to such documents.
Written requests for such copies should be directed to the
Corporate Secretary, PetMed Express, Inc., 1441 S.W. 29th Avenue,
Pompano Beach, Florida 33069, telephone number (954) 979-5995.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Resale Prospectus and the documents incorporated by
reference herein contain "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995
and the provisions of Section 27A of the Securities Act and
Section 21E of the Exchange Act (which Sections were adopted as
part of Private Securities Litigation Reform Act of 1995). While
management has based any forward-looking statements contained
herein on its current expectations, the information on which such
expectations were based may change. These forward-looking
statements rely on a number of assumptions concerning future
events and are subject to a number of risks, uncertainties, and
other factors, many of which are outside of our control, that
could cause actual results to materially differ from such
statements. Such risks, uncertainties, and other factors include,
but are not necessarily limited to, those set forth under the
caption "Risk Factors." In addition, we operate in a highly
competitive and rapidly changing environment, and new risks may
arise. Accordingly, investors should not place any reliance on
forward-looking statements as a prediction of actual results. We
disclaim any intention to, and undertake no obligation to, update
or revise any forward-looking statement.
THE COMPANY
PetMed Express, Inc. and subsidiaries, d/b/a 1-800-PetMeds, is
a leading nationwide pet pharmacy. The Company markets
prescription and non-prescription pet medications, and other
health products for dogs, cats, and horses direct to the
consumer. The Company offers consumers an attractive alternative
for obtaining pet medications in terms of convenience, price, and
speed of delivery. The Company markets its products through
national television, online, and direct mail/print advertising
campaigns, which aim to increase the recognition of the "1-800-
PetMeds" brand name, increase traffic on its website at
www.1800petmeds.com, acquire new customers, and maximize repeat
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purchases.
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 this prospectus before you decide
to purchase our securities. If any of the following risks and
uncertainties develops into actual events, our business,
financial condition or results of operations could be materially
adversely affected and you could lose your entire investment in
our company.
There can be no assurances that we can sustain profitable
operations in future periods.
We reported net income of $14,444,000, $12,064,000, and
$8,010,000 for the fiscal years ended March 31, 2007, 2006, and
2005, respectively. Our profitability during fiscal 2007 was due
to increases in our reorder and new order revenue. There are no
assurances we will continue to generate revenues at this
increased level, or that we will remain profitable during fiscal
2008 and beyond. If our operations were to cease being
profitable, our liquidity in future periods would be 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.
3
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, the Company is
governed by the laws and regulations of the State of Florida.
Each prescription pet medication sale we make is likely also 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 as a
community pharmacy with the Florida Board of 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, laws 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 years ended March 31, 2007 and 2006, 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 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 secondary
sources.
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 are 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 financial
condition and results of operations.
Our failure to properly manage our inventory may result in
excessive inventory carrying costs, which could materially
adversely affect our financial condition and results of
operations.
Our current product line contains approximately 750 SKUs. A
significant portion of our sales is attributable to products
representing approximately 90 SKUs. We need to properly manage
our inventory to provide an adequate supply of these products and
avoid excessive inventory of the products representing the
balance of the SKUs. We generally place orders for products with
our suppliers based upon our internal estimates of the amounts of
inventory we will need to fill future orders. These estimates
may be significantly different from the actual orders we receive.
In the event that subsequent orders fall short of original
estimates, we may be left with excess inventory. Significant
excess inventory could result in price discounts and increased
inventory carrying costs. Similarly, if we fail to have an
adequate supply of some SKUs, we may lose sales opportunities.
We cannot guarantee that we will maintain appropriate inventory
levels. Any failure on our part to maintain appropriate
inventory levels may have a material adverse effect on our
financial condition and results of operations.
4
Resistance from veterinarians to authorize prescriptions, or
attempts/efforts on their part to discourage pet owners to
purchase from internet pharmacies could cause our sales to
decrease and could materially adversely affect our financial
condition and results of operations.
Since we began our operations 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. Some veterinarians have also tried to discourage pet
owners from purchasing from internet pharmacies. Sales of
prescription medications represented approximately 29% of our
sales for the fiscal year. 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, or if
veterinarians are successful in discouraging pet owners from
purchasing from internet pharmacies, our sales could decrease and
our financial condition and results of operations may be
materially adversely affected.
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 50% of our sales for the fiscal year ended March
31, 2007 were made to customers located in the states of
California, Florida, Texas, New York, Pennsylvania, New Jersey,
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 face significant competition from veterinarians and
traditional and online retailers and may not be able to compete
profitably with them.
