-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T9OyxnbJazB9Zf+lxcrihu3aWzA+kyNiXOA0/Ye9J19Rq7yS2jO64+nXiMI6NTBn NmgIh5vfvtShnrpI5pWvLQ== 0000910680-02-000556.txt : 20020607 0000910680-02-000556.hdr.sgml : 20020607 20020605113337 ACCESSION NUMBER: 0000910680-02-000556 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20020605 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMARTSERV ONLINE INC CENTRAL INDEX KEY: 0001005698 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 133750708 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 333-34940 FILM NUMBER: 02670536 BUSINESS ADDRESS: STREET 1: METRO CENTER STREET 2: ONE STATION PLACE CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2033535950 MAIL ADDRESS: STREET 1: ONE STATION PLACE CITY: STAMFORD STATE: CT ZIP: 06902 POS AM 1 d797496_7.txt FILED 05/31/2002 As filed with the Securities and Exchange Commission on June 5, 2002 Registration No. 333-34940 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- AMENDMENT NO. 1 ON FORM S-3 TO POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- SMARTSERV ONLINE, INC. ------------------------------------------ (Exact Name of Registrant as Specified in its Charter) DELAWARE 13-3750708 - ------------------------------ ---------------------- (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) ONE STATION PLACE STAMFORD, CT 06902 (203) 353-5950 ----------------------------------------------------------------- (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) RICHARD D. KERSCHNER, ESQ. SENIOR VICE PRESIDENT AND GENERAL COUNSEL SMARTSERV ONLINE, INC. ONE STATION PLACE STAMFORD, CT 06902 (203) 353-5950 ----------------------------------------------------------------- (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) Copy to: MICHAEL J. SHEF, ESQ. JENKENS & GILCHRIST PARKER CHAPIN LLP THE CHRYSLER BUILDING 405 LEXINGTON AVENUE NEW YORK, NEW YORK 10174 TELEPHONE NO.: (212) 704-6000 FACSIMILE NO.: (212) 704-6288 ---------------------- Approximate date of commencement of proposed sale to public: As soon as practicable after this Post-Effective-Amendment becomes effective. If the only securities on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| ____________________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| _______________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| Pursuant to Rule 429 of the Securities Act of 1933, as amended, this registration statement also serves as Post-Effective Amendment No. 1 to the registrant's Registration Statements on Form SB-2, File Nos. 333-92599 and File No. 333-43258, relating to 1,160,307 and 623,877 shares of SmartServ's common stock, respectively. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS POST-EFFECTIVE AMENDMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS POST-EFFECTIVE AMENDMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE. SUBJECT TO COMPLETION, DATED JUNE 5, 2002 The information in this prospectus is not complete and may be changed. We have filed a post-effective amendment to the registration statement relating to these securities with the Securities and Exchange Commission. The selling stockholders may not sell these securities nor may they accept offers to buy these securities prior to the time the post-effective amendment to the registration statement becomes effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state in which the offer or sale is not permitted. PROSPECTUS SMARTSERV ONLINE, INC. 2,160,308 SHARES OF COMMON STOCK o The selling stockholders are offering to sell 2,160,308 shares of common stock of which 1,301,975 shares are issuable upon exercise of warrants. o We will not receive any proceeds from the offering of common stock. o Our common stock is traded and quoted on the Nasdaq National Market (NMS) under the symbol "SSOL". On June 4, 2002, the last reported bid price of our common stock was $1.30 and the last reported asked price was $1.35. The address and telephone number of SmartServ's principal executive offices are: One Station Place Stamford, CT 06902 (203) 353-5950 THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------------ The date of this Prospectus is ____________, 2002 TABLE OF CONTENTS Page ---- Risk Factors...................................................................3 Special Information About Forward Looking Statements...........................7 The Company....................................................................7 Use of Proceeds................................................................7 Selling Stockholders...........................................................8 Plan of Distribution..........................................................10 Indemnification for Securities Act Liabilities................................11 Where You Can Find More Information About Us..................................13 Legal Matters.................................................................14 Experts.......................................................................14 -2- YOU SHOULD READ THE ENTIRE PROSPECTUS AND ANY DOCUMENTS INCORPORATED BY REFERENCE CAREFULLY BEFORE PURCHASING SMARTSERV COMMON STOCK. IN THIS PROSPECTUS, "SMARTSERV," "WE," "US" AND "OUR" REFER TO THE BUSINESS THAT IS OWNED AND CONDUCTED BY SMARTSERV ONLINE, INC. AND ITS SUBSIDIARIES AND NOT TO THE SELLING STOCKHOLDERS. RISK FACTORS BEFORE YOU BUY SHARES OF OUR COMMON STOCK, YOU SHOULD BE AWARE THAT THERE ARE VARIOUS RISKS ASSOCIATED WITH THE PURCHASE OF OUR COMMON STOCK. YOU SHOULD CONSIDER CAREFULLY THESE RISK FACTORS, TOGETHER WITH ALL OF THE OTHER INFORMATION IN THIS PROSPECTUS AND ALL DOCUMENTS INCORPORATED BY