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 OUTSIDE DIRECTOR EQUITY COMPENSATION
RESTRICTED STOCK PLAN
-----------------------------------------
(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 200,000 $14.89 $2,978,000 $91.42
$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 200,000 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 Outside Director 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 non-employee directors of up to 156,000 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 Director 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.
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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.
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REOFFER PROSPECTUS
PETMED EXPRESS, INC.
1441 S.W. 29th Avenue
Pompano Beach, Florida 33069
(954) 979-5995
200,000 Shares of Common Stock
This prospectus forms a part of a Registration Statement which
registers an aggregate of 200,000 shares of common stock issued or
issuable from time to time under the PetMed Express, Inc. 2006 Outside
Director 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.
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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
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.
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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.
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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, www.1888petmeds.com,
www.petmedexpress.com, and www.petmeds.com 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 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, 44,000 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 directors of our company.
Shares issued pursuant to this Resale Prospectus to our affiliates are
"control" shares under federal securities laws.
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 owned by them,
which are being offered hereby, but will not sell any other shares of
our common stock that they presently own.
8
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 Stock Common Stock Common Stock Common Stock Stock Owned
Beneficially Owned Before Which May Beneficially After the
Owned Prior to Offering be Offered Owned After Offering
the Offering the Offering
-----------------------------------------------------------------------------------------------------
Gian M. Fulgoni 74,334(1)(2) * 11,000(2) 63,334(1) *
Robert C. Schweitzer 66,334(3)(2) * 11,000(2) 55,334(3) *
Ronald J. Korn 62,334(4)(2) * 11,000(2) 51,334(4) *
Frank J. Formica 49,334(5)(2) * 11,000(2) 38,334(5) *
* less than 1% of the issued and outstanding shares.
(1) Mr. Fulgoni's holdings include vested options to purchase
6,667 shares of our Common Stock at $8.90 per share until June 2008,
6,667 shares of our Common Stock at $6.60 per share until May 2009,
6,667 shares of our Common Stock at $8.90 per share until June 2009,
6,667 shares of our Common Stock at $6.60 per share until May 2010,
and 6,666 shares of our Common Stock at $8.90 per share until June
2010, but exclude options to purchase an additional 6,666 shares of
our Common Stock at $6.60, which have not yet vested.
(2) Includes 5,000 restricted shares under the 2006 Outside
Director Equity Compensation Restricted Stock Plan, which are
subject to forfeiture in the amounts of 1,667 and 1,666 on July 31,
2008, and 2009, respectively, and 6,000 restricted shares under the
2006 Outside Director Equity Compensation Restricted Stock Plan,
which are subject to forfeiture in one-third increments on August 3,
2008, 2009, and 2010, respectively, in the event of cessation of
service as a director.
(3) Mr. Schweitzer's holdings include vested options to
purchase 6,667 shares of our Common Stock at $8.90 per share until
June 2008, 6,667 shares of our Common Stock at $6.60 per share until
May 2009, 6,667 shares of our Common Stock at $8.90 per share until
June 2009, 6,667 shares of our Common Stock at $6.60 per share until
May 2010, and 6,666 shares of our Common Stock at $8.90 per share
until June 2010, but exclude options to purchase an additional 6,666
shares of our Common Stock at $6.60, which have not yet vested.
(4) Mr. Korn's holdings include vested options to purchase
6,667 shares of our Common Stock at $8.90 per share until June 2008,
1,667 shares of our Common Stock at $6.60 per share until May 2009,
6,667 shares of our Common Stock at $8.90 per share until June 2009,
6,667 shares of our Common Stock at $6.60 per share until May 2010,
and 6,666 shares of our Common Stock at $8.90 per share until June
2010, but exclude options to purchase an additional 6,666 shares of
our Common Stock at $6.60, which have not yet vested.
(5) Mr. Formica's holdings include vested options to purchase
5,000 shares of our Common Stock at $7.90 per share until August
2008, 3,333 shares of our Common Stock at $8.90 per share until June
2008, 6,667 shares of our Common Stock at $6.60 per share until May
2009, 3,333 shares of our Common Stock at $8.90 per share until June
2009, and 10,000 shares of our common stock at $7.90 per share until
August 2009, 6,667 shares of our Common Stock at $6.60 per share
until May 2010, and 3,334 shares of our Common Stock at $8.90 per
share until June 2010, but exclude options to purchase 6,666 shares
of our Common Stock at $6.60, which have not yet vested.
9
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;
(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 Outside Director 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.
10
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
- 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
11
- 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.
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 44,000 shares of our common stock under the 2006 Outside
Director Equity Compensation Restricted Stock Plan to 4 of our non-
employee directors as a bonus. The shares were valued at $585,720.
The recipients were 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. 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 Outside Director Equity Compensation
Restricted Stock Plan (filed as Exhibit B 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
12
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.
(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 authorized 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