We compete directly and indirectly with veterinarians for the
sale of pet medications and other health products. Veterinarians
hold a competitive advantage over us because many pet owners may
find it more convenient or preferable to purchase these products
directly from their veterinarians at the time of an office visit.
We also compete directly and indirectly with both online and
traditional retailers of pet medications and health and
nutritional supplements. Both online and traditional retailers
may hold a competitive advantage over us because of longer
operating histories, established brand names, greater resources,
and/or an established customer base. Online retailers may have a
competitive advantage over us because of established affiliate
relationships to drive traffic to their website. Traditional
retailers may hold a competitive advantage over us because pet
owners may prefer to purchase these products from a store instead
of online or through catalog or telephone methods. In order to
effectively compete in the future, we may be required to offer
promotions and other incentives, which may result in lower
operating margins or adversely affect the results of operations.
We also face a significant challenge from our competitors
forming alliances with each other, such as those between online
and traditional retailers. These relationships may enable both
their retail and online stores to negotiate better pricing and
better terms from suppliers by aggregating the demand for
products and negotiating volume discounts which could be a
competitive disadvantage to us.
The content of our website could expose us to various kinds of
liability, which, if prosecuted successfully, could negatively
impact our business.
Because we post product information and other content on our
website, we face potential liability for negligence, copyright
infringement, patent infringement, trademark infringement,
defamation, and/or other claims based on the nature and content
of the materials we post. Various claims have been brought, and
sometimes successfully prosecuted, against Internet content
distributors. We could be exposed to liability with respect to
the unauthorized duplication of content or unauthorized use of
other parties' proprietary technology. Although we maintain
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. Any
5
imposition of liability that is not covered by insurance, or is
in excess of insurance coverage, could materially adversely
affect our financial condition and results of operations.
We may not be able to protect our intellectual property rights,
and we may be found to infringe on the proprietary rights of
others.
We rely on a combination of trademarks, trade secrets,
copyright laws, and contractual restrictions to protect our
intellectual property rights. These afford only limited
protection. Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy our non-
prescription private label generic equivalents, when and if
developed, as well as aspects of our sales formats, or to obtain
and use information that we regard as proprietary, including the
technology used to operate our website and our content, and our
trademarks.
Litigation or proceedings before the United States Patent and
Trademark Office or other bodies may be necessary in the future
to enforce our intellectual property rights, to protect our trade
secrets and domain names, and to determine the validity and scope
of the proprietary rights of others. Any litigation or adverse
priority proceeding could result in substantial costs and
diversion of resources, and could seriously harm our business and
operating results.
Third parties may also claim infringement by us with respect
to past, current, or future technologies. We expect that
participants in our markets will be increasingly involved in
infringement claims as the number of services and competitors in
our industry segment grows. Any claim, whether meritorious or
not, could be time-consuming, result in costly litigation, cause
service upgrade delays, or require us to enter into royalty or
licensing agreements. These royalty or licensing agreements
might not be available on terms acceptable to us or at all.
If we are unable to protect our Internet addresses or to prevent
others from using Internet addresses that are confusingly
similar, our business may be adversely impacted.
Our Internet addresses, www.1800petmeds.com,
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www.1888petmeds.com, www.petmedexpress.com, and www.petmeds.com
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are critical to our brand recognition and our overall success.
If we are unable to protect these Internet addresses, our
competitors could capitalize on our brand recognition. We are
aware of substantially similar Internet addresses, including
www.petmed.com, used by competitors. Governmental agencies and
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their designees generally regulate the acquisition and
maintenance of Internet addresses. The regulation of Internet
addresses in the United States and in foreign countries has
changed, and may undergo further change in the near future.
Furthermore, the relationship between regulations governing
Internet addresses and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we may not be able to
protect our own Internet addresses, or prevent third parties from
acquiring Internet addresses that are confusingly similar to,
infringe upon, or otherwise decrease the value of our Internet
addresses.
Since all of our operations are housed in a single location, we
are more susceptible to business interruption in the event of
damage to or disruptions in our facility.
Our headquarters and distribution center are located in the
same building in South Florida, and all of our shipments of
products to our customers are made from this sole distribution
center. We have no present plans to establish any additional
distribution centers or offices. Because we consolidate our
operations in one location, we are more susceptible to power and
equipment failures, and business interruptions in the event of
fires, floods, and other natural disasters than if we had
additional locations. Furthermore, because we are located in
South Florida, which is a hurricane-sensitive area, we are
particularly susceptible to the risk of damage to, or total
destruction of, our headquarters and distribution center and
surrounding transportation infrastructure caused by a hurricane.