REFERENCE, BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR COMMON STOCK. THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. YOU SHOULD ALSO REFER TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, INCLUDING THE DOCUMENTS WE INCORPORATE BY REFERENCE UNDER "WHERE YOU CAN FIND MORE INFORMATION ABOUT US". WE HAVE A HISTORY OF LOSSES AND IF WE DO NOT ACHIEVE PROFITABILITY WE MAY NOT BE ABLE TO CONTINUE OUR BUSINESS Although we had net income of $2,937,591 for the six month transition period ended December 31, 2000, we incurred net losses of $4,109,347 for the three months ended March 31, 2002, $14,819,860 for the year ended December 31, 2001, $30,993,559 for the year ended June 30, 2000, $7,124,126 for the year ended June 30, 1999, $5,040,009 for the year ended June 30, 1998, $4,434,482 for the year ended June 30, 1997 and $2,966,287 for the year ended June 30, 1996. Included in the June 30, 2000 amount was a non-cash charge for stock-based compensation of $30,271,024. On March 31, 2002, we had an accumulated deficit of $68,931,181. Losses have resulted principally from costs incurred in connection with activities aimed at developing our software, information and transactional services and from costs associated with our marketing and administrative activities. We have incurred substantial expenses and commitments and continue to have negative cash flows from operations. These losses raise substantial doubt as to our ability to continue as a going concern. We recently engaged investment bankers to assist us with the sale of equity to private investors. We can give no assurance that we will be able to raise additional capital on satisfactory terms. Additionally, we can give no assurance that we will be able to develop revenues sufficient to support our operations. WE MAY BE DELISTED FROM THE NASDAQ NATIONAL MARKET, WHICH COULD ADVERSELY AFFECT THE LIQUIDITY AND VOLATILITY OF OUR COMMON STOCK We have received notification from Nasdaq that we no longer meet the listing requirements for Nasdaq National Market. While we are trying to maintain our listing, we cannot guarantee that we will be successful in doing so. Delisting from the Nasdaq National Market would require us to move our common stock to either the Nasdaq SmallCap Market or the OTC Bulletin Board. The move to either of those markets could decrease the liquidity and volume of our common stock and reduce the number of market makers willing to trade in our stock, making it more likely that wide fluctuations in the quoted price of our common stock would occur. As a result, there is a risk that stockholders will not be able to obtain accurate price quotes or be able to correctly assess the market price of our stock. Increases in the -3- volatility could also make it more difficult to pledge the common stock as collateral, if stockholders sought to do so, because a lender might also be unable to accurately value the common stock. WE DEPEND ON A SMALL NUMBER OF CUSTOMERS, AND THE LOSS OF ANY ONE CUSTOMER COULD ADVERSELY AFFECT OUR OPERATING RESULTS Currently, substantially all of our revenues are generated through our licensing arrangements with a small number of customers. Our results from operations will depend upon numerous factors including the introduction and market acceptance of new services, establishing alliances with strategic marketing partners, competition and the regulatory environment. We anticipate that our results from operations for the immediate future will continue to depend to a significant extent upon revenues from a small number of customers. In order to increase our revenues, we will need to attract and retain additional customers. Our failure to obtain a sufficient number of additional customers would adversely affect our results of operations. OUR BUSINESS DEPENDS UPON STRATEGIC MARKETING PARTNERSHIPS WHICH MAY NOT MATERIALIZE We intend to sell our products and services primarily by entering into non-exclusive agreements with strategic marketing partners who would brand our information and transaction services with their own private label, promote the product offering and then provide our information and e-commerce services to their clients. Our success will depend on: o our ability to enter into agreements with strategic marketing partners; o the ultimate success of these strategic marketing partners; and o the ability of the strategic marketing partners to successfully market our services. Our failure to successfully effectuate our strategic alliance strategy or the failure of the strategic marketing partners to develop and sustain a market for our services would have a material adverse affect on our overall performance. Although we view strategic marketing alliances as a major factor in the successful commercialization of our services, there can be no assurance that the strategic marketing partners would view an alliance with us as significant to their businesses and any potential benefits from these arrangements may not materialize. THE MARKET FOR OUR BUSINESS IS IN A DEVELOPMENT STAGE AND MAY NOT ACHIEVE THE GROWTH WE EXPECT Online information and transactional services, as well as the convergence of wireless and Internet technologies, are developing markets. Our future growth and profitability will depend, in part, upon consumer acceptance of online information and transactional services in general and a significant expansion in the consumer market for the delivery of such services via wireless telephones, personal digital assistants and personal computers. Even if these markets experience substantial growth, there can be no assurance that our products and services will be commercially successful