We cannot assure you that we are adequately insured to cover the
amount of any losses relating to any of these potential events,
business interruptions resulting from damage to or destruction of
our headquarters and distribution center, or power and equipment
failures relating to our call center or websites, or
interruptions or disruptions to major transportation
infrastructure, or other events that do not occur on our
premises.
6
A portion of our sales are seasonal and our operating results are
difficult to predict and may fluctuate.
Because our operating results are difficult to predict, we
believe that quarter-to-quarter comparisons of our operating
results are not a good indication of our future performance. The
majority of our product sales are affected by the seasons, due to
the seasonality of mainly heartworm and flea and tick
medications. Seasonality trends are divided into percentage of
sales by quarter. For the quarters ended June 30, 2006,
September 30, 2006, December 31, 2006, and March 31, 2007,
Company sales were 31%, 27%, 19%, and 23%, respectively.
In addition to the seasonality of our sales, our annual and
quarterly operating results have fluctuated in the past and may
fluctuate significantly in the future due to a variety of
factors, many of which are out of our control. Factors that may
cause our operating results to fluctuate 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
website, 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 or obtain an
adequate supply of products;
- Our ability to adequately maintain, upgrade and develop
our website, the systems that we use to process customers'
orders and payments, or our computer network;
- Increased competition within our market niche;
- Price competition;
- Increases in the cost of advertising;
- The amount and timing of operating costs and capital
expenditures relating to expansion of our product line or
operations; and
- Disruption of our toll-free telephone service,
technical difficulties, systems and Internet outages, or
slowdowns.
Any change in one or more of these factors could materially
adversely affect our financial condition and results of
operations in future periods.
Our stock price fluctuates from time to time and may fall below
expectations of securities analysts and investors, and could
subject us to litigation, which may result in you suffering a
loss on your investment.
The market price of our common stock may fluctuate
significantly in response to a number of factors, some of which
are beyond our control. These factors include: quarterly
variations in operating results; changes in accounting treatments
or principles; announcements by us or our competitors of new
products and services offerings, significant contracts,
acquisitions or strategic relationships; additions or departures
of key personnel; any future sales of our common stock or other
securities; stock market price and volume fluctuations of
publicly-traded companies; and general political, economic, and
market conditions.
In some future quarter our operating results may fall below
the expectations of securities analysts and investors, which
could result in a decrease in the trading price of our common
stock. In the past, securities class action litigation has often
been brought against a company following periods of volatility in
the market price of its securities. We may be the targets of
similar litigation in the future. Securities litigation could
result in substantial costs and divert management's attention and
resources, which could seriously harm our business and operating
results.
We may issue additional shares of preferred stock that could
defer a change of control or dilute the interests of our common
stockholders. Our charter documents could defer a takeover
effort which could inhibit your ability to receive an acquisition
premium for your shares.
7
Our charter permits our Board of Directors to issue up to
5,000,000 shares of preferred stock without stockholder approval.
Currently there are 2,500 shares of our Convertible Preferred
Stock issued and outstanding. This leaves 4,997,500 shares of
preferred stock available for issuance at the discretion of our
Board of Directors. These shares, if issued, could contain
dividend, liquidation, conversion, voting, or other rights which
could adversely affect the rights of our common stockholders and
which could also be utilized, under some circumstances, as a
method of discouraging, delaying or preventing a change in
control. Provisions of our articles of incorporation, bylaws and
Florida law could make it more difficult for a third party to
acquire us, even if many of our stockholders believe it is in
their best interest.
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 the shares for sale. Further because it is possible that
a large number of shares of our common stock could be sold at the
same time hereunder, the sales, or the possibility thereof, may
have a depressive effect on the market price for our common stock
and could cause the market price of our common stock to decline.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the
common stock by the selling security holders pursuant to this
Resale Prospectus. All proceeds from the sale of the common stock
by the selling security holders will be for the account of such
selling security holders.
SELLING SECURITY HOLDERS
As of the date of this Resale Prospectus, 196,025 shares of
common stock have been issued under the Plan. The information
under this heading relates to resales of shares covered by this
prospectus by persons who are our "affiliates" as that term is
defined under federal securities laws. These persons will be
executive officers of our company. Shares issued pursuant to
this Resale Prospectus to our affiliates are "control" shares
under federal securities laws. Resales of "restricted
securities," as that term is defined in Rule 144(a)(3) of the
Securities Act may also be made by certain unnamed non-affiliates
of our company.