or will benefit from such growth. Further, even if initially successful, any continued development and expansion of the market for our products and services will depend in part upon our ability to create and develop additional products and adjust existing products in accordance with changing consumer preferences, all at competitive prices. Our failure to develop new products and generate revenues could have a material adverse effect on our financial condition and operating results. -4- WE COMPETE AGAINST LARGER, WELL KNOWN COMPANIES WITH GREATER RESOURCES The market for Web and wireless based information and transactional services is highly competitive and involves rapid innovation and technological change, shifting consumer preferences and frequent new product and service introductions. Most of our competitors and potential competitors have substantially greater financial, marketing and technical resources than we have. Increased competition in the market for our products and services could limit our ability to expand and materially and adversely affect our results from operations. The principal competitive factors in both the Internet-based and wireless services industry include content, product features and quality, ease of use, access to distribution channels, brand recognition, reliability and price. We believe that potential new competitors, including large multimedia and information system companies, are increasing their focus on transaction processing. We face competition from numerous services delivered through the Internet to personal computers. Although in its infancy, the wireless arena also has its competitors, such as Semotus Solutions, Inc., I3 Mobile, Inc., Aether Systems, Inc., 724 Solutions, Inc. and Everypath. We expect competition to increase from existing competitors and from new competitors, including telecommunications companies. The information content provided through our software and communication architecture is generally purchased through non-exclusive distribution agreements. While we are not dependent on any single content provider, existing and potential competitors may enter into agreements with these and other such providers and thereby acquire the ability to deliver online information and transactional services substantially similar to those provided by us. WE ARE HIGHLY DEPENDENT ON OUR EXECUTIVE OFFICERS AND SEVERAL TECHNICAL EMPLOYEES, THE LOSS OF ANY OF WHOM COULD HAVE AN ADVERSE IMPACT ON OUR FUTURE OPERATIONS We believe that, due to the rapid pace of innovation within our industry, factors such as the technological and creative skills of our personnel are more important in establishing and maintaining a leadership position within the industry than legal protections of our technology. We are dependent on our ability to recruit, retain and motivate high quality personnel. However, competition for such personnel is intense and the inability to attract and retain additional qualified employees or the loss of current key employees could materially and adversely affect our business, operating results and financial condition. We maintain and are the sole beneficiary of a key-person life insurance policy on the life of (1) Mr. Sebastian E. Cassetta, our Chief Executive Officer, in the amount of $1,000,000 and (2) Mr. Mario F. Rossi, our Executive Vice President of Technology, in the amount of $500,000. The loss of the services of either Mr. Cassetta or Mr. Rossi would have a material adverse effect upon our business, financial condition and results of operations. PROVISIONS IN OUR CHARTER MAY MAKE IT MORE DIFFICULT FOR A PERSON TO ACQUIRE US AT A PREMIUM TO OUR CURRENT MARKET VALUE Our charter restricts the ability of our stockholders to call a stockholders' meeting and provides that our stockholders may not act by written consent. Additionally, our Board of Directors is divided into three classes with each class being elected by our stockholders in different years. Our charter restricts the ability of our stockholders to change the number of directors and classes of our board of directors. These provisions may have the effect of deterring or delaying certain transactions involving an actual or potential change in control of SmartServ, including transactions in which our stockholders might -5- otherwise receive a premium for their shares over then current market prices, and may limit the ability of our stockholders to approve transactions that they may deem to be in their best interests. YOUR OWNERSHIP INTEREST, VOTING POWER AND THE MARKET PRICE OF OUR COMMON STOCK MAY DECREASE BECAUSE WE HAVE ISSUED, AND MAY CONTINUE TO ISSUE, A SUBSTANTIAL NUMBER OF SECURITIES CONVERTIBLE OR EXERCISABLE INTO OUR COMMON STOCK We have issued common stock, options and warrants to purchase our common stock, and in the future we may issue additional shares of common stock, options, warrants, preferred stock or other securities exercisable for or convertible into our common stock. At May 15, 2002, there were $392,000 of our prepaid warrants outstanding that were then convertible into 280,000 shares of our common stock. Additionally, we have issued warrants to investors and consultants and granted options to employees for the purchase of 3,732,100 shares of our common stock. Except for 1,735,284 shares subject to stock options, substantially all of such shares have been registered for resale under the Securities Act. Additional shares are available for sale under Rule 144 of the Securities Act. Sales of these shares or the market's perception that these sales could occur may cause the market price of our common stock to fall and may make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate or to use equity securities as consideration for future acquisitions. We recently engaged investment bankers to assist us with the sale of equity to private investors. If sales of equity are effected, as to which there can be no assurance, your ownership interest and voting power in SmartServ will be further diluted. WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS We have designed and developed our own "device agnostic" information and transaction platform, made up of our patent-pending "W2W MiddlewareTM" and our content and processing engines. This platform is comprised of the "W2W MiddlewareTM", based on Windows NT operating system and the authorization, quote, news and transaction engines, based on Hewlett-Packard Company's Unix operating system and Oracle's Corp.'s version 8i parallel server database. Although we intend to protect our rights vigorously, there can be no assurance that any of the measures to protect our proprietary rights will be successful. In an effort to protect our proprietary rights, we rely upon a combination of contract provisions, patents, trademarks, and copyright and trade secret laws. We license the use of our products and services to our customers and partners under agreements that contain terms and conditions prohibiting the unauthorized reproduction of our products and services. We seek to protect the source code of our application software and communications architecture as a trade secret and as an unpublished copyrighted work. We believe that our registered marks "SmartServ Online" and "SmartServ" have significant value and are important to the marketing of our services. There can be no absolute assurance, however, that our marks do not or will not violate the proprietary rights of others, that our marks would be upheld if challenged or that we would not be prevented from using our marks, any of which could have an adverse effect on us. In addition, there can be no assurance that we will have the financial resources necessary to enforce or defend our marks. We believe that our software, products, services, service marks and other proprietary rights do not infringe on the proprietary rights of third parties. However, there can be no assurance that third parties will not assert infringement claims against us with respect to current features, content or services or that any such assertion may not require us to enter into royalty arrangements or result in litigation. -6- WE ARE INVOLVED IN SEVERAL PENDING LEGAL PROCEEDINGS WHICH, IF RESOLVED AGAINST US, COULD CAUSE DILUTION TO OUR STOCKHOLDERS AND HAVE A MATERIAL NEGATIVE IMPACT ON OUR OPERATIONS From time to time we have been, and expect to continue to be, a party to legal proceedings and claims in the ordinary course of our business. Our ongoing legal proceedings with Michael Fishman and Commonwealth Associates, L.P. are described in the "Legal Proceedings" section of our 10-KSB for the year ended December 31, 2001, which is incorporated by reference into this document (See the section entitled "Where You Can Find More Information About Us" on page 13). While we expect to contest these matters vigorously, litigation is inherently uncertain and an adverse judgment on any of these claims could cause dilution to our stockholders, as well as harm to our business. Even if not meritorious, any of these current and future matters could require the expenditure of significant financial and managerial resources. SPECIAL INFORMATION ABOUT FORWARD-LOOKING STATEMENTS Some of the statements in this prospectus or in the documents we incorporate by reference are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among others, the factors set forth above under "Risk Factors." The words "believe," "expect," "anticipate," "intend" and "plan" and similar expressions identify forward-looking statements. We caution you not to place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements or publicly announce the result of any revisions to any of the forward-looking statements in this document to reflect future events or developments. THE COMPANY SmartServ provides Web and wireless applications and infrastructure that allow financial institutions, network service providers and other businesses to deliver content and transaction-intensive services to their work forces and customers - in real time and via virtually any wired or wireless device. SmartServ's products include a transaction processing engine, capable of routing high-volume transactions to multiple destinations; proprietary W2W MiddlewareTM that ensures content and applications are optimized for the full array of present and future devices; and a suite of applications designed so businesses and their customers can exploit the merits of wireless data exchange and transactional capability. USE OF PROCEEDS Each selling stockholder is selling all of the shares covered by this prospectus for his, her or its own account. Accordingly, we will not receive any proceeds from the resale of the shares. We will, however, receive $8,760,000 if all of the warrants for the underlying shares of common stock being registered are exercised. We expect to use these proceeds, if any, for general corporate purposes. -7- SELLING STOCKHOLDERS The following table sets forth the names of the selling stockholders, the number of shares of common stock beneficially owned by the selling stockholders as of May 30, 2002, the number of shares of common stock being offered by the selling stockholders, the number of shares of common stock each selling stockholder will beneficially own if the stockholder sells all of the shares being registered and the selling stockholder's percentage ownership of SmartServ common stock if all the shares in the offering are sold. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately under this prospectus. All information with respect to share ownership has been furnished by the selling stockholders. Because the selling stockholders may sell all or part of their shares, no estimates can be given as to the number of shares of common stock that will be held by the selling stockholders upon termination of any offering made hereby. The shares being offered for resale by the selling stockholders consist of shares of common stock issued in private placements in January and May 2000, shares of common stock held by certain financial consultants and shares of common stock underlying warrants to purchase common stock. Other than Claudio Guazzoni being a former director of SmartServ, consulting arrangements with Bruno Guazzoni, Ehrenkrantz King Nussbaum, Inc., Michael Kramer, Lindquist Global Advisors, LLC, Steven Rosner and Brauning Associates (of which Michael P. Silva and Todd M. Peterson are principals and transferees), an investment advisory relationship with America First Associates Corp. (of which Joseph A. Genzardi and Joseph R. Ricupero are principals) and The Zanett Securities Corporation (of which Claudio Guazzoni, Samuel Millbank and David M. McCarthy are principals), a contractual license arrangement with Data Transmission Network Inc. (one of whose former officers, Charles R. Wood, is one of our directors) and that Charles R. Klotz is a director of SmartServ and designee of TecCapital, Ltd. and Mario F. Rossi is Executive Vice President, Chief Technology Officer and a director of SmartServ, none of the selling stockholders have and, within the past three years have not had, any position, office or other material relationship with us or any of our predecessors or affiliates.
Shares of Common Beneficial Percent of Class Stock Shares of Ownership After Owned After Beneficially Common Stock Offering If All Offering if All Selling Stockholders Owned to be Sold Shares Are Sold Shares Are Sold - ----------------------------------- ---------------- ------------ --------------- ---------------- Data Transmission Network Corp. (1) 225,000 225,000 0 * Steven B. Rosner 473,533 208,000 265,533 4.2% Joseph A. Genzardi 5,000 5,000 0 * Joseph R. Ricupero 5,000 5,000 0 * America First Associates Corp. (2) 3,140 3,140 0 * Bruno Guazzoni (3) 315,261 947,926 0 * Claudio Guazzoni 69,534 69,534 0 * Samuel Millbank 2,848 2,848 0 * David M. McCarthy 5,696 5,696 0 * -8- Shares of Common Beneficial Percent of Class Stock Shares of Ownership After Owned After Beneficially Common Stock Offering If All Offering if All Selling Stockholders Owned to be Sold Shares Are Sold Shares Are Sold - ----------------------------------- ---------------- ------------ --------------- ---------------- Zanett Lombardier, Ltd. 72,831 72,831 0 * TecCapital, Ltd.(4) 303,030 303,030 0 * Hare & Co.(5) 30,303 30,303 0 * Ira Abbott 2,000 2,000 0 * CLFS Equities(6) 2,000 2,000 0 * Henry Snow 52,000 52,000 0 * John and Anna Albanese 8,000 8,000 0 * Marvin and Susan Numeroff 8,000 8,000 0 * Goldie Grief 6,000 6,000 0 * H.P. Hiranandani 4,000 4,000 0 * Gail Markiewicz 4,000 4,000 0 * Edward G. Brown 2,000 2,000 0 * Andrew and Susan Carter 2,000 2,000 0 * John and Donna Franco 2,000 2,000 0 * Arthur George Frost 2,000 2,000 0 * S.W. Ghali, MD 2,000 2,000 0 * Ernest Gottdiener 2,000 2,000 0 * Michael Miller 2,000 2,000 0 * Frank and Diane Mills 2,000 2,000 0 * Anthony Pirrera 2,000 2,000 0 * Plushbottom & Peabody, Ltd.(7) 2,000 2,000 0 * Mark I. Silverman 2,000 2,000 0 * Maceo K. Sloan 2,000 2,000 0 * H. Diehl Suss 2,000 2,000 0 * Ervin Tansky 2,000 2,000 0 * -9- Shares of Common Beneficial Percent of Class Stock Shares of Ownership After Owned After Beneficially Common Stock Offering If All Offering if All Selling Stockholders Owned to be Sold Shares Are Sold Shares Are Sold - ----------------------------------- ---------------- ------------ --------------- ---------------- Stephen and Anndra Martinelli 1,000 1,000 0 * Evelyn, Lori and Lisa Martinelli 1,000 1,000 0 * Michael Kramer 16,000 16,000 0 * Lindquist Global Advisors, LLC(8) 50,000 50,000 0 * Michael P. Silva 40,000 40,000 0 * Todd M. Peterson 10,000 10,000 0 * Mario F. Rossi 343,830 50,000 293,830 4.6% Total 2,087,006 2,160,308 559,363 8.7%
- ---------- * Less than 1%. 1. We have been advised by Data Transmission Network, Corp. that Brian L. Larson, Senior Vice President and Chief Financial Officer, is the person who directs the investments of Data Transmission Network, Corp. 2. We have been advised by America First Associates Corp. that its controlling stockholders are Joseph A. Genzardi and Joseph Ricupero. 3. Although he owns warrants to purchase 947,926 shares of common stock, Mr. Guazzoni agreed not to exercise his warrants to the extent that he would beneficially own more than 4.99% of our common stock. Mr. Guazzoni may waive this restriction on 61 days notice. 4. David R. Barclay and Frederick H. Barclay have sole voting and investment power with respect to the shares of SmartServ being resold for the account of TecCapital, Ltd. 5. Conseco Capital Management has sole voting and investment power with respect to the shares of SmartServ being resold for the account of Hare & Co. 6. Cynthia Farber, Debra Lustig and Shelly Sapkin have shared voting and investment power with respect to the shares of SmartServ being resold for the account of CLFS Equities. 