The following table sets forth:
- the name of each affiliated selling security holder,
- the amount of common stock owned beneficially, directly or
indirectly, by each affiliated selling security holder,
- the maximum amount of shares of common stock to be offered
by the affiliated selling security holders pursuant to this
Resale Prospectus, and
- the amount of common stock to be owned by each affiliated
selling security holder following sale of the shares of
common stock.
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 affiliated selling security holder is based upon our
books and records and the information provided by our transfer
agent.
We may amend or supplement this prospectus from time to time
to update the disclosure set forth in the table. Because the
selling security holders identified in the table may sell some or
all of the shares owned by them which are included in this Resale
Prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of
the shares, no estimate can be given as to the number of shares
available for resale hereby that will be held by the affiliated
selling security holders upon termination of the offering made
hereby. We have therefore assumed, for the purposes of the
following table, that the affiliated selling security holders
will sell all of the shares
8
owned by them, which are being offered hereby, but will not sell
any other shares of our common stock that they presently own.
Grants may be made to affiliates in the future which we are not
able to identify at this time. Before any of our affiliates sell
any of his or her shares received under the Plan, we will
supplement this Resale Prospectus with the required information
regarding the names of the persons selling, the total number of
shares owned by these persons and the number of shares proposed
to be sold under this prospectus.
---------------------------------------------------------------------------------------
Name of selling Number of Percentage Number of Number of Percentage
security holder Shares of of shares of Shares of Shares of of Common
Common Common Common Common Stock
Stock Stock Stock Stock Owned
Beneficially Owned Which Beneficially After the
Owned Prior Before May be Owned After Offering
to the Offering Offering Offered the Offering
---------------------------------------------------------------------------------------
Menderes Akdag 601,111(1)(2) 2.4% 90,000(2) 511,111(1) 2.1%
---------------------------------------------------------------------------------------
Bruce S. Rosenbloom 67,250(3)(4) * 13,750(4) 53,500(3) *
---------------------------------------------------------------------------------------
*less than 1% of the issued and outstanding shares.
(1) Mr. Akdag's holdings include vested options to purchase
27,777 shares of our Common Stock at $10.64 per share until March
2009, and 83,334 shares of our Common Stock at $10.64 per share
until March 2010.
(2) Includes 90,000 restricted shares under the 2006 Plan, which
are subject to forfeiture in one-third increments on February 27,
2008, 2009, and 2010, respectively, in the event of termination
of employment.
(3) Mr. Rosenbloom's holdings include vested options to purchase
6,000 shares of our Common Stock at $8.90 until June 2008, 6,667
shares of our Common Stock at $6.60 until May 2009, 5,000 shares
of our Common Stock at $3.45 until June 2009, 6,000 shares of our
Common Stock at $8.90 until June 2009, 6,667 shares of our Common
Stock at $6.60 until May 2010, and 6,000 shares of our Common
Stock at $8.90 until June 2010, but exclude options to purchase
an additional 6,666 of our Common Stock at $6.60, which have not
yet vested.
(4) Includes 6,250 restricted shares under the 2006 Plan, which
are subject to forfeiture in the amounts of 2083 and 2084 on July
31, 2008, and 2009, respectively, and includes 7,500 restricted
shares under the 2006 Plan, which are subject to forfeiture in
one-third increments on June 20, 2008, 2009, and 2010,
respectively, in the event of termination of employment.
PLAN OF DISTRIBUTION
The shares of Common Stock may be sold from time to time by
the selling security holders, or by pledgees, donees, transferees
or other successors in interest. Such sales may be made on the
NASDAQ Global Select Market, 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 of common stock may be
sold by one or more of the following, without limitation:
(a) a block trade 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;
(b) purchases by a broker or dealer as principal and resale
by such broker or dealer or for its account pursuant to the
Resale Prospectus, as supplemented;
9
(c) an exchange distribution in accordance with the rules of
such exchange; and
(d) ordinary brokerage transactions and transactions in which
the broker solicits purchasers.
The selling security holder and sales to and through other
broker-dealers or agents that participate with the selling
security holder in the sale of the shares of common stock may be
deemed to be "underwriters" within the meaning of the Securities
Act in connection with these sales. In that event, any
commissions received by the broker-dealers or agents and any
profit on the resale of the shares of common stock purchased by
them may be deemed to be underwriting commissions or discounts
under the Securities Act.
In addition, any securities covered by this Resale Prospectus
that qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Resale Prospectus, as
supplemented. From time to time, the selling security holder 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. Sales may also take place from time to time through
brokers pursuant to pre-arranged sales plans intended to qualify
under Commission Rule 10b5-1.