7. Samuel Weiss has sole voting and investment power with respect to the shares of SmartServ being resold for the account of Plushbottom and Peabody, Ltd. 8. Anders Lindquist has sole voting and investment power with respect to the shares of SmartServ being resold for the account of Lindquist Global Advisors, LLC. PLAN OF DISTRIBUTION The shares may be sold or distributed from time to time by the selling stockholders or by pledgees, donees or transferees of, or successors in interest to, the selling stockholders, directly to one or more purchasers (including pledgees) or through brokers, dealers or underwriters who may act solely as agents or may acquire shares as principals, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods: o ordinary brokers transactions, which may include long or short sales, o transactions involving cross or block trades or otherwise on the OTC Bulletin Board, o purchases by brokers, dealers or underwriters as principal and resale by such purchasers for their own accounts pursuant to this prospectus, -10- o "at the market" to or through market makers or into an existing market for the common stock, o in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents, o through transactions in options, swaps or other derivatives (whether exchange listed or otherwise), or o any combination of the foregoing, or by any other legally available means. In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales of shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus. Brokers, dealers, underwriters or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). The selling stockholders and any broker-dealers acting in connection with the sale of the shares hereunder may be deemed to be underwriters within the meaning of Section 2(11) of the Securities Act of 1933, and any commissions received by them and any profit realized by them on the resale of shares as principals may be deemed underwriting compensation under the Securities Act of 1933. Neither SmartServ nor the selling stockholders can presently estimate the amount of such compensation. SmartServ knows of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares. SmartServ will not receive any proceeds from the sale of the shares pursuant to this prospectus. SmartServ has agreed to bear the expenses of the registration of the shares, including legal and accounting fees, and such expenses are estimated to be approximately $30,000. SmartServ has informed the selling stockholders that while they are engaged in a distribution of the shares included in this prospectus they are required to comply with certain anti-manipulative rules contained in Regulation M under the Securities Exchange Act of 1934. With certain exceptions, Regulation M precludes the selling stockholders, any affiliated purchasers, and any broker-dealer or other person who participates in such distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the shares offered by this prospectus. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 102(b)(7) of the Delaware General Corporate Law ("DGCL") enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director to a corporation or its stockholders for violations of the director's fiduciary duty, except: o for any breach of a director's duty of loyalty to the corporation or its stockholders, o for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, -11- o pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions), or o for any transaction from which a director derived an improper personal benefit. The Amended and Restated Certificate of Incorporation of SmartServ provides for the elimination of the liability of directors to the extent permitted by the DGCL. Section 145 of the DGCL provides, in summary, that directors and officers of Delaware corporations are entitled, under certain circumstances, to be indemnified against all expenses and liabilities (including attorney's fees) incurred by them as a result of suits brought against them in their capacity as a director or officer, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful; provided that no indemnification may be made against expenses in respect of any claim, issue or matter as to which they shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, they are fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Any such indemnification may be made by the corporation only as authorized in each specific case upon a determination by the stockholders or disinterested directors that indemnification is proper because the indemnitee has met the applicable standard of conduct. SmartServ's By-Laws entitle officers and directors of SmartServ to indemnification to the fullest extent permitted by the DGCL. SmartServ has agreed to indemnify each of its directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. In addition, SmartServ maintains an insurance policy with respect to potential liabilities of its directors and officers, including potential liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of SmartServ pursuant to the provisions described above, or otherwise, SmartServ has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by SmartServ of expenses incurred or paid by a director, officer or controlling person of SmartServ 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, SmartServ 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. -12- WHERE YOU CAN FIND MORE INFORMATION ABOUT US We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public from the SEC's Website at "http://www.sec.gov." We have filed with the SEC amendment no. 1 on Form S-3 to our post-effective amendment no. 1 to the registration statement on Form SB-2 to register shares of our common stock. This prospectus is part of that registration statement and, as permitted by the SEC's rules, does