There is no assurance that the selling security holders will
sell all or any portion of the shares of the common stock covered
by this Resale Prospectus.
All expenses of registration of the common stock, other than
commissions and discounts of underwriters, dealers or agents,
shall be borne by us. As and when we are required to update this
Resale Prospectus, we may incur additional expenses.
LEGAL MATTERS
The validity of the common stock issuable under the PetMed
Express, Inc. 2006 Employee Equity Compensation Restricted Stock
Plan has been passed upon for us by Schneider Weinberger & Beilly
LLP.
EXPERTS
The financial statements and management's assessment of the
effectiveness of internal control over financial reporting (which
is included in Management's Report on Internal Control over
Financial Reporting) incorporated in this Prospectus by reference
to the Annual Report on Form 10-K for the year ended March 31,
2007 have been so incorporated in reliance on the report of
Goldstein Golub Kessler LLP, an independent registered public
accounting firm, given on the authority of said firm as experts
in auditing and accounting.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by us with the SEC are
incorporated herein by reference and made a part hereof:
- The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2007, filed on June 4, 2007,
- The Company's Proxy Statement for the Company's Annual
Meeting of Stockholders, filed with the Commission on June 29,
2007, and
10
- The updated description of common stock contained in our
Registration Statement on Form 10-SB12G, filed on January 10,
2000, including any amendment or report filed for the purpose of
updating such description.
In addition, all reports and documents filed by us pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the
respective date of filing of such documents. Any statement
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Resale Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such
statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part
of this prospectus. Nothing in this Resale Prospectus shall be
deemed to incorporate information furnished by us, but not filed
with the Commission, pursuant to Items 2.02, 7.01 or 9.01 of Form
8-K.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. 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.
11
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 7. Exemption From Registration Claimed
As of the date of this Registration Statement, we issued an
aggregate of 196,025 shares of our common stock under the 2006
Employee Equity Compensation Restricted Stock Plan to 36 of our
employees as a bonus. The shares were valued at $2,412,083. The
recipients were accredited and non-accredited investors who had
such knowledge and experience in financial, investment and
business matters that they were capable of evaluating the merits
and risks of the prospective investment in our securities. The
participants had access to business and financial information
concerning our company and each was provided a copy of the
Company's Annual Report on Form 10-K for the year ended March 31,
2007. The issuances were conditioned on further employment or
services to us, and each of the recipients had the ability to
assess his or her relationship with our company. The issuances
were exempt from registration pursuant to Rule 506 of Regulation
D of the Securities Act.
Item 8. Exhibits
5.1 Opinion of Schneider Weinberger & Beilly LLP *
23.1 Consent of Goldstein Golub Kessler LLP *
23.2 Consent of Schneider Weinberger & Beilly LLP (contained in
such firm's opinion filed as Exhibit 5.1) *
99.1 PetMed Express, Inc. 2006 Employee Equity Compensation
Restricted Stock Plan (filed as Exhibit A to our Definitive
Proxy Statement on Schedule 14A, filed June 22, 2006 and
incorporated herein by reference)
* filed herewith
Item 9. 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 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 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) will
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in reports
filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act of
1934 that are incorporated by reference in the Registration
Statement.
12
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for 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 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the 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.
13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-8 and authorizes this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
Pompano Beach, Florida on August 7, 2007.
PETMED EXPRESS, INC.
By: /s/ Menderes Akdag
-------------------------------------
Menderes Akdag
Chief Executive Officer and President
(principal executive officer)
By: /s/ Bruce Rosenbloom
-------------------------------------
Bruce Rosenbloom
Chief Financial Officer and Treasurer
(principal financial and accounting officer)
In accordance with the Exchange Act, this Registration
Statement on Form S-8 has been signed below by the following
persons on behalf of the registrant and in the capacities
and on August 7, 2007.
SIGNATURE TITLE
/s/ Menderes Akdag Chief Executive Officer and President
------------------------- (principal executive officer)
Menderes Akdag Officer and Director
/s/ Robert C. Schweitzer Chairman of the Board
-------------------------
Robert C. Schweitzer Director
/s/ Bruce S. Rosenbloom Chief Financial Officer and Treasurer
------------------------- (principal financial and accounting officer)
Bruce S. Rosenbloom Officer
/s/ Ronald J. Korn Director
-------------------------
Ronald J. Korn
/s/ Gian M. Fulgoni Director
-------------------------
Gian M. Fulgoni
/s/ Frank J. Formica Director
-------------------------
Frank J. Formica
14