not contain all the information included in the registration statement. For further information with respect to us or our common stock, you may refer to the registration statement and to the exhibits filed as part of that registration statement. You can review and copy the registration statement and its exhibits at the public reference facilities maintained by the SEC as described above. The registration statement, including its exhibits, is also available on the SEC's web site. This prospectus may contain summaries of contracts or other documents. Because they are summaries, they will not contain all of the information that may be important to you. If you would like complete information about a contract or other document, you should read the copy filed as an exhibit to the registration statement. The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update or supersede this information. We incorporate by reference the documents listed below and any future filing we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended: o Quarterly Report on Form 10-QSB for the quarter ended March 31, 2002 filed with the SEC on May 17, 2002 o Amended Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 2001 filed with the SEC on April 30, 2002 o Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001 filed with the SEC on April 16, 2002 o The description of SmartServ's common stock contained in Post-Effective Amendment No. 1 to the Registration Statement on Form SB-2 (333-34940) filed with the SEC on January 31, 2002 You may request a copy of these filings, at no cost, by writing to us at our executive offices at One Station Place, Stamford, CT 06902, Attention: Thomas W. Haller, or by calling us at (203) 353-5950. -13- LEGAL MATTERS The validity of the shares of common stock offered in this prospectus has been passed upon for us by Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405 Lexington Avenue, New York, New York 10174. Its telephone number is (212) 704-6000. EXPERTS The consolidated financial statements of SmartServ Online, Inc. appearing in SmartServ Online, Inc.'s Annual Report (Form 10-KSB) for the year ended December 31, 2001 have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon (which contain an explanatory paragraph describing conditions that raise substantial doubt about the Company's ability to continue as a going concern as described in Note 1 to the consolidated financial statements) included therein and incorporated herein by reference. Such consolidated financial statements are incorporated by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. -14- ================================ ================================= - -------------------------------- --------------------------------- SMARTSERV ONLINE, INC. 2,160,308 SHARES OF COMMON STOCK WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL OR BUY ANY SHARES IN ANY JURISDICTION WHERE IT IS UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF MAY ___, 2002. _________________ _________________ PROSPECTUS _________________ _________________ UNTIL _____, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. ================================ ================================= - -------------------------------- --------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the various expenses which we will pay in connection with the issuance and distribution of the securities being registered on this registration statement. The selling stockholders will not incur any of the expenses set forth below. All amounts shown are estimates. Filing fee for registration statement .......... $ 0 ---------- Legal fees and expenses ....................... $ 15,000 ---------- Accounting expenses............................. $ 15,000 ---------- Miscellaneous................................... $ 0 ---------- Total........................................... $ 30,000 ----------- ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Incorporated by reference to Amendment No. 1 to the Company's Registration Statement on Form SB-2 filed May 19, 2000 (Registration Number 333-34940), under "Item 24. Indemnification of Directors, Officers, Employees and Agents" on page II-1. ITEM 16. EXHIBITS. EXHIBIT DESCRIPTION - ------- ----------- 4.1 Specimen Certificate of SmartServ's Common Stock* 4.2 Placement Agent Agreement dated as of January 11, 2000 between SmartServ and America First Associates Corp.** 4.3 Securities Purchase Agreement dated as of November 19, 1998 among SmartServ and the investors listed therein.*** 4.4 Warrant Agreement dated October 21, 1998 among SmartServ and the investors listed therein.*** 4.5 Consulting Agreement dated October 25, 1999 between SmartServ and Steven Rosner*** 4.6 Form of warrant issued to Steven Rosner*** 4.7 Consulting Agreement with Bruno Guazzoni**** 4.8 Warrant issued to Bruno Guazzoni dated September 29,1997**** 4.9 Registration Rights Agreement dated September 29, 1997*** 4.10 Warrant Agreement between SmartServ and Data Transmission Network Incorporated** 4.11 Form of Warrant Agent Agreement* 4.12 Form of Redeemable Warrant* 4.13 Form of Warrant Agreement used by SmartServ for the warrants issued to Steven Rosner, Andrew Seybold Group, LLC, Michael Kramer, Lindquist Global Advisors, LLC and Brauning Associates***** 4.14 Stock Purchase Agreement dated May 12, 2000 between SmartServ and TecCapital, Ltd. and Conseco Equity Fund***** 5.1 Opinion of Parker Chapin LLP** 5.2 Opinion of Parker Chapin LLP*** 5.3 Opinion of Jenkens & Gilchrist Parker Chapin LLP***** 23 Consent of Ernst & Young LLP 24 Power of Attorney** II-1 - ---------- * Filed as an exhibit to the Company's registration statement on Form SB-2 (Registration Number 333-114) ** Filed as an exhibit to SmartServ's registration statement on Form SB-2 (Registration Number 333-34940) *** Filed as an exhibit to SmartServ's registration statement on Form SB-2 (Registration Number 333-92599) **** Filed as an exhibit to the Company's Current Report on Form 8-K/A for an event dated September 30, 1997 ***** Filed as an exhibit to SmartServ's registration statement on Form SB-2 (Registration Number 333-43258) ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement, or the most recent post-effective amendment thereof, which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, if the total dollar value of securities offered would not exceed that which was registered, any increase or decrease in the volume of securities offered and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the securities act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. Insofar as indemnification for liabilities arising under the securities act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the SEC, 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 liabilities is asserted by a director, officer or controlling person in connection with the securities being registered, other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding, the small business issuer 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 the issue. II-2 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-3 and has duly caused this Amendment No. 1 on Form S-3 to Post-Effective Amendment No. 1 to the Registration Statement on Form SB-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Stamford, State of Connecticut on June 5, 2002. SmartServ Online, Inc. By: /S/ THOMAS W. HALLER ---------------------------------- Thomas W. Haller Senior Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 on Form S-3 to Post-Effective Amendment No. 1 to the Registration Statement on Form SB-2 has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /S/ SEBASTIAN E. CASSETTA* Chairman of the Board, June 5, 2002 - --------------------------------- Chief Executive Officer, Sebastian E. Cassetta and Director /S/ THOMAS W. HALLER Senior Vice President and June 5, 2002 - --------------------------------- Chief Financial Officer Thomas W. Haller (Chief Financial and Accounting Officer) /S/ MARIO F. ROSSI* Executive Vice President, June 5, 2002 - --------------------------------- Chief Technology Officer Mario F. Rossi and Director Director June 5, 2002 - --------------------------------- Charles R. Klotz Director June 5, 2002 - --------------------------------- Stephen Lawler /S/ L. SCOTT PERRY* Director June 5, 2002 - --------------------------------- L. Scott Perry /S/ ROBERT H. STEELE* Director June 5, 2002 - --------------------------------- Robert H. Steele II-3 /S/ CATHERINE CASSEL TALMADGE* Director June 5, 2002 - -------------------------------- Catherine Cassel Talmadge /S/ CHARLES R. WOOD* Director June 5, 2002 - --------------------------------- Charles R. Wood *By: /S/ THOMAS W. HALLER ---------------------------- Thomas W. Haller as Attorney in Fact II-4 EXHIBIT DESCRIPTION - ------- ----------- 4.1 Specimen Certificate of SmartServ's Common Stock* 4.2 Placement Agent Agreement dated as of January 11, 2000 between SmartServ and America First Associates Corp.** 4.3 Securities Purchase Agreement dated as of November 19, 1998 among SmartServ and the investors listed therein.*** 4.4 Warrant Agreement dated October 21, 1998 among SmartServ and the investors listed therein.*** 4.5 Consulting Agreement dated October 25, 1999 between SmartServ and Steven Rosner*** 4.6 Form of warrant issued to Steven Rosner*** 4.7 Consulting Agreement with Bruno Guazzoni**** 4.8 Warrant issued to Bruno Guazzoni dated September 29,1997**** 4.9 Registration Rights Agreement dated September 29, 1997*** 4.10 Warrant Agreement between SmartServ and Data Transmission Network Incorporated** 4.11 Form of Warrant Agent Agreement* 4.12 Form of Redeemable Warrant* 4.13 Form of Warrant Agreement used by SmartServ for the warrants issued to Steven Rosner, Andrew Seybold Group, LLC, Michael Kramer, Lindquist Global Advisors, LLC and Brauning Associates***** 4.14 Stock Purchase Agreement dated May 12, 2000 between SmartServ and TecCapital, Ltd. and Conseco Equity Fund***** 5.1 Opinion of Parker Chapin LLP** 5.2 Opinion of Parker Chapin LLP*** 5.3 Opinion of Jenkens & Gilchrist Parker Chapin LLP***** 23 Consent of Ernst & Young LLP 24 Power of Attorney** - ---------- * Filed as an exhibit to the Company's registration statement on Form SB-2 (Registration Number 333-114) ** Filed as an exhibit to SmartServ's registration statement on Form SB-2 (Registration Number 333-34940) *** Filed as an exhibit to SmartServ's registration statement on Form SB-2 (Registration Number 333-92599) **** Filed as an exhibit to the Company's Current Report on Form 8-K/A for an event dated September 30, 1997 ***** Filed as an exhibit to SmartServ's registration statement on Form SB-2 (Registration Number 333-43258) E-1 EX-23 3 d808507_1.txt 06/04/2002 ERNST & YOUNG LETTER EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3, No. 333-34940) and related Prospectus of SmartServ Online, Inc. for the registration of 2,160,308 shares of its common stock and to the incorporation by reference therein of our report dated March 4, 2002, with respect to the consolidated financial statements of SmartServ Online, Inc. included in its Annual Report (Form 10-KSB) for the year ended December 31, 2001, filed with the Securities and Exchange Commission. /s/ERNST &YOUNG LLP New York, New York June 4,2002 -----END PRIVACY-ENHANCED MESSAGE-----